Microsoft & Oyo, what? 👀
Disney problems, Amazon fell short, and the week before.
Hi 👋, Tanvi here.
Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.
Sign up below for free. 👇
Let’s go ahead and get started:
Market summary: 📊
Overall a pretty shitty week in India, thanks to the operating challenges outlined by blue chip managements. US had a down day too, as tech earnings disappoint big time.
US:
S&P 500 - down 0.54%
Nasdaq - down 0.59%
India:
Nifty 50 - down 0.10%
Sensex - down 0.13%
Saturday shot of espresso ☕
✅ Scarlett vs Disney — Scarlett Johansson is suing Disney for releasing Black Widow film in theatres as well as on Disney+, simultaneously! Scarlett’s pay is actually tied into how much $$ the movie makes at the box office, and a Disney+ launch could make people comfortable on their couches, hurting theater foot traffic. Meanwhile, Disney execs are pushing for the dual launch because those Disney+ subscriber numbers gotta move up, or shareholders are gonna be furious.
✅ Flop show — no amount of fake flattery was going to save this ship. Robinhood tanked 8.4% at open, in what Bloomberg calls it “the worst debut ever for IPO of its size”. Twitter’s mood kinda gave it away — bids this size usually pull congratulations from all sides, for VCs, execs, founders. This time… crickets. Only chatter was short sellers and the Reddit crowd cheering for total slaughter. Regardless, Vlad, Baiju and the boys took home $2 billion to figure out their stuff, and market valued the company at $29B at closing of Day 1.
Nadella buys some vacation time ⛵
In the oddest of matches, Microsoft is apparently in talks with Oyo to lead a fresh funding round — valuing the company at about $9 billion.
FYI, barely a few days ago Oyo had raised a $600 million debt based war chest to get through the pandemic.
Nadella’s game plan — hard to decipher honestly, but TechCrunch says Microsoft is trying to get Oyo to move majority of its IT operation to Azure Cloud Services, which could be a sizable bill. Also, we’re guessing Microsoft is keen on aggressively pushing Azure in India, as Google Cloud and AWS have been gaining ground, and kicking off with Oyo could be a good start.
Besides, doesn’t hurt to have the turn-around king Nadella on speed dial for Ritesh, as Oyo pulls itself out of the current mess.
Key takeaway — Microsoft’s backing sure adds some credibility, assuaging concerns that a prolonging delay in travel revival could hurt Oyo’s chances to stand back up on its two feet. Well played! 👏
While we’re on raises, 📈
Neuralink, the brain implant project run by Elon Musk, got another $205 million for its Series C round from Vy Capital, Google and Founders Fund.
Neuralink makes these tiny chips, to be inserted into our brains apparently, meant to help us control digital devices with thoughts. Animal trials show promising results.
It's never enough, is it! 🙄
Amazon grew its 2nd quarter revenue by 30% YoY — to $113 freaking billions. Profits came up too.
But none of that was enough to pacify the markets — with investors hammering stock down 7% as soon as the numbers came out. Why? Because markets were holding out for $115B in revenues, and by that measure, Amazon disappointed!
Especially as consumers are facing a bit of ecommerce indigestion, realizing they’re spending wayyyy to much online, the blip should have been forgiven.
But none of that helps in Wall Street’s courts.
Going forward — the bulls aren’t complaining. History suggests, any withdrawal in $AMZN in the past, the stock springs itself back into action to book even greater highs. So rather be happy about getting the stock at a $AMZN on a 7% discount.
What caught our eye — Amazon’s ecommerce business barely over 50% of all of its revenues, with the rest of the business (which includes Cloud, Prime subscription bundle, Digital Ads, Merchant Services, Payments) slowly starting to dominate. These businesses are a lot more profitable, and growing much faster.
While we’re here, 😢
Pinterest meanwhile was beaten into a flat pulp, down 20% in a single day, because the company’s monthly active user number declined 5% YoY — a sin for social media companies.
