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Market summary: 📊
Overall, March turned out to be a dud with the markets landing mostly flat from where we began. US showed some heart on Wednesday, with tech having a rare up day.
US:
S&P 500 - up 0.36%
Nasdaq 100 - up 1.51%
India:
Nifty 50 - down 1.04%
Sensex - down 1.25%
What’s brewing hot? ☕
✅ Saving good ol’ LinkedIn—LinkedIn is adding a bunch of tools to make the platform friendlier for creators, most notably including a video based cover story, a video live-streaming feature, and then the customary Clubhouse clone for audio-first sessions. Mixed feelings—could either be a turning point for the platform that lets creators cultivate and build an audience, offer courses, and monetize, or expect a cringe fest on steroids. Irrespective, it's a money making business for Microsoft, with revenues growing 23% last quarter, and as long as that meter runs, nothing else matters to Nadella.
✅ Another one flies off—ad-tech giant InMobi, which was India’s first ever unicorn from the digital era, broke a million hearts disclosing plans of a $15 billion IPO in the US. Cruel! The board will meet over the next few weeks to figure out details. BTW, the bid would book another windfall for Masa Son’s Softbank, which has had a surprisingly outstanding streak lately with the IPOs of companies like DoorDash and Coupang bringing in billions through the door. They own 40% of InMobi.
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Semiconductor shortage is getting out of hands 🤯
A global shortage in semiconductor component is slowly getting out of control, hurting production of electronics stuff across the board—from laptops to headphones to $50,000 cars, causing losses worth tens of billions of dollars.
Quick backstory—when COVID came knocking, several factories and production facilities were forced closed overnight. Some of these facilities literally operate on a shoestring margin, which couldn’t bear shutting down for long, and eventually crumbled and never saw daylight again.
When factories eventually opened, there were persistent logistical issues, restricting free movement of goods across most of the world. Not to mention problems with labor. All of these ripples of early disruptions compounded into massive delays of deliveries throughout the production value chain, disrupting the supply-side equation of the entire semiconductor game.
On the other hand, COVID brought a boom in sales of devices. People sitting at home, pushed by remote working or learning or leisure, suddenly demanded more laptops, more smartphones, more cables and gadgets. Car sales shot up too, as public transportation wasn’t a preferred alternative.
Basically, demand rose, while supply froze.
Now as we’re almost a year into the pandemic, the true impact is becoming more and more visible.
Many auto plants in the US have been forced shut down because there are no chips to go into all the electronic systems
In Feb, we saw Mahindra and Mahindra report a stinky quarter as it couldn’t get delivery for some semiconductor parts for its tractors
Now most recently Foxconn, one of the largest semiconductor manufacturers in the world, just told investors nearly 10% of its revenues is at risk due to no parts
Some reports are suggesting that it's probably going to take nearly a year for all the disruptions to be ironed out completely, and stocks from Apple to Amazon, from Ford to Tata and Maruti are at risk of non-deliveries and declining sales.
However, if you own semiconductor stocks, you may be winning, as companies can suddenly quote higher prices for their ware, which will likely stay at elevated levels for a couple of years.
Bottomline: prices of everything from cell phones to vehicles are about to go up 10-20% while the industry suffers the crunch. Great for semiconductor companies, and their investors. Not so great for consumers.
AMZN solidifies its dukaan-tech assault 💪
Amazon made a small but sexy acquisition, buying out retail-tech platform Perpule for about $20 million in an all cash deal.
Perpule is kinda like the Square of India—offering small merchants and Kirana stores a suite of tools and a POS hardware setup to process payments, helping merchants digitize and seamlessly manage their offline and online operations through a singular, well integrated service.
Amazon is now hoping on using the tech to beef up its hyperlocal strategy, distributing Perpule more widely to small merchants it works with, hoping to leverage software + hardware as a bait to capture loyalty of small merchants, who as of today are HOT property for digital commerce platforms—owing to the fact that nearly 95% of all retail commerce in India is carried out through neighborhood stores.
Bottomline: there’s over 30 million Kirana stores in India, all with a voracious appetite for broad digitization. Earning a thick relationship with these merchants offers platforms a strong vantage point to dominate Indian digital commerce game. Still at Day 0 in the merchant-tech wars.
OG of edtech confirms IPO 😎
Coursera went public yesterday, raising nearly $519 million at a relatively modest $4.3 billion valuation, riding the pandemic driven boom in digital learning right onto Wall Street.
Quick look at its numbers:
Revenues of $294 million, up 60% last year
Offers over 3,700 courses from leading universities and colleges
77 million registered users
Wall Street seemed pretty warm despite a generally gloomy outlook for growth stock lately, taking $COUR up nearly 15% by the day’s end.
The business is still a loss machine, but the company's been making exciting investments in building SaaS tools for universities, making compliant tools for 100% remote operations of universities (about time to stop winging it on Zoom), which is gaining a lot of traction.
FYI, post-recession years are generally the best years for upskilling businesses, as otherwise penny-pinched customers are super-happy to spend money on retooling themselves to salvage jobs or find new ones.
Closing out—get over FANG Stocks 🥱
Gone are the days of Facebook, Apple, Netflix, Google.
TikTok owner Bytedance, which also runs a couple of extremely popular apps in China, is seeing its stock trading at an outstanding $250 billion valuation tag in private markets. Barely months ago was the business valued at $140 billion.
Without Trump around to pick on its baby TikTok anymore, and thanks to back to back launches of features and partnerships around streaming, shoppable videos, tools for creators, better ad tools—growth for the business has been thrilling.
Also, can’t stop admiring the trajectory the business has witnessed since its founding, almost unlike any of the trillion-dollar giants of today, which makes you wonder how long the ramp for the new generation of tech empires is really going to be!
What else are we snackin’ 🍿
👟Getting GenZ on board- Nike is taking an odd nose-dive into social commerce, launching a video shopping and self care app to bypass its overreliance on social platforms like Insta, Snap etc. and directly form a relationship with its emerging GenZ customer base. Nike hopes to drive its 140 million+ Insta following onto its own properties going forward, throwing some light on how brands are increasingly leaning towards owning their media.
Hit that 💚 if you liked today’s issue.
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