Berkshire Bets This Snowflake Won't Melt

  • FTC Gears up for Facebook Antitrust Suit
  • Berkshire Bets This Snowflake Won’t Melt
  • 60% of Pandemic Business Closures Are Now Permanent
  • The Market Thinks This Is the Next Major Move

 BUSINESS 

FTC Gears up for Facebook Antitrust Suit

The FTC is building a little antitrust lawsuit to enjoy with its old pal Facebook, according to a report by the Wall Street Journal.

It’s been more than a year since the FTC (Furry Turtle Combers) launched an investigation into reports of Facebook’s bad behavior.

Allegedly, Mark Zuckerberg’s Minions-meme machine used its power and size to crush rivals, stifle competition, and just generally be a big ole bag of jerks.

Officials haven’t pulled the trigger on the giant FTC lawsuit gun yet, according to people familiar with the giant gun, but the safety is off. Reportedly, the commission is preparing to file an antitrust lawsuit before the end of this hellish never-ending year.

Mark Zuckerberg

Yep, that’s me: Beepborp Brimbleblorm, the CEO of one of the biggest hu-man companies on a little planet called earth. You’re probably wondering how I got here…

That said, the FTC has been known to fully prepare a case, only to never actually file suit (government efficiency!). Neither the FTC nor Facebook has commented on the details of the case.

But the very serious journalists™ at the Wall Street Journal reported earlier this year that the probe would focus on the ruthless acquisition and disposal of potential competitors.

The Mark Zuckerberg App for Finding Hot Singles in Your Area has argued that its acquisitions aren’t anti-competitive and are, in actual fact, cool and good and everybody loves them.

Should the FTC go ahead with its suit, and win, it could seek several measures to the social media giants stranglehold on the market.

This could include restrictions on how the company and platform operate, forcing it to break off pieces of its business, and banning Aunts from sending Guardian Angel memes to their nieces and nephews who desperately need them.

 MARKETS 

Berkshire Bets This Snowflake Won’t Melt

Snowflake, a provider of some vaguely defined internet magic, debuts on the public market today as the most valuable software startup ever to go public.

The company priced its IPO above its increased range, selling 28 million shares at $120 apiece, and valuing the company somewhere in the (very nice to be) region of $33.3 billion. (It’s less of a “startup” more of an “already started up. Hop in, homie.”)

Snowflake is one of those companies that calls itself a cloud-storage company but really makes their money doing something adjacent to cloud storage that’s a pain in the ass to explain to investors.

As the wordsmiths of Bloomberg so elegantly put it, Snowflake is “a vacuum sucking up data strewn across in different systems, so that businesses can analyze it all together.”

Henry

Snowflake: “We’re a cloud-based data-warehousing startup that stores, integrates, and analyzes data with near-infinite scalability.” Bloomberg: “Haha. Vacuum go suck.”

In its IPO filing, Snowflake oh-so coyly revealed that Berkshire Hathaway and Salesforce had each agreed to buy $250 million of stock at the IPO price.

In a secondary agreement, Berkshire (notoriously shy about investing in tech startups) double dipped the stock, agreeing to buy an additional 4.04 million shares. At $120 a pop, Warren Buffett’s House of Sensible Investing will pay $484.8 million for those shares.

The company will debut on the New York Stock Exchange under the ticker symbol “SNOW,” and is the first of way-too-many technology companies to go public this week.

Breaking: Berkshire Hathaway made about $1 billion today off, as shares of Snowflake surged 130% to about $277 right out of the gate.

 ECONOMY 

60% of Pandemic Business Closures Are Now Permanent

Welcome to Shane’s Good News, where we only dispense good news, just like John Krasinski (but without all the selling out!).

In today’s good news: all good news is now bad news. Welcome to Shane’s Bad News.

According to Yelp’s latest economic report, 60% of business closures due to the pandemic are now permanently closed.

163,735 businesses were closed in August. That’s down from the absolute nadir of the pandemic when 180,000 businesses were closed but marks a 23% increase since the last report in mid-July.

Additionally, 97,966 businesses have told Yelp that they have permanently shuttered their raw kombucha stands, build-your-own-hotdog stations, and taxidermied frog museums.

“Overall, Yelp’s data shows that business closures have continued to rise with a 34% increase in permanent closures since our last report in mid-July,” Justin Norman, Yelp’s vice president of data science, told CNBC.

As expected, restaurants, bars, nightclubs, and basically anywhere you can get your drink on were hit the hardest, with 61% of all restaurant closures becoming permanent.

Meanwhile, home and professional services, like landscaping, lawyering, and anything that you can do without leaving your house have seen a relatively low closure rate.

“Despite the hard hit small businesses have certainly taken, we’ve seen that home, local, professional and automotive services have been able to withstand the effects of the pandemic better than other industries,” said Norman.

“Consumers still need these services. Through the rise of virtual consultations, and contactless or socially distanced services, these businesses have been particularly resilient during this time.”

Business Types Impacted by Pandemic

Honestly, we could probably afford to lose a couple more lawyers.


In Other News

VIDEO: Maskless man ejected from Disney's hollywood studios today while screaming misquotes from pixar's 'A Bug's Life'

(Source)


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ONE LAST THING

The Market Thinks This Is the Next Major Move
By Money & Crisis Editor Graham Summers

Leadership has changed in the markets.

Since the March lows, tech, specifically cloud-based tech, has led the markets higher. Companies like Square (SQ) have more than tripled in share price while the S&P 500 is up 40%.

Chart: Square (SQ) Has More Than Tripled in Share Price While the S&P 500 Is Up 40%

However, in the last few weeks this has changed. Former market leaders like SQ or Shopify (SHOP) have been trading sideways.

Chart: Square and Shopify Have Recently Been Trading Sideways

Meanwhile, industrial plays like Freeport McMoran (FCX) and John Deere (DE) have barely corrected at all, soaring to new highs.

Chart: Freeport McMoran (FCX) and John Deere (DE) Have Soared to New Highs

Why is this?

The market is sensing that the next major move will be driven by fiscal spending and the Trump administration’s coming infrastructure program.

Put another way, the COVID-19 lockdowns are ending, the rush into cloud/remote working plays is ending, and the next major market move will be driven by government spending.

 

Computer icon

MARKET MOVEMENTS

Closing Data for Today

DJIA28,033.77↑ 0.14%
S&P Index 5003,386.56↓ 0.43%
NASDAQ11,050.47↓ 1.25%
Gold1,962.00↑ 1.58%
Silver27.23↓ 0.78%
Bitcoin10,999.00↑ 1.92%

  • President Trump signaled support for more coronavirus stimulus spending as a stalemate between Republicans and Democrats over the contents of a fifth stimulus package drags on.
  • Shares of Snowflake (SNOW) soar to $245 on their first day of trading, more than doubling its IPO price.
  • U.S. government plans to ship first Covid-19 vaccines within 24 hours of authorization.

Cheers,

Shane Ormond
Editor, One Last Thing

Shane Ormond

Written By Shane Ormond

Shane Ormond is the managing editor for One Last Thing. In a previous life, he wrote and edited copy for International Living in Waterford, Ireland.