Aight friends, that’s it for today! Quick look at all that went down last week 👀
🤯 EV maker going public — Lucid Motors, a Tesla rival, raised $4.5 billion via a SPAC listing this week. Lucid hasn’t sold a damn car yet, but that ain’t going to stop people from buying into the future, with stock getting warm reception. Lucid does have pretty solid IP, with its battery technology supposedly far more superior than Tesla’s, capable of going 800kms with a single charge. Also, Lucid is targeting the $80K+ entry-level luxury car segment.
💻From the semiconductor land — with regulators dragging their feet, NVDA’s $40 billion acquisition of ARM holdings is looking like it's falling apart. ARM says if the deal doesn’t work out, it’ll go public. NVDA was looking at the acquisition as a way to beef up its CPU arsenal and take on Intel, but governments around the world are squeamish that the arrangement would create a market dominating monster.
🤑 Rundown of earnings for Big Tech companies —
Google freaking killed it. Revenue up 66% YoY. YouTube was the star, growing sales by 85%+, as traditional TV viewing as well as ad spending continues to move online. Watch out Netflix!
Microsoft showed the cloud computing boom is unstoppable, but the party turned a bit sour when Xbox revenues flatlined, and Surface device revenues declined, showing some of the trends that caught fire during COVID have matured.
Coming to Apple, another blowout — revenues jumped 36% YoY to $81 billion!! iPhone sales jumped more than 50%!! Insane for a 45 year old company!
Now moving on the “could have been better”:
Spotify closed the quarter with 165 million paid subscribers, a tad lower than the markets were expecting. Hammered into the ground.
Facebook’s quarter was pretty phenomenal. Revenues grew 56% YoY, but Zuck seemed pretty cautious about Apple’s privacy update impact on FB’s business in 2021.
💄Can't wait no mo' — Nykaa will file its docs with SEBI in the next few days, to raise ~$400 million at a $4 billion valuation. Early backers TPG and Fidelity are likely to hit the door, while founder Falguni Nayar and family will continue to hold a 51% stake. For those new here, Nykaa sells a variety of beauty products via a battle tested omnichannel model (online + ~70 physical stores), with revenues topping $250 million last year. India’s online cosmetics market has been exploding in the past 16 months, and the $ZOMATO bid sets up a nice stage for some serious fun!
💰 Meanwhile, quick rundown of Indian earnings this week —
For RIL, revenues looked healthy, above the market’s expectations, BUT, profits tanked 7.2% YoY to ₹12.3K crores. Majority of the decline was brought by the retail business which suffers from no shoppers and empty malls.
Meme-favorite ITC printed a good quarter too. Revenue jumped 37%, profits jumped 29%. Ciggy empire grew 30%+, FMCG is moving along nicely too. But the show stopper was the Paper and Packaging biz, which grew by 50%+! Ecommerce boxes, is that you?
Another FMCG player Nestle reported a 11% YoY increase in net profit of ₹538.6 crores, with revenues growing 14%, and digital sales up a whopping 147% so far in 2021!
Lastly, in the car front, Tata Motors managed to grow its revenues by more than 100% YoY, pulling in ₹66K crores. Maruti hit some hiccups however, with revenues of ₹17,770 crores, up 4x, but net profit of only ₹440 crores, a 62% sequential drop.
Bottom line is, business through the door is improving, but inflation and rising prices of raw materials are eating into profits.
✈️Dichotomy in airlines — Indigo airlines lost more than ₹3,000 crores during the last 3 months, with travel freezing and no signs of rebound in sight, making it the 6th straight quarter of losses for the business. Revenues were down 56% vs. the quarter before — horrific. But that won’t stop the optimism of new ventures. Rakesh Jhunjhunwala is expecting government approval for his new budget airline within the next 15 days, promising a 70 plane fleet within the next 4 years! Good luck.
And oh, if you missed out Coffee Points earlier this week, do check it out 👇
Hit that 💚 if you liked today’s issue.
You can forward this email or share FC on social media by clicking the button below. Thanks and Ciao! 😀