Equities Rebound with Tech ~Flat

Catch Up Quick

• Layoffs increased during the end of October, with ExxonMobil, Chevron, Wells Fargo, Charles Schwab and Raytheon, among others, announced thousands of white-collar job cuts

• Stonepeak Infrastructure Partners agreed to buy Astound Broadband (the 6th largest cable operator in the United States) from TPG Capital & Patriot Media Management for $8.1B

• 82% of U.S. workers approve of their company’s pandemic leadership response (SurveyMonkey)

• AMC outlined plans for a $50M follow-on equity offering in order to stave off bankruptcy

• As of late Friday afternoon, early voting hit 61.7% of 2016's total turnout

• China’s economy grew by a remarkable 4.9% in the third quarter year over year

Monday Insight

• As the DoJ recently launched its first official legal action against big tech (Google), Amazon could be next, as it identifies competitors to its own products (kindle, home devices, etc) and intentionally hinders their advertising exposure on its broader platform— the problem is that for these practices to be deemed illegal, which could warrant forced business separation, these actions must originate from a monopolistic market position, which has to be proven first and foremost

Thought of the Day

• Shares of internet giant Twitter have fallen over 25% since Friday morning open, driven by slightly decreasing user growth in its Q3 2020 earnings release

• Taking a step back, there are many general facets of Twitter that are highly interesting to note:

• 1) Despite being a revolutionary social media platform for over a decade with ~330M current users (~population of the United States), it only achieved positive earnings 18 months ago

• 2) According to AdWeek, engagement rates on Twitter are 1 - 3% compared to Facebook’s of around 0.2% (likely due to the fact that ads are within the actual user feed on Twitter, while pushed off to the side on Facebook)

• 3) It’s “retweet” feature, differentiating it from other popular social media platforms, not only allows users to easily re-share content but also allows content to reach the sum of its retweeters' audiences, which is an exponential figure by nature

• 4) It’s CEO, Jack Dorsey, is somehow concurrently CEO of payment conglomerate Square

• 5) Over the past 7 years to date, Twitter shares have returned ~0%
  

The Bottom Lines

• While some of these are simply interesting bits with little extrapolated meaning, between it’s huge audience, wide breadth of content, societal influence, impressive ad engagement rates, high product differentiation, and unrivaled potential user outreach, one may expect a different story from a financial perspective

• The main takeaway: there is a big difference between a great product / service and a great business: a thoughtful, scalable revenue model that works in conjunction with market position!

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Have a Nice Monday