Snap gets smacked 🤦♂️
WeWork lists, Crypto raise, and stuff from the week before.
Market summary: 📊
Turned out to be a dud of a week for India overall, with higher-inflation and low-profit worries driving investors nuts. US had a soft Friday too, after Snapchat’s disaster of earnings took wind out of the tech rally.
US:
S&P 500 - down 0.11%
Nasdaq - down 0.87%
India:
Nifty 50 - down 0.35%
Sensex - down 0.17%
Weekend shot of espresso ☕
✅ Nykaa party arrives on street — Nykaa is all set to accept bids for its IPO, starting October 28, raising more than $700M, at a $7.5 billion+ valuation (almost 2x’ed since the IPO talks even began, without demand flinching one bit). Business is profitable, with growth firing from all cylinders, playing in one of the hottest consumer goods segments in India rn. Gonna be a fist-fight to get some allotment!
✅ We-worked, finally — WeWork, the near-defunct Softbank funded cash-guzzler, which was rekt by the carelessness of a maverick CEO and brutal attack of COVID, finally managed to find its feet and got listed on the stock exchange yesterday at a $9.5 billion valuation, via a SPAC merger. WeWork’s 2019 IPO-plans were scrapped after massive governance problems had surfaced, which eventually forced Softbank to buy-out the business for pennies on the dollar (taking losses of $10B+), and turn it around. Props to new CEO Sandeep Mathrani.
Apple kicks the entire ad-industry in ‘em nuts 🤦♂️
Snapchat was murdered yesterday — with stock hit nearly 25% in an hour after the company’s revenue for the 3rd quarter missed investor expectations.
Reason? Apple’s IOS-14 privacy changes were making it harder for Snap to target users.
Digital-ad player had been warning of the impact before, but this was the first time material impact folks had seen in the numbers — which was interpreted as doom for the entire digital-ad industry, dragging Facebook, Twitter, down 7%, Google down 3%, smacking other ad-tech stocks along the way.
Trade may also be a reason — Snapchat also told investors that the ongoing supply chain shortages was killing enthusiasm of brands to spend on marketing, knowing that they may not be able to make $$ at all, which throws the holiday quarter in a bind.
What now — social platforms are looking at significant investments, or other acceleration in alternative monetization options, if they plan on staying up and paying bills.
For Snap’s credit, engagement was strong though — 306 million people use the app everyday, up 23% YoY. Long live sexting lol.
Big picture — Apple’s own advertising business meanwhile is expected to 3x to $5B this year, and to 4x from there to $20B+ by 2023 — the boldest day-light heists of market-share in the history of the internet lol...
FTX scores 420 🍁
What happened — crypto-exchange FTX, raised another massive $420 million from 69 investors (just perfect) including Temasek, BlackRock and Sequoia, nearly doubling valuation to $25 billion.
FTX was founded by Sam Bankman-Fried, the youngest-richest man alive right now, who entered the Forbes tres-comas list with a bang this year. Specializing in crypto derivatives — FTX makes its bread by serving extremely specialized, professional traders, with risky and volatile instruments. Currently, the company processes $13 billion in monthly volumes.
Fun fact? FTX was founded in just 2019.
That’s all we have for today folks! Here’s a quick look at what went down this week…
🥻 Reliance bets big on ethnic — Reliance made two big bets on ethnic wear this week, First, a 40% stake in famed fashion designer Manish Malhotra’s luxury brand, followed by a 52% stake in fashion designer Ritu Kumar’s luxury label. RIL hopes the investments will help strengthen its design capabilities, complementing its unparalleled retail-operational and distribution expertise, in taking on the widely fragmented ₹1.5 lakh crore ethnic wear market in India.
🤑 Square is building a bitcoin mining rig — Jack Dorsey’s payment company’s newest product will be a a better designed, more efficient Bitcoin mining rig, built on custom silicon and created to be plugged anywhere, to be used by anyone. Square has strong expertise at the intersection of fintech and hardware, considering they pioneered the mobile-POS terminal concept, so expectations are set pretty high.
🚚 Ola entering grocery, again — after a botched attempt in 2016, Ola is planning a re-entry into the grocery delivery business, and even hired ex-CCD CEO to run it. Ride-hailing is taking time to recover, delayed by remote workers stuck at home. Ola hopes that grocery + food can help pay the bills meantime, something that Uber has seen a lot of success with in the western market. Besides, the grocery delivery segment is expected to top $40B+ by the end of the decade in India, making it one of the fastest growing online commerce categories!
📍PayPal is tryna buy Pinterest — for $45 billion…. a weirder and more expensive deal couldn’t be conjured, but here we are. Pinterest is a staple among hobbyists and millennial-mamas looking for inspiration to design their homes, gardens, or pet projects. PayPal thinks the ad-driven platform could be a nice addition to its extensive portfolio of “merchant tools”, helping small-businesses find, monetize, and retain customers. Officially the deal hasn’t been disclosed yet, but a lot of loyalists on either side seemed disturbed.
📈 So far, Big Tech earnings look fine — first, shrugging off chip shortages, labor problems, and supply chain problems, Tesla managed to deliver another record breaking quarter — delivering a record 240K+ vehicles, and growing revenues by 56% YoY. Stock again topped all time highs. Then, a weird-ass Korean dark thriller saved the day for Netflix — helping the company add 4.4 million new subscribers in the last 3 months. Netflix was seen booking new highs too. Great week!
Hit that 💚 if you liked today’s issue.
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