“Maybe some of the money can pay for personal finance classes for Italy.” – Jeff
Hey there carnivores,
Markets were mixed on Tuesday, as the Nasdaq came back down to earth.
Today we’re discussing the EU pooling its funds.
Jeff & Jason
It was the longest EU summit in more than 20 years, but dealing with stale croissants, burnt coffee, and the crippling fear of coronavirus infection for nearly a week appears to have paid off.
European Union leaders have finally signed off on a €1.8T economic recovery package… and only like 5 months too late. The summit lasted 4 days and included all 27 leaders of the EU.
Share the wealth
The deal marks the first time ever that the bloc has agreed to issue billions of euros in joint debt. The total relief fund will be worth €750B. €390B will be offered in grants, while the rest will be given out as loans to countries that will eventually pay them back. You know, like how loans work.
And if you act now…
Leaders also agreed to increase the bloc’s budget as part of a €1T multiyear deal, which expires in 2027. By my calculation, that’s just in time for the next global economic meltdown.
The budget provides a cushion to help nations that struggle to recover and brings the combined spending power of the EU’s bailout plan to the grand total of €1.8T.
Not so fast
While any progress in a room full of 27 decision-makers is welcome, the deal isn’t final just yet. The European Parliament will still need to vote on the deal, and if Brexit was any indication, this could take a while.
The bottom line…
As you can imagine, the first meeting of European leaders since the beginning of COVID was an absolute sh*tshow. The meeting was plagued with heated debate over how to best provide help to the deadbeat cousins of the EU which are set to receive the largest share of the relief. Looking at you, Italy, Spain, and Greece.
The northern nations, especially the “frugal four” which have been a little bit (read: a sh*t ton) more fiscally responsible for the last few decades, have often been of the “f*ck that noise” persuasion when it comes to giving handouts to their southern counterparts. Which makes this deal all that more impressive.
So why’d they come around? Well, the theory is that spending some money now will help to avoid spending a lot more money down the road. Oh, and probably because Emmanuel Macron slammed his fist on a table.
☑️ The clock is tik-ing.
TikTok isn’t letting a potential ban in the US halt its plans for expansion in the “land of the free.” The short-form video service announced plans to hire 10k employees in the US over the next three years.
The social media platform has already drastically increased its footprint in the US from 500 employees at the start of the year to 1.4k today.
But it’s a bold move considering TikTok has been targeted by Secretary of State Mike Pompeo. ByteDance (its parent company) is based in China and there are concerns about TikTok sharing user information with the Chinese government as well as ByteDance’s ability to censor political content.
Of course, nothing screams “we love Uncle Sam” quite like creating 10k new US jobs…
After a months-long search that began in February, eBay finally found a buyer for its classified ads business. Norway’s Adevinta ASA was the highest bidder, with a $9.2B offer including $2.5B cash and the rest stock.
The move will allow eBay to get back to its core business of pitting strangers against each other to purchase random items online. Classifieds was the last “non-core” business remaining as eBay had recently sold off its stake in StubHub and spun off PayPal in 2015.
The deal will allow Adevinta to boost its online presence in Europe, Africa, and Asia as the company operates a digital marketplace in 15 countries outside of the US. Access to the German market, however, appears to be the biggest win for Adevinta.
☑️ Time to network
LinkedIn just put 6% of its own employees in need of its service. I guess that’s one way to stay relevant…
The Microsoft owned networking platform announced it is cutting around 960 jobs from its workforce as demand for its services has dropped thanks to Covid-19.
It doesn’t help that LinkedIn’s main revenue drivers are ads and fees paid by recruiters. With nobody hiring, recruiters are sh*t out of luck, which means so is LinkedIn. It’s a vicious cycle. The company doesn’t expect to make additional cuts but Microsoft’s stock price was down 1.35% on the day.
☑️ Snap back to reality.
Snap stock dropped 2% yesterday as the company announced its revenue growth decreased in Q2 this year. Although, the social media platform did say that advertisers were increasing their spend towards the end of the quarter.
CEO Evan Spiegel indicated that the company’s daily user base grew 4% from the previous quarter to 238M but came up short of the expected 239M. Revenue rose 17% from the same quarter a year earlier to $454M which clobbered FactSet’s estimate of $442M.
Despite seemingly good revenue numbers, the 17% growth is the lowest Snap has seen since it IPO’d. And it gets worse. The messaging service’s net loss grew by 28% to $326M.
It’s hoping to turn things around in Q3 as revenue is already reportedly up 32% in July compared to last year. If he’s smart, Spiegel will lobby to get TikTok banned in the US…