🍋 AMZN Takes on Spotify

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"Busy is a decision. You don’t find the time to make things, you make the time to do things." — Debbie Millman

Good Morning! The job market is still hot according to new data, the Fed is expected to raise interest rates another 75 basis points today. Former CNN boss Jeff Zucker is now a finance bro and plans on joining private equity firm RedBird Capital Partners.

Ad giant IPG advised brands to pause Twitter spending until the platform provides more clarity on trust and safety protocols. Twitter plans to end ad-free article offerings, and Musk suggested that Twitter users may soon have to pay $8 every month if they want a verified account.

NYC employers are now required to post salary ranges in job postings, and some think this rule could eventually become the norm across the country.

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As promised, downloadable guides here:

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Facebook is down 72% for the year, with investors questioning Mark Zuckerberg's metaverse bet. If you are interested in modeling out where Meta goes from here, Daloopa is giving away Meta's detailed financial model to Short Squeez readers.

1. Story of the Day: AMZN Takes on Spotify

The Great Re-bundling is raging on - or is it? Amazon announced yesterday it will expand its ad-free music collection from 2 million to 100 million titles for Prime members.

But is Amazon going on offense to take on Spotify and Apple Music, or was the company strong-armed into making pricey concessions for members after several years of stagnating growth?

Amazon Prime is one of the world’s most successful subscription services with 200 million members to date. A Prime membership and subsequent free two-day shipping have become a staple for many Americans, and the extra perks don't hurt, either. But other companies are beginning to eat away at the tech giant’s market share.

Amazon's competitors like Walmart, Costco, and Disney offer their own subscription models that combine merchandise perks with streaming services. Amazon Prime membership is expected to only grow at a measly 2% rate by 2025, and the company feels pressure to entice customers with added services.

The company hopes its new plans will grow the momentum and help the already rapidly-growing Amazon Music dethrone Apple as the second-largest music service by subscriptions.

But investors worry making its library ad-free will hurt the company’s bottom line. By expanding its ad-free catalog, Amazon can’t count on advertisers to subsidize operating costs. 

Takeaway: When new business models run into problems, don’t underestimate the power of borrowing from older ones. Companies are racing to grow their subscription bundle services, and they’re learning they’ll need to make concessions to win over customers.

Amazon expanding its music catalog could help the company capture market share, but investors aren’t too thrilled at the cost of ad revenue. Amazon’s stock closed under a $1 trillion market cap yesterday for the first time since 2020.

2. Markets Rundown

If you want access to Wall Street insider interviews, industry deep-dives, and investment ideas, check out our Insiders newsletter.

Wall Street slipped as job openings dampen hopes the Fed will pivot to lower rates.

Movers & Shakers

  • (+) Uber ($UBER) +12% after the company beat revenue expectations.

  • (+) Peloton ($PTON) +6% because the company struck a deal with Dick's Sporting Goods to sell bikes.

  • (–) Ecolab ($ECL) -9% after the water treatment company warned it could be harmed by macroeconomic conditions.

Private Dealmaking

  • Bright Machines, a software company for robots, raised $132 million

  • Cover Genius, an insurtech startup, raised $70 million

  • Cresilon, a biotech company focused on stopping bleeding, raised $25 million

  • Johnson & Johnson will buy heart pump maker Abiomed for $16.6 billion

  • Veritas Capital bought Wood Mackenzie, an energy research and consulting unit, for $3.1 billion

  • Cinven bought TaxAct, a tax preparation software provider, for $720 million

Top Reads

  • Job openings post surprise jump, putting pressure on Fed (CBS)

  • October U.S. manufacturing activity was slowest in 2.5 years (Reuters)

  • Why stocks rally when everything else is getting worse (YF)

  • Federal debt interest payments could soon exceed military spending (CNN)

  • Stock futures flat ahead of key Fed policy decision (CNBC)

  • 4 reasons why inflation surged to a 40-year high (MW)

  • Pandemic turns heads toward co-op business model (Axios)

  • Can finance slow deforestation? (Economist)

  • Delta pilots weigh strike amid contract negotiation as holidays near (Axios)

A Message from Daloopa: Update Models with 1-click

Part of being a finance professional consists of being one of the world's best-paid data-entry professionals.

It's a pain—and a rite of passage—to build a financial model by painstakingly transcribing information from 10-Qs, 10-Ks, presentations, and transcripts. Or, at least, it was: Daloopa uses machine learning and human validation to automatically parse financial statements and other disclosures, creating a continuously-updated, detailed, and accurate model.

Thomas Li (CEO) puts it best: "Daloopa collects literally everything a company discloses."

Facebook is down 72% for the year, with investors questioning Mark Zuckerberg's metaverse bet. if you are interested in modeling out where Meta goes from here, Daloopa is giving away Meta's detailed financial model to Short Squeez readers.

4. Book of the Day: Everybody Lies

By the end of an average day in the early twenty-first century, human beings searching the internet will amass eight trillion gigabytes of data.

This staggering amount of information—unprecedented in history—can tell us a great deal about who we are—the fears, desires, and behaviors that drive us, and the conscious and unconscious decisions we make.

From the profound to the mundane, we can gain astonishing knowledge about the human psyche that less than twenty years ago, seemed unfathomable.

Everybody Lies offers fascinating, surprising, and sometimes laugh-out-loud insights into everything from economics to ethics to sports to race to sex, gender and more, all drawn from the world of big data.

“I am now convinced that Google searches are the most important dataset ever collected on the human psyche.”

5. Short Squeez Picks

A Message from Personal Capital

Are your savings on track for retirement?

Download the Personal Capital app and use their free, award-winning financial tools to see all your accounts in one place, calculate your ideal retirement age, and learn your total net worth.

6. Daily Visual: Consumers Still Have 75% of Pandemic Excess Savings

US Household Excess Savings

Source: Axios

7. Daily Acumen: How To Choose Your Next Book

"Most people read the same new books that everyone else has read, not necessarily for the ideas but for the social reward of being able to talk about them with others.

Reading the same thing as everyone else is only going to put the same ideas in your head that everyone else has. If you want new ideas, read old books."

Source: Farnam Street

8. Crypto Corner

9. Memes of the Day

 

 

 

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