Monday Dec.09, 2019

Google's robotaxi moonshot is worth 8 Lyfts

_Hiding from Google's self-driving cars_
_Hiding from Google's self-driving cars_

Hey Snackers,

3 numbers we couldn't shake all weekend:

  • $120K for a banana taped to a wall at an art show.
  • 266K new jobs added in November, the highlight of a gorgeous jobs report (that makes 110 straight months of job increases).
  • Is it possible that 70% of new pet owners are going to be Chewy customers? The online pet store reports earnings today.
Robo

Waymo's robotaxi app is now available to all (beware of the waitlist)

Excuse me driver, can you slow down on the ads?... Self-driving cars are the most-talked about things that don't exist yet since the "phase one" US-China trade deal. But Alphabet geared up to make robotaxis a reality last week by launching its Waymo app in Apple’s App Store (it's been chilling already in the Google Play store since April).

  • 1 year ago: People in Phoenix (aka Phoenixians?) could become early adopters of Waymo, but they first had to sign Non-Disclosure Agreements. About 1,500 people have taken 100K+ rides so far, usually with a human safety driver behind the wheel (just in case).
  • Today: Both iPhone and Android users can download the Waymo app and join a waitlist. It's still only available in the Phoenix area, but they've started doing rides with nobody behind the wheel at all.

Whoever offers Robotaxis first will probably win a ton of business... Our rough math estimates that a $10 ride becomes a $5 ride with self-driving cars:

  • $10: The fare of our simulated Uber ride.
  • $7: The rough amount the driver gets to keep.
  • $2: The amount needed to cover gas, insurance, and the car payment.
  • $5: The cost of the driver. This is the number that vanishes with robotaxis — roro-rides could become half the price of human-driven Lyft or Uber rides.

This could be Google's last moonshot... Waymo was born in Project X, which is a lab for Googlers to dream up "moonshot" projects that have nothing to do with Google’s core business of online search ads.

  • But Google's co-founders retired last week, and its new leaders could focus on profit-making businesses only — not the kumbaya projects that ex-leaders Larry Page and Sergey Brin championed.
  • Yet it looks like they raised a profit puppy with Waymo — the robotaxi service is estimated to be worth $105B. That's 8 times as much as Lyft.
Highs

Who's up...

Otis made skyscrapers possible... The 166-year-old elevator company is big enough to be its own Fortune 500 company, with $13B in revenue, 69K employees, and 2M elevators in service worldwide. In April, owner United Technologies is spinning off Otis into its own publicly-traded company to unlock its value. Otis makes serious bank in China, where all that new city construction needs vertical help, so it's praying the trade war doesn't get too bad.

That partnership looks good on you... Marriott's W Hotel chain found a cost-effective, well-dressed marketing move — hook up with Rent The Runway so that guests don't have to pack as many clothes. For an extra $69, your room could come with 4 wardrobe options to rent during your W stay. The brand move keeps the W relevant — and snags exposure for Marriott to Rent The Runway's younger customer base.

Lows

...And who's down

Buffering... Buffering... Remember when Zoom was the most profitable tech company to IPO in 2019, and its shares jumped over 50% on the first day of trading? The video conferencing leader's stock dropped 15% last week on word that growth is slowing. Zoom’s CEO wants to “focus on existing customers” — but shareholders crave new ones and some crystal-clear user growth.

Any press = Good press... Debatable. Peloton's new viral TV ad is jacked with controversy. Sexist and elitist? Arguably and most definitely. But it also has everyone chatting Peloton during the at-home fitness company’s most important sales season. Peloton shares dropped 8% last week — then the ad’s actress owned the drama by jumping into a commercial for Ryan Reynolds' gin brand, drinking her cycling-induced worries away (new trend = post-controversy sequel ads).

What else we’re Snackin’

  • Work: 15 rules for negotiating a job offer — beginning with 'ignore ultimatums'
  • Life: 5 cocktail trends of 2020 (it's all about the ice, ice, baby)
  • Invest: The money you could make by maxing out those 401K contributions
  • Venture: "Cash is more important than your mother" (if you're a startup)
  • Crypto: Only 1 major cryptocurrency is beating Bitcoin this year — and it destroys some of its own coins every quarter

This Week

Disclosure: Authors of this Snacks own shares of Uber and Lululemon, options of Peloton, and a Bitcoin

ID: 1031082

Get Your News

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Latest Stories

Tech

SpaceX is creating NASA spaceport congestion problems

NASA is considering expanding its Wallops Island, Virginia, facilities to support three times as many rocket launches, TechCrunch reports. Why does it need space for that many rockets? Mostly Elon Musk’s SpaceX. Launches by SpaceX and other private space exploration companies have been taking off in recent years.

