Stuff of dreams
Bitcoin for cars, Intel makes a comeback, and Fantasy gaming takes off.
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Market summary: 📊
Indian indices took a beating as investors seemed worried that second-wave cases may hurt economic recovery. US markets returned to give high-growth tech stocks heavy thrashing.
US:
S&P 500 - down 0.55%
Nasdaq 100 - down 1.68%
India:
Nifty 50 - down 1.79%
Sensex - down 1.74%
What’s brewing hot? ☕
✅ Tesla makin history, again—the car maker becomes the first automobile player to accept Bitcoin as a legit mode of payment for vehicle purchase. Facility will go live in the US with global launches to follow, and Musk even mentions that the currency won’t be converted back to USD upon receipt of payment. Sounds simple, but a move like this takes enough investments to ensure security, hedging, storage etc. and nobody knows how to interpret the big picture. But when you tie Bitcoin into Tesla’s ambitions of running a robotaxi network and letting people earn $$ on their cars, the possibilities for them in financial services suddenly seem endless!
✅ Stuck in the canal—a 225K tonne giant container ship, longer than the freaking Eiffel tower, drifted away and got stuck in the Suez canal due to poor visibility in a sandstorm. The historic waterway connects Asia with Africa and offers the shortest shipping route between Asian countries and Europe, with nearly 12% of the global cargo volumes passing through it each year, and the blockade is expected to run losses into the hundreds of millions. Quick link on the channel’s history.
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Intel plans a comeback 👊
Intel’s new CEO is already warming up to the job, leading charge as the company slowly plans for a comeback, and some pretty ambitious moves have already been lined up.
Some context—Intel’s business has been hurting for a while now, plagued by problems in the company’s manufacturing processes, lack of growth due to a weakening market positioning to companies like Nvidia and AMD, and all of that weighing on employee morale. CEOs ended up getting fired, and investors super angry.
Intel had to act, so a few of the company’s most prominent activist investors brought in Pat Gelsinger from VMWare to lead the ship, and it looks like change may finally be here.
Pat’s game plan—
$20 billion will be spent to install two new chip making factories with state of the art technology in Arizona, USA
Run a dual operation, making Intel chips within its own facilities, as well outsource chip-making to the best of facilities run by Samsung, and TSMC to make Intel-designed chips
Lastly, the company is forming a separate entity called Intel Foundry Services, a full blown operation set to take the company head-on into the business of making chips for outside companies, to be led by Dr. Randhir Thakur. Google, Microsoft, Qualcomm, and IBM, are already lined up as potential customers
Not to mention, the foundry business will also be working closely with top-units of the government to make chips for the US and its allies, putting an end to increasing concerns that the western world and its friends are going to be dependent on Chinese and Tiawanese chip makers to supply their wares.
Bottomline: turning around Intel is a mammoth task, and it was quickly becoming a national security issue for global superpowers. But the plan so far seems quite coherent. Even if they manage to earn 10% of the $100 billion foundry market in a few years, we’re talking about a sizable franchise that can help bring the company back to growth. Investors seem to love the agenda and took stock up 5% when the news broke.
Secretly, everyone knows the US government had a big role in making sure everything here is ironed out, given the increasing threat of losing chip-leadership to Chinese and eastern Asian companies. Gelsinger is just the busboy.
What dreams are made of 🔥
India’s social gaming and fantasy sports landscape is unstoppable.
Fantasy sports platform Dream11 raised $400 million in a fresh round led by TCV, D1 Capital, and Falcon Edge, cashing in all the 2020 ‘sit-at-home and bored’ craze. Tiger Global and a bunch of its other existing investors also pitched in. Valuation levels = of $5 billion. Fireworks.
For all you sports not-fans, Dream11 basically runs a platform where users can put together their own virtual team, shadow follow the real game, and then earn points (or cash) based on how the real-life players perform. The product basically sells itself in a cricket-crazed country like ours, which combined with a flawless marketing campaign during IPL helped the company scale to 100 million users. More games including football, kabaddi, and basketball have been added.
Fantasy gaming is still banned in a few Indian states, and the road ahead is quite long, but as regulation starts to fall off, adjacent opportunities in sports betting, real-money gaming, and even online gambling could be even hotter arenas.
Moving on to a quick content raise, 💰
Vernacular social and content platform Public App raised $41 million in a high profile round led by A91 Partners, doubling its valuation to $250 million.
The company, backed by Inshorts, runs a local news and content service, which connects users based on their locations and shows them regional news and happenings in and around their neighborhood. Popular among Politicians, officials, and local businesses, in no time, the service has been scaled to 50 million+ users, and has even enterprises like HDFC Bank and Amazon leveraging its deep penetration.
Onwards….
Battling expectations with reality 🧐
Govt. loves its taxes, but that fetish routinely runs counter to our progress agenda.
India will be pushing for a 40% customs duty on the import of solar modules beginning April next year, in a bid to go all “Atma Nirbhar” and cut reliance on foreign imports, giving the domestic solar manufacturing industry a quick boost.
All fun and games but we still import more than 85% of our solar panels from China, and the domestic industry has a long way to go before the supply scales up to match fallout from the imports. With extra taxes to pay, analysts claim that the power companies lose the incentive to accelerate investments, which discourages solar installations in the short term.
What matters: India has an ambitious target to add 25GW of fresh solar capacity every year until 2030, as we scramble to cut reliance on coal and other polluting sources, and step down from that inglorious “most polluted” cities list. The tariffs could seriously hurt progress.
Closing—Adobe kills it 👏
The quarterly earnings are pretty much wrapped up minus a few tech names here and there, among which was Adobe. The digital design and productivity software company had a cracker of a quarter, making the most of the COVID-induced cloud tailwind powering its sails.
Quick round up of the numbers:
Handily beat Wall Street’s expectations for both revenues and profit
Revenues grew 26.5% to $3.91 billion for the quarter
Revenue run-rate of $10.7 billion in the company’s Digital Media segment, which includes Photoshop, XD, Illustrator, and all the other fancy online tools
Adobe CEO Shantanu Narayen seemed pretty upbeat about demand holding up as the world slowly begins to recover.
Like Satya Nadella, Shantanu had master-minded Adobe’s painful shift to a cloud-first delivery model, and investors are essentially reaping benefits of his decade-old foresightedness.
Bottomline: the profitability and gracefulness of execution for some of these leading cloud software businesses is truly astounding, which makes them an absolute staple in the portfolios of global investors. How can you say no to metrics like these!
What else are we snackin’ 🍿
🐦Making sure there’s no foul play - Twitter, wanting no more trouble with GOI, is implementing significant product, policy, and enforcement updates to keep the service safe during assembly polls in Assam, Kerala, Tamil Nadu, and other states. Political advertising as well as nefarious behavior from users will be monitored. Jack Dorsey, the self-appointed election commissioner.
😷We bacc in March 2020 - Another one (In DJ Khaled’s voice) India has found a new ‘double mutant’ variant of COVID-19 in nearly one-fifth of the samples from Maharashtra analyzed by the Indian SARS-CoV-2 Consortium on Genomics. This new development comes as the country is battling with the second wave of the pandemic and daily deaths are on the rise again. DON’T PULL THAT MASK DOWN.
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Talking about Tesla & Bitcoin - Dell has been accepting Bitcoin as a payment instrument since ages.. #justsaying