🍋 TikTok Goes After Amazon

Together With

Good Morning! Looks like leveraging up sometimes gets even the best of us - Peloton’s co-founder reportedly faced repeated margin calls as his stock slumped. Dave Portnoy galvanized young investors two years ago with his ‘stocks only go up’ mantra - but now rich millennials have already lost confidence in the stock market. New study found that the young and wealthy prefer crypto, real estate, and private equity instead of stocks.

Shares of Uber and Doordash plunged yesterday after a new law would classify gig workers as employees, which would drastically increase operating costs. If Uber gets too expensive you might be able to take an electric aircraft the next time you go to the airport; Delta is investing $200 million in air-taxi startup Joby.

It never hurts to get a second opinion, that’s why Personal Capital is offering a free, personalized, portfolio recommendation for qualified members.

1. Story of the Day: TikTok Goes After Amazon

Scrolling through TikTok may have taken over your free time and attention span, but now the company wants to take over the e-commerce industry too. TikTok is building e-commerce fulfillment centers across the United States as it charts its next phase of growth.

TikTok exploded in popularity during the Covid pandemic. The company continues to rake in massive ad revenue as it proves it’s not a fad but rather here to stay. (pour one out for Vine tho) 

With its newfound pile of cash and strong momentum, the company is betting that the e-commerce sphere will provide continued growth. The industry approaches $1 trillion in annual sales and continues to scale rapidly. Amazon is the dominant player with nearly 40% of last year’s sales, but TikTok thinks it can challenge Bezos by building its own distribution centers and supply chain.

TikTok’s pivot into e-commerce won’t be a walk in the park. Its parent company ByteDance topped over $7 billion in losses in 2021, and lawmakers have considered banning the app over privacy concerns. 

Takeaway: TikTok doesn’t want you to just see them as a video-sharing platform - the company wants a seat at the big-boy table with tech conglomerates like Google, Amazon, and Facebook. TikTok is embracing the concept of moving fast and breaking things in ways Vine did not, even if selling user data rubs some the wrong way. If TikTok does successfully break into e-commerce, let’s hope its mind-reading algorithm doesn’t burn a hole in our wallets - 2022 has been rough enough as is.

2. Markets Rundown

Stocks fell for the fifth day in a row as investors brace for inflation and earnings data.

Movers & Shakers

• (-) Meta ($META) -4% the company’s stock nears a four-year low after revenue concerns.

• (-) Netflix ($NFLX) -7% after a poor ad tier outlook ahead of its earnings report.

• (+) Walgreens Boots Alliance ($WBA) +2% after the drugstore chain acquired the healthcare firm CareCentrix.

Private Dealmaking

• Thoma Bravo bought ForgeRock, a software firm, for $2.3 billion

• Step, the Charli D’Amelio-endorsed fintech company, raised $300 million

• Factorial, an HR platform for small businesses, raised $120 million

• Electra, a Bill Gates-backed ‘green iron company’, raised $85 million

• Endor Labs, a software management platform, raised $25 million

• Exxon Mobil in talks to buy Denbury, an oil and gas company, at a $5 billion valuation 

Top Reads

• IMF says the worst is yet to come for global economy (Fox)

• Jamie Dimon calls on Musk to ‘clean up’ Twitter amidst bot concerns (CNBC)

• Chip stocks squeezed on multiple fronts (Axios)

• Recently retired investor Ray Dalio warns of ‘perfect storm’ for the economy (Reuters)

• Teens flock to Netflix and YouTube as cord-cutting accelerates (YF)

• Lyft exec was wrong about driverless vehicles, but still believes in their potential (CNBC)

• Brookdale could be private equity’s next nursing home test (Axios)

• Is the cure for inflation on the way? (YF)

• Honda’s new $4.4 billion EV battery plant to be built in Ohio (CNBC)

• Elon Musk has the world’s strangest social calendar (NYTimes)

A Message from Personal Capital: Get A Free Personalized Portfolio Recommendation

It never hurts to get a second opinion, that’s why Personal Capital is offering a free, personalized, portfolio recommendation for qualified members.

