Robinhood Snacks - 🍰 Uber's pandemic-weathering recipe

Uber flexing its flexible cost structure

 

 

Dow Jones

20,087 (+0.95%)

S&P 500

2,409 (+0.47%)

Nasdaq

7,151 (+2.30%)

Bitcoin

$6,200 (+15.33%)

10-Yr US Treasury

1.168%

Hey Snackers,

Birthday coming up? Your best bet might be Quarantine Cakes: frosted layers of deliciousness with a healthy dollop of CDC messaging — eating an entire cake alone never felt so right.

The Dow inched up 190 points, rebounding from its 3-year low the day before. Meanwhile, oil surged 23% for its best day ever.

Ride

Uber's CEO just basically updated the company's Tinder profile

THE TAKEAWAY

Flexible costs could be Uber's lifeline... Another fancy term Uber dropped: "highly variable cost structure." Uber's expenses are flexible — costs can scale when business winds down/up. Uber doesn't have many fixed costs (think: rent). That's an advantage over business like airlines and car-makers, which have massive factories and expensive machinery. Uber's "storefront" is an app — not a rent-heavy retail spot.

Stream

Netflix gets asked to chill, but investors are just glad it doesn't have ads

THE TAKEAWAY

While media usage is surging, media is not equal... The key difference is in the business model: Google/Facebook/Snapchat rely on ad sales, while Netflix has a subscription-based model (starting at $8.99/month). If the economy hits recession, advertisers are expected to cut back on their ad budgets. That's a threat to ad-based biz models — Netflix's subscription-focus might be more reliable in the long-term.

What else we're Snackin'

• Hired: Domino's expects to hire 10K workers to fuel its uniquely big (and self-operated) delivery operation while the rest of the industry (sadly) lays off
• Dedicate: Retailers including Walmart and Target dedicate store shopping hours to seniors more vulnerable to COVID-19
• 24/7: GE's healthcare unit will produce ventilators around-the-clock to meet the shortage
• Hosted: Airbnb is taking on "significant" investment pitches for funding during a down market (despite having $3B in cash)
• Vaxx: Clinical research group hVIVO attracts over 20K people willing to be infected with a tamer version of COVID-19 — the goal is to find a vaccine
• OK: President Trump says he's 'OK' banning stock buybacks as a corporate bailout condition — FYI, US airlines spent 96% of free cash flow on buybacks in the last decade

The Snacks Daily Podcast

With nobody thinking about splurging $50K on an F-150 right now, Ford’s sweating over what it can't a-Ford.

So it's suspending the dividend payments it normally doles out to investors and is temporarily shutting down plants. It’s also tapping into its $13B emergency loan... that’s a problem for its banks.

Learn why on our 15-minute pod.

Snack Fact Of the Day

When the University of Cambridge temporarily closed in 1665 because of the bubonic plague, Isaac Newton was forced to work from home — during that "quarantine," he came up with the theory of gravity

Friday

• Existing Home Sales Report
• Earnings expected from Tiffany & Co

Disclosure: Authors of this Snacks own shares of Uber and Alphabet

ID: 1125380

Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC. Testimonials may not be representative of the experience of other customers and are not guarantees of future performance or success. Robinhood Financial LLC, member FINRA/SIPC.