Billion Dollar Shave Club, Plus Facebook Messenger Now Has Over A Billion Users
“Finishing off the plan while listening to the soundtrack from Gatsby. Seems appropriate…” — Tesla CEO Elon Musk. The ambitious tech leader finally unveiled the second installment of Tesla’s “Master Plan” late last night. To put it simply, Musk wants Tesla to become a renewable energy enterprise.
- U.S. markets finished higher with the Dow marking its 9th consecutive positive close, as earnings boosted sentiment and the tech sector had its best day in 16 years. 16 years, people
Alternatives to Watch
- The positivity in U.S. markets boosted the value of the dollar, sending gold and silver prices to three-week lows
- Shares of pizza maker Papa John’s popped up over 3% after a KeyBanc analyst upgraded the stock, believing that more people will be ordering delivery instead of going to restaurants due to recent political and social disruptions. Interesting analysis there
Billion Dollar Shave Club
…Unilever just became a member. The consumer products company is dropping one billion in cash to acquire Dollar Shave Club. The California-based startup launched just four years ago with this hilarious video and has grown by leaps and bounds ever since. The Club still isn’t profitable, but it managed to collect $152 million in sales last year and is expected to bring in more than $200 million in revenue this year. With the purchase, Unilever is hoping to attack Procter & Gamble—which controls 59% of the razor market—while also targeting millennials in this Amazon-dominated era.
Morgan Stanley Squeaks By
…With some solid numbers. In keeping with the trend of successful earnings reports of its competitors, Morgan Stanley one-upped estimates. Although profits plunged 14% in the second quarter, the bank saw gains due to bond-trading revenue and (unfortunately for employees) slashed compensation costs. MS was the last of the six major Wall Street banks to report earnings, rounding out a rock-solid quarter for the financial sector—Goldman Sachs, Bank of America, Citi and JPMorgan Chase all beat expectations too.
Messenger Hits the Big ‘Nine-Zeroes’
…Reaching a billion users. Messenger just crossed the one billion users mark, meaning Facebook now has three apps with more than one billion monthly active users (WhatsApp and Facebook are the others). The second-most popular iOS app of all time (second only to Facebook), hit a billion users just three months after reaching 900 million. Perhaps most shockingly, Facebook Messenger hasn’t even begun to make money. Messenger Chief David Marcus said, “We’re not really under a ton of pressure to monetize.” With one billion users, we’ll see how long that lasts.
Ready, Set, Bid
…eBay is the winner. The online auction service posted better-than-expected earnings after the closing bell yesterday. The highlights? Revenue: $2.23 billion. Net income: $437 million. Earnings: $0.01 over analysts’ predictions. Solid. eBay has been focusing on its fixed price business, as a way to challenge almighty Amazon (and because bidding has been on the decline). The retailer also benefited from StubHub, which raked in $225 million in revenue, up 40% year over year. Investors like that very much, sending shares up 6% after hours.
- Feds want Wolf of Wall Street profits due to fraud allegations
- Anheuser-Busch wins approval for SABMiller deal
- Pokémon Go launch in Japan postponed after data leak
- HSBC banker arrested at JFK in foreign exchange probe
- Monday: Bank of America (+), IBM (+), Netflix (+), Yahoo (-) Earnings
- Tuesday: Goldman Sachs (+), Johnson & Johnson (+), Microsoft (+) Earnings; Housing Starts (+)
- Wednesday: eBay (+), Morgan Stanley (+), American Express (+) Earnings
- Thursday: AT&T, Chipotle, General Motors, Starbucks, Visa Earnings; Weekly Jobless Claims; Existing Home Sales
- Friday: General Electric, American Airlines Earnings
IT’S GETTING HOT IN HERE
So cut down all your GDP projections. According to disturbing new research from the United Nations, rising global temperatures will have some serious negative effects on the world economy. UN researchers predict that it’s going to get so scorching that some workers—in industries like construction and farming—won’t be able to do their jobs. Here come the numbers:
- The UN projects that the total cost of rising temperatures will be $2 trillion by 2030. $450 billion of that sum will be from China and India alone. Yikes.
- Ghana and Nigeria (where it’s already hot enough) are projected to lose the most, with nearly 6.5% of their GDPs estimated to be wiped out. On the other hand, the U.S. economy is only expected to take a cut of 0.2%.
- Meanwhile, Southeast Asia is already seeing economic consequences, as 15-20% of annual work hours have already been lost in heat-exposed jobs.
- What are nations doing to beat the heat? The 2015 Paris Agreement was made to keep the average global temperature “well below” a 2°C increase. Yet, prominent countries like China have yet to ratify it.
INTERVIEW QUESTION OF THE DAY
What factors can lead to the dilution of EPS in an acquisition? (Answer)
BUSINESS TERM OF THE DAY
Naked Position — A securities position that is not hedged from market risk. Both the potential gain and the potential risk are greater when a position is naked instead of covered. Example: writing calls on a stock without owning the underlying security.
FOOD FOR THOUGHT
One Wall Street analyst believes that Pokémon Go could generate $3 billion in revenue for Apple over the next 18 to 24 months, as it gets a cut from sales of in-app purchases. $3 billion, people. Everyone knows you have to pay to keep more Pokémon in your Pokédex.