🍋 Meta is Zucked

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Good Morning! In inflation news of the day, gasoline prices are wylin' and are only three cents away from a new 7-year-high. Valentine's Day and wedding szn also just got more expensive with bottles of bubbly expected to cost a lot more. Airlines are asking Biden to stop requiring negative COVID tests as mandatory for international travel. Anecdotal evidence suggests Americans are less worried about testing, and more worried about when the boozing will return. The Washington Football Team has officially changed its name to the Commanders. Seems like they've been listening to too many manifestation podcasts, trying to will their way to a winning season.

Today's sponsor, Polymarket, allows you to trade on real-life events including when Kanye West will release Donda 2.

1. Story of the Day: Meta Down Bad

An identity crisis isn't the only trouble that the folks over at Meta are dealing with. On Wednesday, shares dropped more than 20% after missing on earnings, weak guidance, and increased competition in the social media space.

Even though Meta finished the fiscal year with over $100 billion in revenue for the first time, they fell short on EPS with an actual figure of $3.67, compared to the $3.85 expected. They also shot themselves in the foot with a low Q1 forecast of $27-29 billion, compared to the $30.2 billion analysts were expecting.

Facebook conceded that they "expect continued headwinds from both increased competition for people's time and a shift of engagement within our apps towards video surfaces like Reels..." On the bright side, maybe it's a good thing that people aren't spending their time reading conspiracy theories their Aunt Karen is posting. For Meta shareholders, this shift in focus is not great since Reels monetize at lower rates than the Feed and Stories functions.

Since Meta makes a vast majority of its money from advertising, acknowledging headwinds of competition and metric tracking changes from Apple iOS (potentially costing $10 billion in 2022) is bad news for them. They do have other revenue sources, but nothing to write home how about just yet. Facebook Reality Labs, for example, reported revenue of $877 million for the fourth quarter with a $3.3 billion operating loss on the side.

Short Squeez Takeaway: While Facebook may have been first to get a billion people on its platform, it certainly won’t be the last. TikTok has exploded over the last couple of years and taken over a large chunk of our screen time, which everyone is "trying their hardest" to decrease anyway. It’s probably time Meta manifests its name change to more Meta revenue streams. Tho if people are serious about getting off their phones and out into the real world, then maybe creating a virtual world won't help the freefallin' stock.

Source: MarketWatch

2. Markets Rundown

Tech shares lead major indices to fourth straight day of gains, while cryptos fall facing increased volatility.

Movers & Shakers

• (+) Alphabet ($GOOGL) +8% on positive outlook for upcoming stock split.

• (-) Lucid Group ($LCID) -7% after investors move away from speculative names in electric vehicle space.

• (–) PayPal ($PYPL) -25% the worst selloff on record due to unfavorable guidance and strategy changes.

3. Top Reads

• Learn from a groundhog about forecasting (FandF)

• They wrote a book about us! (WSJ)

• Watch out Venmo, Zelle is coming in hot (Protocol)

• Housing market continues to baffle (AWOCS)

• Bottle popping could take a hit (FOX)

• Happy Lunar New Year to Costco (MW)

• Chocolate factory shuts down... golden tickets to come? (BBC)

• Gaming giant EA positive about future (WSJ)

• Being "woke" may not save the planet, but will crash markets (ZH)

A Message from Polymarket: Donda 2/22/22

Kanye West has had a turbulent few months since the release of his album Donda in 2021. His separation from Kim Kardashian went public, he held a joint benefit concert with his former enemy Drake, and he entered in a new relationship with model Julia Fox. With all this, fans were doubtful we’d get new music any time soon, but Kanye has announced that he plans on releasing Donda 2.

West revealed on Instagram that Donda 2 was the album’s official title, and that it would be released on a special date: 2/22/22. The United States is getting a Pluto return on the same day Donda 2 is supposed to be released. A Pluto return occurs every 248 years, making this the first in the United States since before the country was founded.

Will Kanye West release 'Donda 2' (or another new album) by 2/22/22?*

Given his track record (no pun intended), Polymarket traders are currently forecasting a 27% probability that Kanye will be able to get this album done by 2/22/22. Will Kanye surprise us all or will we see a delay? Follow the odds now on Polymarket!

4. Book of the Day: The Dawn of Everything: A New History of Humanity

For generations, our remote ancestors have been cast as primitive and childlike―either free and equal innocents, or thuggish and warlike. Civilization, we are told, could be achieved only by sacrificing those original freedoms or, alternatively, by taming our baser instincts. David Graeber and David Wengrow show how such theories first emerged in the eighteenth century as a conservative reaction to powerful critiques of European society posed by Indigenous observers and intellectuals. Revisiting this encounter has startling implications for how we make sense of human history today, including the origins of farming, property, cities, democracy, slavery, and civilization itself.

Drawing on pathbreaking research in archaeology and anthropology, the authors show how history becomes a far more interesting place once we learn to throw off our conceptual shackles and perceive what’s really there. If humans did not spend 95 percent of their evolutionary past in tiny bands of hunter-gatherers, what were they doing all that time? If agriculture, and cities, did not mean a plunge into hierarchy and domination, then what kinds of social and economic organization did they lead to? The answers are often unexpected, and suggest that the course of human history may be less set in stone, and more full of playful, hopeful possibilities, than we tend to assume.

The Dawn of Everything fundamentally transforms our understanding of the human past and offers a path toward imagining new forms of freedom, new ways of organizing society. This is a monumental book of formidable intellectual range, animated by curiosity, moral vision, and a faith in the power of direct action.

“We are very, very small, but we are profoundly capable of very, very big things.” 

5. Short Squeez Picks

• Building a Gorilla business Podcast

• Another wall on a southern border

• US wants to cut off Russia from microchips

Medium of the Day: Navigator Newsletter

Take a trip through the news in just 5 minutes.

It is more important than ever to stay up-to-date with the latest travel news. This daily newsletter highlights the news that matters most to help you be more informed on what's happening in the world. 

6. Daily Visual: A Race of Silent Vehicles

Electric vehicle sales by make and location

Source: EV-volumes.com

7. Daily Acumen: Understanding Value

Successful investing requires an estimate of intrinsic value of the business. Without it, any hope for consistent success as an investor is just that: hope.

One of the undisputed rules of investing is that the present value of future free cash flows determines the value of a financial asset. This is true for stocks, bonds, and real estate. Now, despite the fact that valuation is a challenging exercise for investors because each driver of value – cash flows, its timing, and risk – are based on expectations. 

Great fundamental investors focus on understanding the magnitude and sustainability of free cash flows. Factors that an investor must consider include where the industry is in its life cycle, a company’s competitive position within its industry, barriers to entry, the economics of the business, and management’s skill at allocating capital.

8. Crypto Corner

• $321M crypto hack is largest in 2022... so far

• CryptoPunk owners face authenticity drama

• Layaway making a comeback through crypto?

• IRS will not tax unsold tokens

• From NBA player to crypto spokesperson

• Weather affects mining, even digital mining

9. Memes of the Day

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