November 2, 2020
Good morning! Tech giants Amazon, Apple, and Facebook issued dire warnings last week, cruises are setting sail again (kind of), and Nestle picks up meal delivery Freshly.
Big Tech predicts big trouble in Q4
Coronavirus cases are rising and anticipated delays in 2020 election results could spell a troubling fourth quarter. Tech giants Amazon, Apple and Facebook issued dire warnings last week—even though they aren’t the ones who should worry.
Small businesses don’t have billionaires to fall back on. If the Big Tech companies are sounding the alarms, imagine how these mom-and-pop shops feel?
Big Tech Is Scrambling. Here are 3 examples:
Amazon: The home delivery giant invested $11 billion in COVID-19 safety needs so far this year, including $4 billion in Q4 alone. But investors shouldn’t worry. Amazon still predicts a profit, albeit how much remains unclear.
Apple: Want to know how many new iPhones and iPads will be sold? Apple would sure like to know, too, but expectations are in flux because coronavirus case spikes internationally make the new models inaccessible to in-person shoppers.
Facebook: Imagine if real life mirrored the discourse on Facebook? Delayed election results could make that terror a reality, so Mark Zuckerberg and company are going “well beyond what we’ve done before” to weather the anticipated chaos.
On the other hand, no stimulus or federal relief proposal is expected until at least next week or even next year. By then, who knows, we still might not have an election winner.
Nestlé diets during the pandemic
Nestlé, the company best known for sugary, fat-inducing, delicious chocolate, just spent up to $1.5 billion to acquire Freshly, a healthy meal delivery service. Now, Nestlé can reach two key consumers: the stress snackers and the inexplicable pandemic dieters.
Freshly already dishes out 1 million meals across 48 states, and this deal gives the company extra incentive to grow those figures. Nestlé paid $950 million with the potential to add up to $550 million in additional earnouts should Freshly continue to grow.
Details behind the deal:
OK, the chocolate bars and the brown bunny may stand out the most for Nestlé, but the company is actually much bigger than that — it’s the largest food and beverage company on Earth. Freshly just adds to that empire.
Nestlé already had a 16% stake in Freshly from a Series C investment back in 2017. Freshly was founded five years prior to that.
Freshly hit profitability in 2019 and this year’s sales are projected to be around $430 million.
The deal, which closed Friday, should help Freshly accelerate delivery times and reach more potential customers than before. So if you don’t have Freshly available to you now, just wait until it’s as easy to buy as a candy bar.
Anchor up! Cruise industry is back, kind of
The U.S. cruise industry celebrated its best news since March the same time the rest of the stock market suffered its worst week since the pandemic started. CDC officials lifted a seven-month ban on cruise ship operations, and the market responded accordingly.
But don’t set sail just yet. Passengers can’t declare bon voyage until new health safety measures are put into place to avoid becoming floating death traps (again).
The people have spoken:
Approximately 75% of the 13,000 comments submitted to the CDC were supportive of reopening cruise ships, and even more (85%) supported face masks onboard.
Nonetheless, we still don’t know when cruises will resume operations. Royal Caribbean predicts Dec. 1 is the soonest operations can restart, but first they must satisfy a new set of CDC safety guidelines.
The cruise ship companies are motivated to act fast. Carnival revenue dropped 99% year-over-year in Q3. That’s a monthly loss of $770 million for one company alone.
So there might be a few people anxious to jump ship, but are there enough die-hard cruisers out there to save the cruise industry? We’ll find out soon.
If you spent your PPP loan on a $200,000 Lamborghini, then you should probably be prepared to meet a familiar similar to this Texas man who was arrested last week.
The beloved actor best known better as James Bond (than anyone else), Sir Sean Connery, died over the weekend. Connery, 90, won an Academy Award in 1988.
Do you believe in the conspiracy theory that gas prices always go down near an election? Well, gas prices dipped below $2 per gallon in most places amid decreased demand.
Christmas may be around the corner, but don’t get too excited: Any investment this holiday season on new gadgets may not pay off until the technology catches up.
Financial Tech, or “FinTech” if you’re cool, is all the rage among investors after an initial cool-off to start the pandemic. Will the FinTech gold rush last?
- Both the customers and the staff can avoid contracting COVID-19 when your server is an A.I.-controlled robot.