Stonks are easy 📈
Apple fined, Twitter got plans, and IOT services.
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Market summary: 📊
Indian markets were closed for Republic Day. US stocks had an average day with S&P, with S&P giving away some ground, while tech gained an inch.
US:
S&P 500 - down 0.15%
Nasdaq 100 - up 0.051%
Europe got no chill 😑
European regulators are some of the harshest cops out there when it comes to policing technology companies. This week saw two “culprits” taken to task.
Queer dating platform Grindr is being fined $11.7 million fine by the Norwegian Data Protection Authority for illicitly sharing its users' personal data with advertisers. The app was giving out information about users' location to advertisers, which could directly be used to determine the person's sexual orientation without their consent by spotting them.
Grindr is appealing but they’ve previously been accused of silly acts like selling HIV statuses of the users to several companies in 2018, so no, the odds aren’t looking good. Also, like how hard is it?
And then Apple was dished out some Italian marinara, 🍕
Italy is suing Apple for nearly $73 million for throttling older iPhones. Regulators are seeking some $73/phone in compensation for the owners of the various models of the iPhone 6—claiming Apple intentionally slowed devices so people could go out and upgrade their phones.
I mean, even Apple agreed that it does so, albeit for a positive reason, to make iPhones optimize their battery life and last longer, but nobody is buying that BS. In the US, Apple has spent $113 million to settle a similar case filed by 36 states, and another $500 million before it. Only last month two cases were filed in Spain and Belgium, with a new one set to follow in Portugal. Quite a routine for the Cupertino gang.
Bottomline: Grindr’s fine is 10% of their revenues, so that’ll sting. But for Apple? Pff. Few million here and there against a $250 billion revenue line—rounding error bruh.
Stonk boys & maverick billionaires loot Wall Street 🤣
Gamestop debate has gripped social media. Everyone in stonkland is either busy buying the stock or figuring out what the hell is going on.
Some handholding: Gamestop is an offline retailer of video games, gaming consoles, and gaming merch in the US. As gaming went digital over the past decade, people naturally stopped visiting Gamestop locations lately, hurting the company’s long term prospects. Despite that, as of today, the company operates like 5,000+ stores across the US still, with revenues of over $8 billion—so they’re pretty well known.
Anyway, so retail investors lurking in online forums start considering online retailing seriously or somehow make a digital shift, they can possibly turn their fortunes around. Everyone in the Stonk game (particularly this reddit sub called Wall Street Bets) kinda knows about this debate, but nothing much comes of it.
Until Aug 2020, when Ryan Cohen, one of the founders of online pet-food company Chewy, takes his billions and builds a $73 million position in Gamestop. Redditors go NUTS! People start piling into the company believing Ryan will turn it around, and leverage his Chewy experience to breathe a digital life into Gamestop.
Looking at a huge overnight movement, a bunch of hedge funds decide to short the stock—basically bet that it’s going to crash anytime soon.
On the other hand, Redditors aren’t giving up. They’re piling into the company and buying crazy amounts of options, forcing a shortage of Gamestop stock in the market, which in simple terms is further forcing prices of Gamestop to skyrocket (technical term for this is a short squeeze).
As the price of the stock keeps rising, the hedge funds who shorted Gamestop are left exposing their butts. As of yesterday, a prominent investing house called Melvin was down 30% in 2021. They had to raise a couple billions on an emergency basis from Citadel and other big investors just to bail them out.
Bottomline: this madness has suddenly taken a weird turn. The Redditors are now claiming they’re up in arms against the Hedge fund “suits” and won’t rest until they break them. The regulator is helpless.
Cautious players are waving the flag—this game, where influencers on social platforms and billionaires with their fat checkbooks, are driving market euphoria is unprecedented, and Gamestop clearly shows things might have gotten a little too far.
BTW—Ryan Cohen had invested $76 million in Gamestop in August. He’s sitting on a $1.4 billion pile today. Beat that!
Twitter’s serious about the creator economy 🐦
Last night added Twitter acquired Revue, a Substack competitor, that allows anyone to build an audience via long form newsletters. The acquisition fits perfectly into the string of feature updates and smaller acquisitions Twitter has been meaning to make its platform friendlier for the creator economy.
So far in the past months they’ve made some big moves in this space:
Social podcasts — acquired Breaker
Voice rooms — launching Spaces
Screen sharing and Video chats — bought Squad App
Dorsey mentioned testing out subscription-only Tweets
Now acquired Revue — email newsletters and long form writing
Services like Clubhouse, Substack becoming overnight giants—all offering “solutions” to do more with conversations that were initiated on Twitter, offer ample cue about the direction they should be pursing.
Bottomline: points for Dorsey for the, although delayed, but much warranted aggression. Embedded monetization and a commission based revenue model, offers Twitter a great way to diversify away from making money just on ads. So far, investors seem pretty pleased with the moves too.
What else are we Snackin’ 🍿
🗼RIL’s IOT services- Jio is in advanced talks with original equipment manufacturers of devices across the board to offer internet of things and embedded smart-device functionality nationwide, built on the Jio network. For example, the telco has successfully conducted pilots with various electricity discoms for monitoring use cases. Jio will work with meter OEMs and has tied up systems integrators for the rollout on the other end.
Hit that 💚 if you liked today’s issue.
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