Personal Capital is the smart way to manage your finances. Whether you want to buy a home, plan for education, or make sure you're on track for retirement, Personal Capital's Dashboard can give you the best recommendation on how to proceed. 

There’s no cost or obligation, and the Dashboard is yours to keep even if you don't choose to work with Personal Capital advisors. 

See why more than 29,000* people choose Personal Capital to manage their wealth today.

4. Book of the Day: The Predictioneer's Game

Bruce Bueno de Mesquita is a master of game theory, which is a fancy label for a simple idea: People compete, and they always do what they think is in their own best interest. Bueno de Mesquita uses game theory and its insights into human behavior to predict and even engineer political, financial, and personal events. 

His forecasts, which have been employed by everyone from the CIA to major business firms, have an amazing 90 percent accuracy rate, and in this dazzling and revelatory book he shares his startling methods and lets you play along in a range of high-stakes negotiations and conflicts.

Bueno de Mesquita also demonstrates how game theory can provide successful strategies to combat both global warming (instead of relying on empty regulations, make nations compete in technology) and terror (figure out exactly how much U.S. aid will make Pakistan fight the Taliban).

But as Bueno de Mesquita shows, game theory isn’t just for saving the world. It can help you in your own life, whether you want to succeed in a lawsuit (lawyers argue too much the merits of the case and question too little the motives of their opponents), elect the CEO of your company (change the system of voting on your board to be more advantageous to your candidate), or even buy a car (start by knowing exactly what you want, call every dealer in a fifty-mile radius, and negotiate only over the phone).

Savvy, provocative, and shockingly effective, The Predictioneer’s Game will change how you understand the world and manage your future. Life’s a game, and how you play is whether you win or lose.

“The difference between doing a good job and doing a lousy job is driven by how many people a leader has to keep happy.”

5. Short Squeez Picks

• Why small steps in life lead to big gains

• Ten things I learned in my 20s

• 37 tips to winter-proof your life

• 5 PowerPoint frameworks to captivate your audience 

• Why incentives are the most powerful forces in the world

• How to remember everything you learn in under two minutes

A Message from AlphaInsider: Instead of Learning How To Trade, Use This

Want access to the proven best-performing trading strategies? Look no further.

AlphaInsider has an open marketplace, where best-performing strategies rise to the top.

This means you can quickly see who has the best approach to the markets, subscribe to their strategy, and copy each trade they place in real-time.

Many top-performing trading strategies are free to follow - go to AlphaInsider to choose your new winning strategy today.

6. Daily Visual: Profit Margins at US Public Railroads

Source: Axios

7. Daily Acumen

“A large group of people can become better informed over time. But they can’t, on average, become more patient, less greedy, or more level-headed during periods of upheaval. That will never change.

Good ideas are easy to write, bad ideas are hard. Difficulty is a quality signal, and writer’s block usually indicates more about your ideas than your writing.

It’s easy to underestimate the odds of change because an honest assessment of how unknown the future is would make most people refuse to get out of bed every morning.

More people wake up every morning wanting to solve problems than wake up looking to cause harm. But people who cause harm get the most attention. So slow progress amid a drumbeat of bad news is the normal state of affairs.”

Source: Collaborative Fund

8. Crypto Corner

• BNY Mellon, America’s oldest bank, will now hold crypto

• Crypto regulations are on the front burner this week

• Google partnering with Coinbase to accept crypto cloud payments 

• Dogecoin soars 32% in 24 hours as Coinbase hops on crypto meme train 

• China’s crypto founders test government limits with Xi’s industry restrictions

• Crypto exchange Bittrex fined record $24 million for breaking U.S. sanctions 

9. Memes of the Day

 Advertise With Us / Wall Street Shop / Private Equity Course

*****

*As of  9/30/21. Personal Capital Advisors Corporation (“PCAC”) compensates YouExec (“Company”) for new leads. (“Company”) is not an investment client of PCAC.