Whattay run 🙌
Another closure, Databricks win, and GME bloodbath.
Hi 👋, Tanvi here.
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Market summary: 📊
Budget spirit gripped markets for another straight day, with Sensex briefly crossing 50K early on. US markets had a good day as well, with all the Gamestop money returning back to deserving stocks.
US:
S&P 500 - up 1.39%
Nasdaq 100 - up 2.50%
India:
Nifty 50 - up 2.57%
Sensex - up 2.46%
What’s brewing hot? ☕
✅ System gadbad hai idhar ka—while most major pockets of the economy recovered well, the pandemic has been pretty damning for the real estate game. HDFC, one of the largest financiers of the segment, saw its profits drop like 65% in the most recent quarter. The bank also had to make some provisions for future bad loans. Despite that, they managed to beat the street's expectations, so nothing too catastrophic there.
RBI however gave them a mild shocker. HDFC’s IT systems are being audited by the regulator to make sure they’re in top shape, after a few incidents over the past few years showed the bank’s online portals were repeatedly going down. RBI had even stopped them from rolling out new digital banking products meanwhile. A special outside firm has been roped in to conduct a full IT infrastructure audit of the giant.
✅ Stop where you are—India's prime time business soap opera got a plot twist. Delhi high court told Kishore Biyani and Future Group that Amazon’s claim that you’re rushing this deal without heeding to regulators is valid, and that you should hold off on pushing forward on the merger, for now, until the court reviews all the actions that Future took before signing off the deal. Point scored, team Bozos.
Raising dough like its nothing 💰
Over the weekend Robinhood had raised a $1 billion emergency cash to help stabilize its financials, and barely days from that event another $2.4 billion in green cash is on its way to the company’s coffers.
The round was led by staunch supporter Ribbit Capital, with most major existing investors (Sequoia, Andressen etc.) piling on as well. Definitely a huge sign of confidence for the platform that’s mired in a brand killing controversy. But...
Controversy is free marketing too—nearly 600,000 more people downloaded the Robinhood app last Friday alone, even though CEO Vlad Tenev was getting blasted in live media for siding with the “suits”. The total active user base is now running close to 3 million, in addition to like 8 million+ dormant users.
What’s next: getting out of the debacle will certainly take some time. Nobody can tell how long people would be sour for, and the CEO better not test that out with anything stupid like an IPO right now.
But given alternatives people have for trading in the western markets, like Charles Schwab or Etrade, which are clunky, slow, and rigged with fees, odds are digital-savvy younguns return back to daddy pretty soon.
Also, in case you’re wondering, the redditor lay numbed—$GME crashed nearly 60% in a single session today. Absolutely destroyed.
Pivot pivot pivot 🎮
Google is shutting down its internal game development project, which was started with plans of making high quality streamable games for Google’s cloud gaming service called Stadia.
Some backstory: Streaming is considered the next hot frontier in gaming. People sitting in their living rooms, streaming world-class immersive games like a movie on a subscription platform, and playing it with nothing more than a controller in their hands. No bulky consoles (like PS4, Xbox) or buying an expensive game every time you want to spend 5 mins engaging.
So Google, Microsoft, Sony, Facebook all ran after the opportunity spending billions of dollars on acquisitions in building their platforms. 5G was believed to be this huge unlocker of network speed to facilitate the low latency and speed necessary for such dense applications.
Anyway, thinking it can create a Netflix-like movie making machine inside of it (for gaming that is), Google went into an acquisition spree, acquiring game studios in Montreal and Los Angeles.
But it appears they’re pretty soon realizing this endeavor is not worth it. First of all, making games is HARD. Much like the movie business, it's about creativity, hiring a passionate talent base, nurturing ideas, and dealing with overheads unique to the industry. Secondly, licensing games from other top studios makes good sense especially when they’re just kicking off the project and don’t even have traction.
Why make half-assed content when you can buy the best? Margins and profits can be chased later. Anyway, it was a poor decision, and firings are due. Jade Raymond who was leading the gambit, will be departing Google, and 150 developers will be put out to dry.
Key takeaway: Google learning on the fly is not new, it's what makes the company so formidable. Odds are they may pretty soon go after EA games or Ubisoft or Activision Blizzard to make up for the void.
Databricks absolutely killing it ☁️
Databricks raised a massive $1 billion for its Series G round led by Franklin Templeton, with biggies including AMZN, MSFT, GOOGL pitching in. Post raise, the company’s valuation will be set at $28 billion—which goes to show just how HOT the cloud software space continues to be.
For those unaware, Databricks basically provides a cloud-native analytics platform for data scientists to assimilate data from multiple sources, clean it, conduct analysis, and make pretty charts. It obviously comes with all the bells and whistles of a heavy end to end data management platform.
The company reports some 5,000+ customers, ended 2020 with close to $400 million in revenues, and is growing at over 75% rates. Fresh funds will go to bolster the platform, and pursue a data lake house approach. IPO is on the cards. With Snowflake’s IPO absolutely blowing it away, the sentiment for analytics software companies is extremely favorable.
Closing out—world’s no.1 capital allocator steps back 👋
30 year old Jeff Bezos had quit his job, moved 3,000 miles to Seattle with his wife, and started an online book store in his home garage.
Over the next 27 or so years, Jeff scaled that garage-project into a $1.7 trillion global company, doing $400 billion+ in revenues, and employing 1.5 million+ people worldwide. And today, as Amazon report’s its first $100B quarter, Bezos announced his retirement from the helm.
He will be replaced by Andy Jassy, a 25-year Amazon veteran, who ran the AWS cloud business inside Amazon.
Ah, also, Amazon’s 4th quarter was OUTSTANDING. Revenues up 44%, profits up 86%. Sold over $600 billion worth of stuff in 2020.
What else are we snackin’ 🍿
📱 Cant resist short videos - You Tube is planning on launching a dedicated short video platform called Clips. The feature will let users create a short segment from their videos and live streams, kinda aimed at making YT content a bit more consumable. It is currently being tested in beta and hence it is limited to only a handful of users.
🤦 Pay up for your deeds - Female engineers took Google to courts over lower pay than men and tougher interview standards, and team Pichai will pay some $2.6 million to nearly 5,500 employees and past job applicants to settle allegations of discrimination.
Hit that 💚 if you liked today’s issue.
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