Hey Snackers,
A list of things that only make sense in 2020: July is the new January, Thursday is the new Friday, and canned corn is the new TP. How many did you get?
Stocks fell yesterday after comments from Treasury Secretary Mnuchin deflated hopes of a stimulus deal coming together before the election.
In the criminal chicken world... everyone has a bone to pick. Pilgrim's Pride, the US' 2nd largest chicken processor, has reached a plea deal with the DoJ on poultry price-fixing charges. It'll have to pay a $110M fine, and is expected to plead guilty. Price fixing: an (illegal) agreement among competitors that raises or lowers prices to their benefit.
That's clucked up... Right. And it's bigger than just Pilgrim's. From 2012 to 2019, multiple US chicken companies (including nugget legend Tyson) allegedly coordinated to suppress competition. The DoJ says that chicken salespeople were calling each other across companies to talk price. Hypothetical eg:Â "Hey Bob, with KFC we're going no less than 5 cents/wing, right?"
Don't ask for the AUX cord in this one... Uber Freight connects drivers (of massive semi-trucks) with high-volume riders (kegs of Heineken or your new furniture). In Silicon Valley speak, it's "the Uber of Logistics" â literally. Last year, Uber said Freight was its fastest-growing business. It looks like that momentum is still rolling...
Not a truckload of options... Trucking is generally inflexible and expensive â companies need contracts and lead-time to make their shipments. With delivery booming during the pandemic, retailers have been struggling to expand their trucking operations quickly enough. Uber Freight makes that easier and faster (#techify): gig drivers can literally book a load and get paid right in the app.
Freight is Uber's dark horse... to offset losses and grow outside the complicated world of ride-hail. Uber's Ride bookings plunged 73% last quarter on germ-avoidance and "everything is closed, anyway" syndrome. Now if Prop 22 doesn't pass in California, rides will suffer even more. Logistics is a pandemic-friendly bet.
Check your 401(k) or brokerage account... Odds are high that you've got some $$$ in a BlackRock fund, since it's the world's largest money manager with $7.8T in assets under management (AUM) â that's worth almost 4 stimulus packages. Much of that is dominated by index-tracking ETFs, aka "baskets" of stocks that can track an index like the S&P 500. But some funds are more startup-y:
Not so green... BlackRock is also reportedly looking to invest in a $10B+ Saudi Aramco oil pipeline deal. On the sustainability spectrum, BlackRock had a quinoa salad for lunch with Arrival and fried dough for dinner with Aramco fossil fuels.
BlackRock wants to diversify (and hedge)... instead of depending only on one food group. Diversification is meant to reduce risk by spreading investments across sectors/companies that aren't correlated. With the oil investment, BlackRock would also be hedging against potential downturns in EVs. If the oil biz loses, the EV biz is probably doing well (and vice versa).
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Disclosure: Authors of this Snacks own shares of Uber, Amazon, and Walmart
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