Facebook’s Bloodbath; 23andMe Teams Up With Pharma Giant; Waymo And Walmart Announce Partnership

The Water Coolest

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THE HEADLINES

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YOU GOT BLOOD ON YOUR FACE …

… you big disgrace. It was a bloodbath in Menlo Park yesterday. Facebook missed revenue projections for the first time since 2015 and its shares plummeted over 20%, wiping out almost $130B in market cap.

Revenue, which is mostly earned from mobile advertising sales (and presumably sales of user’s data), increased 42% to $13.2B but still missed analyst’s projections ($13.3B). Daily active users also fell, as June averaged 1.47B users per day, compared to estimates of 1.48B.

And that’s only part of the picture. Facebook execs delivered a few ominous messages that spooked investors including weakening margins and effects of privacy changes. Shocker.

But Zuck probably won’t be going the way of MySpace Tom anytime soon. EPS beat estimates by a couple pennies at $1.74 per share.  And while DAUs (daily active users) missed estimates, that number is still up 11% vs. last quarter.

Water Cooler Talking Point: “Maybe if you spent less time smokin’ meats and more time at work then the ‘Book wouldn’t have missed estimates, eh Zucker-bot?”

 

HIP HIPPA HOORAY

23andme and GlaxoSmithKline’s partnership sounds like the first fifteen minutes of a low-budget sci-fi thriller. The genetic testing company and pharma giant will join forces to develop new drugs.

GSK will invest $300M in the AncestryDNA competitor, thus forging a 4-year partnership to “cook” up new drugs. The two mad science organizations will split profits right down the middle.

Before the conspiracy theorists head for the nearest rabbit hole, keep in mind that this type of third-party collab is nothing new for 23andMe, though it is the first with the intention of Rx development. In fact, over 80% of 23andMe’s 5M customers have consented to participate in research.

Water Cooler Talking Point: “If you thought the Facebook-Cambridge Analytica breach was a sh*tshow just wait until 23andMe is hacked.”

 

HEADING MY WAY-MO?

Waymo, Google’s self-driving car arm, is making friends in the Greater Phoenix area. The company announced that it would be partnering with companies like Walmart in Phoenix to help users run their errands in the most futuristic way possible.

400 early-rider trial members of Waymo will be able to order their Walmart groceries online, and upon check out, request a self-driving car to take them to the store. Beats waiting for the bus in Phoenix in July, I guess. The move is just one more way that Walmart plans to do battle with Amazon, who is still trying to tackle the whole brick and mortar thing.

Waymo won’t limit itself to just munchie runs, however. The company announced it will be doing business with companies like Avis, for customers who need a ride to a rental car, and AutoNation, for customers who need to get around while a mechanic overcharges them for services they don’t need.

Water Cooler Talking Point: “You had me at ‘using a self-driving car to run menial errands that I’d rather not leave the house for.’ Take notes, Tesla.”

 


IN OTHER NEWS

 

  • Frienemies at last. The US and EU have decided to let bygones be bygones and end their trade spat, announcing plans to wind down current trade barriers and halt any planned tariffs … maybe. Of course, there’s always a chance that the talks fall apart and sh*t hits the fan.
  • Ford, GM, and Fiat Chrysler are having a “Tesla” moment. All three auto giants got pummelled on news that they would lower their earning’s forecasts due mostly to the rising cost of raw materials.
  • The fallout from Toys R Us shuttering its doors is rearing its ugly head again. First, it was Geoffrey relapsing, and now Mattel is planning to cut its workforce. The maker of Hot Wheels and Barbie will slash 2.2k jobs as part of a $650M cost savings effort.
  • Qualcomm will abandon its year-plus long attempt to snatch up rival NXP for $44B. The choice not to move forward will cost Qualcomm $2B in fees and penalties. And you thought your breakup was messy.
  • Classpass raises another $85M, bringing its total haul to $255M. Giving away free classes ain’t cheap.

 

The Water Coolest is a daily business newsletter consisting of business news, financial advice, and unfiltered commentary. Delivered fresh in your inbox every morning so you're ready to snap necks and cash checks. Written by Tyler Morrin, AJ Glagolev, Nick Ellis, and Ian Barto.