Pizza dealzzz

Telco race still on, game of billions, and Asian paints' kickass quarter.

May 13, 2021

Hi 👋, Tanvi here.

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Let’s go ahead and get started:

Market summary: 📊

Brutal day for markets around the world — India continued its downward spiral with another day of losses. US stocks were hammered, with tech especially slammed numb into the ground.

US:

S&P 500 - down 2.14%
Nasdaq 100 - down 2.62%

India:

Nifty 50 - down 1.04%
Sensex - down 0.96%

What’s brewing hot? ☕

✅ Telecom race isn’t done, just yet—Airtel continues to outpace Reliance’s Jio in 2021, adding more active subscribers than the latter for the third straight month now. Feb month data shows Airtel adding 3.7 million new active paying users, while Jio and Vodafone both lost net 0.2 million (freebies ain’t stickin’). We’re guessing strained and crowded networks affecting data speeds (work from homers), as well as raised prices may be responsible.

✅ Pizza deals—the shares of Domino's Pizza popped 5% on Wall Street after legendary hedge fund investor Bill Ackman got himself a 6% stake in the business. With Bitcoin and SPACs running wild, for something as boring as Pizza to catch investor’s mind is pretty unusual in itself, but Ackman has quite the reputation for taking jumbo stakes into “could be better” businesses and putting his men to work to improve outcomes. He just told the markets he rolled out of Starbucks ($SBUX), after that thing 2x’ed from the bottom of the pandemic, and plonked all that cash into Dominos straight up.

Game of Billions 👀

Vitalik Buterin, the prodigy founder of Ethereum, donated $1 billion last night to one of the charities working to fund COVID relief in India—just like that, sitting on his couch…

The infighting—to prove a point that the meme coins blowing up overnight actually have some use case, and value, creators of several emerging blockchain projects have been sending Vitalik unsolicited currencies to his public wallet.

One of the largest such orders came from the founders of Shiba Inu, which has been flying right up there next to Dogecoin, booking tens of billions in market cap overnight. So the pot of $SHIB that was sent to Vitalik as a token had swollen in recent days, spiking to $8 billion in value at some point.

Want some more crazy? Instead of cashing the dough out, Vitalik straight up sends it across to the India COVID relief effort run by Polychain founder Sandeep Nailwal.

FYI, that’s about 20% of India’s total spending allocated for COVID vaccination this year in the budget.

Sandeep - Polygon(prev Matic Network) @sandeepnailwal

Thanks @VitalikButerin One thing we have learnt from Ethereum and @VitalikButerin is importance of community We will not do anything which hurts any community specially the retail community involved with $SHIB We will act responsibly! Plz dont worry $SHIB holders. https://t.co/M4GxTR0JAn

Altcoin Alerts @Altcoin_Alerts

🔔Vitalik donates 1B Worth Shiba INU To India Covid Relief Fund ! @VitalikButerin @sandeepnailwal $SHIB https://t.co/liFcc5DWd4

Try explaining what’s going on to your parents for a quick reminder on how bat shit crazy these happenings really are…

Larry David Wtf GIF by Curb Your Enthusiasm

Cashout problems—the real question now is how can India COVID Relief Fund actually cash the $$$$$ out without crashing the market. Instant withdrawals could destabilize retail prices, ruining the party for everyone, and it's not like you can just walk up to a bank asking for a billion…

Paint me like one of your offices... 👑

Meanwhile, back on Dalal Street, Asian Paints caught up with investors to discuss its quarterly numbers, which obviously were outstanding thanks to the lil boost in consumer recovery we were fortunate to see for the first 3 months of 2021.

Quick look at numbers:

Revenues jumped 44% YoY to ₹6,651.4 crores, above market’s expectations
Profits up 44% YoY to ₹852.1 crore
Margins slid to under 20% from ~26% because raw materials have become expensive, consistent with other companies we’ve seen so far
Volume of the domestic home decor business jumped 48% YoY

The business essentially won from strong tailwinds formed by home furnishings that had been postponed for most part of 2020, as well as the remote working related upgrades to make home-based workspace slightly more livable.

Big picture—hard to remain too optimistic about consumer demand in the short term, but India’s top corporations have shown masterful execution through COVID, and we’d take the bet that these businesses will only emerge stronger after this wave.

Bezo’s $500 million new boat’s half paid for already… ⛵

In 2017, the European Union had slapped Amazon with a $300 million fine for not paying taxes, doing a victory lap on how it had tamed a spoilt American tech giant.

Yesterday, AMZN won an appeal against the fine, overturning the ruling with a FU to the EU.

Lil backdrop for ya—Since 2006, Amazon’s been running a subsidiary in Luxembourg through which it routes all its Europe revenues to the US. All was good until in 2017 when the European Commission, overnight termed this “illegal”, quickly opened an investigation that accused Amazon of receiving tax benefits and paying 4 times less tax compared to local firms.

So this appeals court basically claimed that, “well, everybody does it” and that the regulators failed to establish any credibility that AMZN specifically was given any special treatment by Luxembourg’s tax authority. So why only nail them, then? Silence.

Also, taxes are mostly paid on profits, not “revenue” like how the EU here claims, and by that measure, Amazon’s EU business reported a $1.2 billion loss last year, and every year before.

Going forward—Europe's competition chief Margrethe Vestager said that they will closely research the decision and decide on possible next steps, including appealing the court's ruling and bringing the matter to the EU's highest court.

Big Picture—the EU’s policies around technology policing has mostly been a self goal so far, hurting jobs, leaving room for petty politics, and thwarting innovation. Remember GDPR?

Closing out—everybody wants a house 🤝

Better, a disruptive home loans startup in the west, will be going public in a splashy SPAC deal, raising $800 million in the process.

Home financing is a super tedious process, and Better basically makes it as easy as putting in a few trades for some stonks. The platform initiates, underwrites, and finances home loans itself, owning the end to end process and then passing on the saved $$ to end consumers.

And the outcomes have been stellar—since the pandemic, loan volumes processed have apparently 4x’ed, as record low interest rates, combined with remote working, push millennials out of cities into the comfort of a suburban life.

Broader picture—younger generations have shown enough evidence that they’re absolutely okay making big purchase decisions online, with things like walking into a bank branch considered borderline blasphemous. The runway for growth for disruptive platforms is looooooong.

Money on the IPO—Softbank, which recently had plowed $500 million into Better, will apparently put in another $1.3 billion here, and suddenly with the returns that massive stake is gonna deliver—Masa Son’s falling house of cards is now looking sturdier than the Burj Khalifa.

What else are we snackin’ 🍿

🤨 Won’t let TikTok win easy - YouTube announced a $100 million fund that will payout big monies to YouTube Shorts creators for their most viewed and most engaging content over the course of 2021 and 2022. TikTok, without native monetization, is looking like a sitting duck.

💪 Another Indian CEO at the helm- VMware, which recently got spun out of Dell, appointed COO Raghu Raghuram as its CEO. Tech co, looking for a transformation, Indian ceo… so scripted.