Good morning everyone,
Today we’re talking Elon securing a deal (almost) with the SEC, Amazon getting one step closer to same day delivery, and people really, really like The Avengers.
Enjoy the next 4 minutes and 2 seconds.
Jeff & Jason
‘Avengers: Endgame’ has been kicking the dick off of box office records around the globe for the past week. This, of course, comes as little surprise considering the success of the Marvel Cinematic Universe … save for ‘The Incredible Hulk’ *shudder*.
Most of those records were previously held by ‘Avengers: Infinity War,’ which blew nerd’s minds last year. In just five days, the latest Marvel masterpiece has hauled in a staggering $1.2B (with a B) at box offices around the globe. This marks the fastest a film has ever reached the billion dollar mark and breaks the previous record for highest weekend total of $641M, a record held by, you guessed it, ‘Infinity War’.
Stateside the film earned $350M during its opening weekend, which shattered even the revised forecasts that Disney set ($340M). It’s even possible that the film reaches the $360M mark before you read this on Monday morning, depending on how many fanboys and girls chose ‘Endgame’ over ‘The Battle of Winterfell.’
Despite a runtime of 3 hours and 2 minutes and multiplexes contractual obligations to show other movies, ‘Endgame’ earned an average of $75k per theater, annihilating the previous high water mark of $59.9k set by ‘Star Wars: The Force Awakens’ in 2015. Suck it, Kylo Ren.
Bottom line: “Wow, I can’t believe Thor dies …” – Jeff
Buried the lede
“Lost” in a sea of “$90B valuation” headlines is an investment with massive financial and strategic implications. PayPal has invested $500M in Uber at $78.8B valuation, in what presumably will be the ride-hailing pioneer’s final private funding round before its IPO.
The investment stands to benefit both companies. Uber is really, really good at losing money, so half a billion dollars should help line the coffers ahead of its next, more public fundraising. And PayPal will continue its proven model of latching onto high growth companies as a means of expanding its payments empire. Plus PayPal’s network and expertise may be able to help boost Uber’s “Uber Cash” product which has been about as popular as Elon Musk at SEC HQ.
“The same thing we do every night Pinky, try to take over the world.”
After losing its status as eBay’s preferred payment option last year PayPal has managed to do something Uber hasn’t quite mastered: become profitable. In fact, just last week PayPal posted an impressive Q1 earnings report: an EPS increase of 34% and 9.3M net new active accounts.
And investors are noticing PayPal’s gainz. Shares are up more than 30% YTD.
That’s not all
But it seems that PayPal learned its lesson from going all in on its eBay partnership. The payments provider which counts Peter Thiel and Elon Musk as alumni refuses to be a one-trick pony. The $500M Uber deal isn’t even its largest investment of 2019.
That honor goes to MercadoLibre, aka the eBay of Latin America. The $750M investment will allow Venmo’s parent company to tap the fast-growing LatAm marketplace via its payment processing capabilities. PayPal and the MercadoLibre have worked together in the past but sh*t just got real.
Smaller PayPal investments include Raisin, PRPO and Viva Republica. All of these strategic moves are undoubtedly related to the pressure PayPal is facing from vendor’s internal payment processing technology, like Alibaba’s Alipay.
Bottom line: “Apparently transferring money for free isn’t lucrative after all.” – Jason
Amazon is turning up the heat on its e-comm rivals by offering free 1-day shipping as the standard delivery option for Prime members *realizes why Prime membership cost recently rose*.
Over the course of Q2, Jeffrey Commerce will invest some $800M in improvements to warehouse and delivery infrastructure to make this a reality. Prime currently has more than 100M users and reaches upwards of 50% of US households. In December of 2017, that number was at just 91M paid subscribers.
How’s everyone taking the news?
While Target and Walmart have been making strides in their respective online businesses, this will certainly be a large hurdle to overcome in the battle with Bezos. Target did see e-comm sales increase 28% year-over-year in 2018, but experienced a stock price drop of 6% on news of Amazon’s updated Prime offerings. Target offers free two-day shipping to all of its credit card holders.
The home of the people of Walmart saw a 2% drop in stock price following the Amazon announcement, which comes on the heels of an earnings report that indicated e-comm sales rose 43% year-over-year. The Arkansas-based mega-retailer offers free two-day shipping on orders over $35 (down from a $50 minimum), free in-store pick-up, and online grocery delivery from more than 800 locations.
Amazon’s stock rose 1% on Friday.
Bottom line: “Soon we’ll be in a ‘Minority Report’ situation where Amazon is delivering things before you even know you need them.” – Jeff
IN OTHER NEWS
- E-Trade is close to bringing cryptocurrency trading to its customers. Users will be able to test the waters with bitcoin and ether but should be able to lose substantial sums of money with other cryptos in the near future. If there was ever a time to bring the E-Trade baby out of retirement, it’s now.
- We’re just talking … Apple is considering acquiring a portion of Intel’s smartphone modem chip division. These talks started last year but were put on hold when Apple signed a multiyear model supply deal with Qualcomm. If the deal closes, it would significantly speed up Apple’s goal of developing wireless technology for its devices in-house.
- Slack officially filed for an IPO on Friday. The messaging company saw its revenue increase 82% YOY to $400.6M, but still racked up significant losses as it increased its spend on marketing and sales initiatives. Shares could start trading on the NYSE near the end of May.
- Elon and the SEC have reached a deal over the CEO’s tweets. The two parties agreed to a list of financial milestones that Mr. Musk cannot post about without pre-approval, like, indicating that the company is going private and that funding is secured when it is not. The good news for P.T. Musk is that he won’t face new penalties for statements that violate his original SEC order.
↗ *Puts Calvin peeing on Chevy logo sticker on Ford F-150* Ford had itself a Friday, closing up 10.7%, its biggest 1-day move in more than a decade, following a blowout earnings report. Ford beat an estimated EPS of 27 cents by 17 cents. The company that’s as American as Apple pie has the North American segment to thank for its electric quarter.
↘ Intel beat Q1 expectations on Friday. That in and of itself will is a good thing. So why did investors send shares plummeting 9%? The company slashed its outlook for 2019, recalibrating its revenue estimates from $71.5B to $69B … thus making everyone with the sense of humor of a high school student chuckle and sending investors for the exits. Intel blamed headwinds in China, because obviously, and a decline in memory pricing.