“I am going to have to go with no. I am not a lizard” — Mark Zuckerberg, during a Facebook Live Q&A. Zuckerberg was responding to inquiries over whether or not he is actually human.
- U.S. stocks chalked up their fifth day of losses after a major announcement from the Fed left investors worried
- Whole Foods fell 5% after receiving a warning letter from the FDA that it has until the end of June to fix serious health problems at its plants, such as condensation from the ceiling dripping into its products (as we reported in yesterday’s Brew)…enjoy your pesto!
Didi Is Not Making it Easy
Uber’s ride to the top of China’s ride-sharing market is an increasingly bumpy one: Didi Chuxing, China’s largest ride-sharing company, recently took home another $7 billion in recent fundraising efforts. Led by $1 billion investment from Apple (shots fired), $600 million from China’s top life insurer, and a host of other major organizations, Didi has not only solidified powerful allies, but is now clocking in with a valuation of around $25 billion. Oh, and the $10 billion in cash Didi has on hand certainly won’t hurt as it competes with Uber to attract passengers and drivers.
Cash for Clans
The action in China doesn’t stop with Didi and Uber: Chinese internet giant Tencent Holdings is nearing a deal to purchase Supercell for roughly $9 billion–a 70% leap in valuation from last year. Supercell, of course, is famous for its iPhone game Clash of Clans (which is famous, or perhaps infamous, thanks to those Kate Upton commercials). The game is still among the most popular on Apple’s App Store—even four years after its release (yes, it’s been out for four years)—and with Supercell’s revenues having grown from €150,000 in 2011 to €2.1 billion last year, it’s no surprise to see Tencent interested. Revenue growth like that is quite an impressive feat considering the short attention spans of mobile gamers (anyone remember Angry Birds?).
Just a Bit of Reorganization
It’s been an interesting few months for Walmart. The largest retailer in the world beat revenue and sales estimates last quarter at a time when other large brick-and-mortar retailers were struggling (Macy’s, we’re looking at you). Now, Walmart has plans to improve its performance even more by slashing back-office jobs in 500 of its stores in an effort to centralize and streamline processes like in-store accounting and invoicing—you know, the fun stuff. Don’t feel too bad for Walmart employees: the company stated that most of the workers will be relocated to other client-facing positions.
Don’t Hold Your Breath
You know that feeling you get when a sequel for a great movie is announced, and you aren’t sure if it will live up to the hype? Well, for Janet Yellen and a growing number of Fed leaders, the plan for two interest rate hikes by New Years is looking a lot like Indiana Jones and the Kingdom of the Crystal Skull. On Wednesday, the Fed not only held its key lending rate steady, but also dampened future projections. Yellen and Co. cited growing fears that the U.K. will say adieu to the E.U. later this month, as well as faltering economic growth and little inflation—all bad signs when you’re at the helm of one of the most important central banks. A rate hike looked all but certain in May, but now? Not so much. Morning Brew pearl of wisdom: don’t hold your breath.
- Bank of America plans more job cuts
- Facebook opens suicide prevention tools to everyone
- Cavium to buy network equipment maker QLogic for $1.36 billion
- Healthcare service providers Envision, AmSurg to merge
- Monday: N/A
- Tuesday: Retail Sales (+); Import/Export Prices (+); Business Inventories (+)
- Wednesday: Fed Meeting Announcement; Producer Price Index (+/-); Industrial Production (-)
- Thursday: Oracle, Kroger, Rite Aid, Smith & Wesson Earnings; Consumer Price Index; Weekly Jobless Claims; Housing Market Index
- Friday: Housing Starts
A WORLD WITHOUT LIKES…
…a world worth living in? Let’s say you have a tough day at work, and…wait, what’s this? Your artsy friend Jason just liked your Instagram photo? Suddenly, all is right in the world. Yes, we all know the sweet affirmation a “like” brings. Enjoy them while you can: according to analytics firm Quintly, the number of interactions on Instagram photos posted by celebs and brands have fallen by 27%. It gets worse when you look at videos—the decline is nearly 40%. Here’s more on this anti-social media phenomenon:
- Why is this happening? Is this the end of days? One theory is that Instagram has just become too popular: users are posting more frequently (at a post per day), meaning there’s more competition for likes.
- Furthermore, the more popular your account, the steeper the decline. In fact, if you have under 1,000 followers, you’ve probably seen a 0% “likes” decline in your photos. Too bad you’re still unpopular.
- But Instagram isn’t complaining: its user base has expanded to 400 million since last year, an increase of 100 million. No doubt Facebook and Mark Zuckerberg, which bought Instagram in 2012 for a humble $1 billion, is a happy lizar—er, we mean man.
INTERVIEW QUESTION OF THE DAY
What is goodwill? How does it affect net income? (Answer)
BUSINESS TERM OF THE DAY
Information Ratio — Ratio of portfolio returns above the returns of a benchmark (usually an index, like the S&P 500) to the volatility of those returns. It measures the ability of a manager to consistently beat its benchmark.
FOOD FOR THOUGHT
SpaceX’s Falcon 9 rocket was oh-so-close to successfully landing on a drone barge yesterday. But then it fell over, crashed and burnt. Next stop, Mars.
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