theStreetFika: Scones, Sips, Strategy & Stocks

After years of being the victim of "borrowed features" now it's Snapchat that's doing the borrowing. Snapchat's new product Spotlight is aimed squarely at competing in the short-form video space where TikTok is having so much success.To encourage creators to join Spotlight, Snapchat is using a not-so-subtle carrot. For the rest of the year they will share out $1m every day to creators who make the most viral videos. That sounds like an enormous amount to give away — but because Snapchat has become increasingly efficient at monetizing its user base, it's actually a reasonable bet. Assuming they run the campaign until the end of 2020 (roughly 35 days worth), that's only $35m on revenue that will very likely exceed $2bn this year. If Snapchat is able to draw some top creators to Spotlight it may be able to launch the most credible competitor to TikTok so far. Facebook's attempt, Reels, reportedly isn't doing well . Maybe Snapchat can succeed where Fa...

Airbnb, the house-sharing tech company, wants to go public in December under the ticker symbol ABNB. In this article, I look into the company's business model and why I'm psyched that it's finally coming to Robinhood. Airbnb can be compared to Uber. Both make more efficient use of assets that otherwise might sit idle (spare rooms, cars on driveways) but their financial performance is staggeringly different. In its most recent financial year Airbnb had an operating loss of $500M on revenues of $4.8B, roughly a -10% margin. Uber's most recent annual results? A -60% operating margin. Both Uber and Airbnb have built something that's truly unique in logistics and lodging respectively. Both created an entirely new sort of supply that didn't exist before. Both took trust - a core differentiator of the incumbents (hotels and taxis) in their verticals and digitized it. And, most importantly, the resulting commoditization happened only on their platforms and were captured...

Last week, Sony launched PlayStation 5 (PS5) on the same day that Microsoft dropped its Xbox Series X and S. So much for not stealing each others' thunder ;) As far as the actual hardware specs go, they are pretty on-par with each other. However, the two warring companies are approaching the growing gaming industry very differently, and competition between them will be one of the most interesting stories to watch over the coming few years. Here's a run down of where the two companies are and the very different directions that they are taking: Sony Sony is following the traditional razor and blades model that has long characterized consoles: try and not lose too much money on the consoles, and make up the difference in game licenses, its online service, and in-game purchases. It’s a model that gamers are familiar with, even if it ends up being a pricey one. In short, Sony is treating the PS5 like a console, and gamers like gamers, just as they did last generation. So, when it la...

It's the most wonderful (?) time of the year It's that time of the year. Change is in the air. There is that flurry of excitement that comes from new beginnings. You guessed it - open enrollment is here. People are shopping for insurance plans,  which these days can mean looking at the health care marketplaces, assessing medicare plans, or looking at the options an employer provides during this open enrollment season. About half of us get our health insurance through an employer - but why? The story that you most often hear is that it all started during World War II. Amidst stiff competition for employees, benefits were even more important due to the federally-imposed wage cap. That story is almost right, but not quite. Really, the most important factor of why we receive our health insurance through our employers is the tax write off. Also, offering health insurance has been a strategy to hopefully keep employees - a way for employers to garner loyalty, especially in union-heav...

Last week was a long one. The stress of the election coupled with the pandemic has a lot of us looking for ways to relieve anxiety and invest in wellness from the comfort of home. Increasingly, many are resorting to mental health and meditation apps. Calm, a meditation app, topped Apple's health and fitness category on Election Day — and other mindfulness apps like Headspace weren't far behind.  Why are these apps popular? The anxiety-inducing times, along with poor access to mental healthcare and high smart phone penetration are big contributing factors. However, these are not the only ones. For me, the biggest factor is that the companies making these apps have finally figured out that they are content creators and not just app makers. The features that were available through these apps 5 years ago were a lot more rudimentary compared to what we have today, and so was the content. These apps have heavily invested in improving their content. It's telling that the biggest a...

Dunkin' is officially going private. Arby's owner, Inspire Brands, is snatching up Dunkin' for $11.3B (including debt). This is the opposite of a regular private equity (PE) deal which typically involves finding a struggling company, revamping it, and flipping it for more. Dunkin' has not been struggling. It managed the pandemic well & its stock is at an all-time high. So why is Dunkin' going private, and are there synergies with Inspire Brands? Dunkin' has been freshening up its image and brand for years. It wants to be in the same league as Starbucks. It dropped "Donuts" from its name - not surprising considering drinks make up more than half of Dunkin's revenue- invested in new brewing systems, and got its employees "espresso certified". It also added drive-thrus and flashy items to its menu - green tea refreshers, non dairy milks, and vegan options (Beyond Meat sandwiches). It also put in a lot of money into its digital business (...