Currently the Wallops Flight Facility authorizes 18 launches a year. The proposed additions could bring that number up to 52. Given that the U.S. had 116 launch attempts in all of last year, an additional 34 launches adds a lot more capacity in an increasingly lucrative space.

The space economy was already worth $564 billion in 2022 and is expected to grow another 41% in five years.

Currently the Wallops Flight Facility authorizes 18 launches a year. The proposed additions could bring that number up to 52. Given that the U.S. had 116 launch attempts in all of last year, an additional 34 launches adds a lot more capacity in an increasingly lucrative space.

The space economy was already worth $564 billion in 2022 and is expected to grow another 41% in five years.

Go Deeper with Market Depth

Nasdaq TotalView powers the need-to-know data serious investors rely on.

Scuba Diving in the Wild Blue Yonder in French Polynesia
Markets

Carvana’s stock is sometimes up, sometimes down, always volatile

Shares in online car seller Carvana surged some 34% yesterday, continuing their recent resurgence. That rebound has made the father-son duo behind the company some $11B since late 2022 — a period when the stock was dropping as much as 40% in a single day, and was teetering on the verge of insolvency as creditors explored options to restructure its debt.

Since then the company, famous for its “car vending machines”, has seen its fortunes reverse, as the used-car market has stabilized and sales have returned to growth (up 17% in Q1 2024). Most importantly, however, Carvana seems to have gotten a handle on its massive $5B+ debt load — which was a major factor in why the equity in the company was so volatile — after swinging into profitable territory in Q1.

Yesterday’s move leaves the stock up more than 16x in the last 12 months.

Carvana stock volatility

Since then the company, famous for its “car vending machines”, has seen its fortunes reverse, as the used-car market has stabilized and sales have returned to growth (up 17% in Q1 2024). Most importantly, however, Carvana seems to have gotten a handle on its massive $5B+ debt load — which was a major factor in why the equity in the company was so volatile — after swinging into profitable territory in Q1.

Yesterday’s move leaves the stock up more than 16x in the last 12 months.

Carvana stock volatility

Your inbox is ready

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

$110B

Apple announced a massive $110B boost in share buybacks — the biggest of all time. That’s even higher than the $90 billion analysts expected. For context in the last 12 years Apple spent a total of $650 billion buying back its own stock. The entire S&P 500 did $795 billion last year. That certainly softens the blow from a 4% decrease in revenue.

Ozempic, Wegovy drive Novo Nordisk profits up

Shares of Danish drugmaker Novo Nordisk fell on Thursday, as investors digested the latest hard numbers from the maker of heavily-hyped drugs Ozempic and Wegovy.

For the record, sales of both continue to explode, though sales of Wegovy, which more than doubled to kr. 9.8B, came in about 10% below analyst expectations. Ozempic sales, which slowed, actually were better than expectations.

In Danish currency terms, Q1 profit jumped 28% for the company, which is based in suburban Copenhagen. Novo Nordisk’s market value of roughly $570 billion is now larger than the entire Danish economy.

Luke Kawa
5/2/24

Short sellers are getting squeezed on Carvana, Wayfair, and Enovix

Shares of Carvana, Wayfair, and Enovix were ripping Thursday morning.

These companies don’t have too much in common from a business operations standpoint — one makes batteries, another needs batteries, and one sells furniture and rugs that really tie the room together.

What they do have in common right now though: traders were betting on their shares to fall, and each released quarterly earnings reports either after the market closed on Wednesday or on Thursday morning that weren’t as bad as feared, in one way or another.

As of mid-April, short interest as a percentage of equity float for these stocks ranged from 26% (Wayfair) to 31% (Enovix), according to exchange data.

Betting against two of these companies had paid off so far this year, with Carvana being the exception. Shares of the used-car retailer were up 78% heading into Thursday’s session versus Wayfair (-14%), and Enovix (-47%). For comparison, the S&P 500 Index is up 5.8 percent year-to-date.

Hat tip to Tom Hearden, senior trader at Skylands Capital, for bringing this to our attention.