Everything You Need To Know About Tinder Gold, Plus Blue Apron’s IPO Price Gets Sliced

by 4 months ago

morning brew

Here’s your hand-crafted Brew for June 29th

QUOTE OF THE DAY

“These should not be present at any level— never mind the significant numbers found.” — Tony Lewis, Head of Policy at CIEH, talking about bacteria found in a certain warm…brown…substance found in Starbucks iced coffees. No, it wasn’t the coffee

Market Snapshot

  • The S&P posted its largest one-day gain in two months as banks surged.
  • Oil futures rose as U.S. weekly production declined.
  • The U.S. dollar hit its lowest level against the euro in a year.
  • Small-cap companies’ shares in Hong Kong were annihilated.

Staples Story

Private equity firm Sycamore Partners has agreed to scoop up Staples (+8.41%) for a cool $6.9 billion. An odd sign of faith in the 2017 retail sector, when chains have been filing for Chapter 11 left and right (aka Gymboree and Sears Canada).

But maybe it’s just the right time…

Despite shares sinking from a pre-recession high of $25 and e-tailers plaguing its consumer business, the Massachusetts-based office retailer is actually running a pretty tight ship.

In 2016, Staples held a 48% share of total U.S. office supplies stores, while raking in a whopping $889 million in free cash flow. Even better? About 65% of revenue was driven by B2B sales.

And Sycamore Partners liked what it saw

After Staples’ failed merger with Office Depot (antitrust regulators struck again), Sycamore Partners is now paying a 20% premium in the biggest leveraged buyout of the year.

And it’s not just shuffling papers—here’s the three-part plan to get this baby rollin’:

  1. Grow the B2B delivery business
  2. Refocus its struggling consumer retail business
  3. Give its Canadian arm a helping hand

Tinder’s Gold

Tinder wants you to swipe right to your heart’s content—and the California-based dating app (and a Match subsidiary) is rolling out a new feature to do just that. Introducing: Tinder Gold.

Pricing has yet to be released, but Tinder believes this “premium” subscription service will become the gold standard for late night hookups you’ll quickly live to regret.

So what’s underneath the hood?

Some old features from Tinder’s first subscription model, Tinder Plus, including:

  • rewinding swipes
  • ad-free experience
  • unlimited swipes

And finally…the ability to preview your “likes” before swiping. Swiping just got a whole lot better.

And while it might feel pretty simple

There’s something to these premium features.

When Tinder rolled out Tinder Plus in 2015, business expanded outside of its traditional, ad-based revenue model.

It charged users younger than 30 $9.99 a month and users older than 30 up to $19.99 a month.

Tinder quickly garnered one million paid subscribers (of its 50 million users) with premium membership growing 71% in 2016.

So maybe an extra swipe is worth the money—maybe Tinder’s new preview feature will be another hit—and maybe that next swipe will finally be “the one” and not just some trucker named Ted.

Either way, the Brew Crew’s rootin for you.

Slicin’ the Pricin’

Remember that time we told you about Blue Apron’s IPO price? Well it dropped. By a lot.

Blue Apron was ready to slice its way to market at a $16 share price ($3 billion valuation…hold onto that number).

Now? A butchered recipe including:

  • Sky-high marketing costs (25% of revenue)
  • Shakey customer loyalty (60% drop-off rate after six months)
  • Increasing competition in food delivery (you thought we were kidding about Amazon Spoon-feed…)

The company ended up pricing around $10-11 per share—a 30% discount off its initial valuation—equal to a value of $2 billion (last seen in 2015).

Dinner has been served.

No Real Friends

Real life is about to get a lot faker. LiveLike is a virtual suite that offers interactive VR viewing experiences that make you feel like you’re really “in the game” (you’ve gotta check it out).

And now LiveLike’s Fox Sports VR app is turning next week’s CONCACAF Gold Cup social. Users can join a (virtual) room with their Facebook friends and even interact via 3D audio during the game.

Time to strap on your bulky headset, plop yourself down in your underwear and let the good times roll.

Oh, and don’t even get us started on the virtual Dominos. To die for.

What Else Is Happening…

  • Companies are still trying to contain the global ransomware attack that began yesterday.
  • Alibaba (+1.71%) raised its stake in Southeast Asia e-commerce firm Lazada from 51% to 83%.
  • Facebook (+1.77%) launched Discover, a hub within Messenger to find new chatbots.
  • 33 of the largest U.S. banks passed the Fed’s annual stress tests as Capital One (+1.97%) received conditional approval.

 

Economic Calendar


Water Cooler

The Backstory: J.K. Rowling

J.K. Rowling—the author that brought magic and imagination to life in her seven-part series, Harry Potter. The series sold over 450 million copies and has been translated into 67 languages, garnering Ms. Rowling celeb status and a net worth of $1 billion. But Rowling didn’t just apparate her way to fame:

Rowling was born to be a writer, creating short fantasy stories by the age of six—a passion that continued into her early twenties.

It was around this time (while on a bus ride from Manchester to London) that the idea of a young wizard named Harry, as well as his two closest friends, started to form.

But shortly after, with only three chapters to her name, heartbreak struck.

Rowling lost her mother, entered into a marriage that quickly fell apart, became a single mother on welfare and was jobless.

In her own words, “[She] was the biggest failure [she] knew.”

Still, Rowling dusted off her old typewriter and kept on writing. By 1995 she finished her first copy of Harry Potter and the Philosopher’s Stone…only to be rejected by 12 publishers.

Eventually, Rowling got the “okay” from Bloomsbury after the publisher’s daughter had to find out what happened in chapter two.

The book was released on June 26th, 1997. Nearly 10 years later, Rowling introduced the Deathly Hallows, which sold 11 million copies on the first day.

The fastest selling book of all-time.

The Breakroom

Interview Question of the Day

In a country where everyone wants a boy, each family continues having babies until they have a boy. After some time, what is the proportion of boys to girls in the country? (Assuming probability of having a boy or a girl is the same)

(Solution)

Who Am I?

  1. I attended the University of Maryland.
  2. I started my business out of my grandma’s basement in Georgetown, DC.
  3. I originally tried to name my company “Heart.”
  4. I recently bought 530 acres in hopes of raising the next Triple Crown winner.

(Any guesses?)

Stat of the Day

$97 million

That’s how much tax-free income Queen Elizabeth II will receive this year. It’s a 78% raise from the $54.6 million she was paid last year.


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