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THE HEADLINES

 

THE REMIX

“Frozen orange juice futures aren’t what they used to be.” – Billy Ray Valentine to Louis Winthorpe III, probably

David Solomon is trimming the fat at Goldman. First on the chopping block? The commodities trading arm. Once a needle mover for the prominent bank, the group’s profits have plummeted.

Teams trading iron ore, platinum, and other metals may be the first to be sent packing … because apparently the transport and storage of actual metal is much less lucrative than putting a quant in front of a Bloomberg terminal and letting him or her do whatever the f*ck it is that quants do.

As Goldman hones in on more vanilla businesses like consumer lending and cash, not all commodities groups will get Solomon-ed. Goldman Sachs is still a major player in the oil and energy space.

Something sounds fishy here …

It’s probably no coincidence that the banks former CEO, Lloyd Blankfein, and a slew of execs, including Gary Cohn spent the equivalent of finance puberty “finding themselves” in the commodities group.

DJ D-Sol, an investment banker’s investment banker sent a warning shot across the bow, making it damn clear that no one is safe (well, maybe investment bankers).

You’re not alone

Banking regulations have cleaned up the incredibly lucrative wild west that was commodities trading in the 90’s and 00’s. In fact, many banks, including JPMorgan have exited the business altogether. But the fun police haven’t gotten their paws on less-regulated firms like Glencore.

 

SHRINKAGE!

You might want to sit down before you read this. Ok, are you ready? Snap stock went up twenty percent following its Q4 earnings release.

*Spits out coffee* What happened?

The tasteful n00dz app reported fourth-quarter sales of $389.8M, which exceeded analysts estimates of $377.5M. This resulted in a net loss of $192M or 14 cents per share, which beat analysts estimates of 19 cents.

Snap’s swelling top line was due in large part to the company’s ability to add more advertisers using automated tools. But that’s not the real reason for the stock jump …

Tell me more …

What really got investors hot and bothered was that Snapchat’s user base stopped shrinking. Let that sink in for a second.

Snapchat’s daily active users remained flat at 186M, compared to Wall Street’s estimate of 185M. The company is cautiously optimistic that users will remain level again this quarter.

UPVOTE

Reddit is raising more dough. It’s reported that the company is in talks with Chinese internet giant Tencent to close a series D round worth around $150M at a valuation of up to $2.7B. That’s a lot of Reddit Gold.

Speaking of Reddit Gold, that’s one of the ways that the meme-factory has been making money. Depending on who you ask, the front page of the internet pulled in approximately $100M in revenue for the first time ever. Reddit’s a private company, so, for now, we’ll just need to speculate.

According to Reddit, the social network is the home to 330M monthly active users, spread across 150K subreddits, and that doesn’t count the countless number of people just browsing to kill time at work without a login. Reddit’s last valuation hit $1.8B after a $200M funding round in July of 2017.

Privacy, please

When that last round of funding hit, the firm had been owned by Conde Nast, which bought the aggregator back in 2006, just one year after it launched. The site is now privately owned.

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IN OTHER NEWS

• Blackstone, the world’s largest private-equity firm announced that it is backing out of its proposed African investment. The company had planned to identify and fund $2.5B worth of projects through the African infrastructure company (seemingly named by the writers of ‘Austin Powers’), Black Rhino. According to a spokesperson, Black Rhino couldn’t identify big enough projects that met the fund’s investment criteria.

 

• Botox maker, Allergan is under pressure from hedge fund manager David Tepper, who is clamoring for the CEO and Chairman roles to be split up at the company. Making matters worse, the FDA approved a Botox rival called Jeuveau which could cut into the company’s $3.5B revenue stream.

 

• All the way up. Boeing shares reached an all-time high on Tuesday thanks to an investment in supersonic business jet developer, Aerion. High-speed commercial jet travel is clearly the future of commuting. If nothing else, it is more realistic than the Hyperloop …

 

• The force is with this one. Disney beat the street on earnings and revenue following the release of its quarterly report yesterday. Stellar quarters among the brand’s media networks and theme parks buoyed the announcement, while CEO Bob Iger noted that ESPN+ paid memberships hit 2M.

 

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