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E-commerce bites the dust...
May 06, 2022 View Online | Sign Up | Shop

Morning Brew

Goodlife Clothing

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Max Knoblauch, Matty Merritt, Neal Freyman

MARKETS

Nasdaq

12,317.69

S&P

4,146.87

Dow

32,997.97

10-Year

2.916%

Bitcoin

$36,375.98

Tesla

$873.28

*Stock data as of market close, cryptocurrency data as of 12:00am ET. Here's what these numbers mean.

  • Markets: After booming on Wednesday following the Fed's interest rate hike announcement, stocks all over the place for their worst day of the year. Apparently it only took a few hours for investors to remember, "Oh yeah…there's still raging inflation, slowing economic growth, and a potential recession barreling toward us."
  • Crypto: Bitcoin and other major cryptos like ethereum also tumbled in the aftermath of the Fed announcement. They've typically tracked the performance of growth stocks, which have gotten hammered on the prospect of higher interest rates.

E-COMMERCE

E-commerce flatlines as consumers remember about stores

An illustration of a laptop storefront with a weak heartbeat monitor Francis Scialabba

The online shopping industry is experiencing more 52-week lows than the groupchat when the final Airbnb price gets calculated. As the pandemic-fueled boom fades and customers return to physical stores, many large e-commerce retailers are reporting lower sales—and signaling that the industry is hitting a brick-and-mortar wall.

Add recession to cart?

Amazon set the stage last week, reporting a 3% drop in online sales in the first three months of the year, and forecasting a meager 3% sales growth for the current quarter. Its shares plunged for their biggest one-day drop since 2006.

Amazon was the canary in the coal mine of the industry, sending out a warning sign that shoppers are logging off. Basically every major online retailer reporting earnings since then has shown signs of a clicking cooldown.

  • Wayfair shares cratered nearly 26% yesterday after announcing that its active customer count dropped 23.4% from a year ago.
  • Bed Bath & Beyond reported an 18% nosedive in online sales.
  • Etsy and eBay shares both dropped by double digits yesterday after giving weak guidance for the current quarter.
  • At least five senior executives from Meta's fledgling e-commerce division have fled in the last six months.
  • Shopify shares plummeted about 15% on Thursday after posting much lower-than-expected earnings.

Zoom out: Higher prices, longer delivery times, and the fact that in-person stores often smell better than the living room are all playing a part in the Q1 e-commerce bust. If it's any comfort for online shopping companies, all stocks everywhere are getting clobbered, too.—MK

        

TOGETHER WITH GOODLIFE CLOTHING

Good clothes, good style, good life

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Take 25% off with code BREW25—and for a limited time, receive a complimentary Double Layer Hoody with any purchase.

WORLD

Tour de headlines

Karine Jean-Pierre Alex Wong/Getty Images

The White House is getting a new press secretary. And she'll make history. Karine Jean-Pierre, the existing principal deputy press secretary, will become the first openly LGBTQ woman and Black woman to be tapped for the position. Jen Psaki, who will be in the role until May 13, is reportedly going to MSNBC, where she'll host a show for the Peacock streaming service.

The FDA slows J&J's roll. The agency said that Johnson & Johnson's Covid-19 vaccine should only be used by adults for whom it's a last resort, citing the risk of rare but life-threatening blood clots. J&J's one-shot vaccine is already a much less-popular option—about 17 million people have received that shot, compared to over 202 million who've received two doses of Moderna's and Pfizer's vaccines.

Boeing got tired of Wilco. After 21 years in Chicago, the plane manufacturer is moving its headquarters to Arlington, Virginia. Company execs hope that establishing a base close to DC will help them snag lucrative, but hot dog-less, lunches with Washington bigwigs and Pentagon decision-makers. Illinois Senator Dick Durbin said Boeing's decision to leave is "incredibly disappointing."

TECH

Elon and the boys going to buy Twitter

Hey Arnold! kids walking Nickelodeon via Giphy

Elon Musk secured $7.1 billion in additional funding for his $44 billion acquisition of Twitter, decreasing the amount he'll have to borrow against Tesla shares and giving him a little financial relief.

As you might imagine, the investors working with Elon are the charcuterie board of global finance. They include…

  • Prince Alwaleed bin Talal: $1.9 billion. The Saudi royal, who is one of Twitter's largest backers already, said he'd roll over his current investment into the "new" Twitter. Alwaleed had previously scoffed at Musks's bid.
  • Larry Ellison: $1 billion. He's the megarich founder of Oracle who knows Elon well; Ellison has a stake in Tesla worth more than $14 billion.
  • Sequoia Capital: $800 million. The venture capital giant is a major investor in Musk's SpaceX.
  • Binance: $500 million. The crypto exchange's half-a-bil is basically just a blank check for Elon. As CEO Changpeng Zhao told the FT, Elon "didn't have a plan for Twitter. There isn't, like, a business plan. So it wasn't that type of discussion."
  • Andreessen Horowitz: $400 million. Ben Horowitz, a general partner at the buzzy VC firm, said "we believe in Elon's brilliance to finally make [Twitter] what it was meant to be."

Seems like Elon will be pretty hands-on. Already the chief executive of SpaceX and Tesla, Musk is expected to become the CEO of Twitter for a few months when the deal closes this fall, per CNBC.—NF

        

HEALTH CARE

You're going to be hearing a lot more about abortion pills

A combination pack of mifepristone (L) and misoprostol tablets, two medicines used together, also called the abortion pill. Combination pack of mifepristone and misoprostol tablets. Wells/Getty Images

If Roe v. Wade is overturned, as a Supreme Court opinion leaked this week suggested, abortion pills would likely become the next target of conservative legislators and the anti-abortion movement.

Abortion pills (aka medication abortions) already account for over half of all abortions in the US, according to the Guttmacher Institute.

How medication abortions work: Two drugs, when taken within the first 10 weeks of pregnancy, are 95% effective. The FDA has said the pills are safe, can be prescribed virtually, and can be delivered through the mail.

Big picture: Most of the states waiting to pass restrictions on abortion have already attempted to make it harder to access abortion pills. Texas passed a bill in December that would slap health care workers with jail time and a $10,000 fine if they prescribed abortion pills through telehealth services.—MM

        

GRAB BAG

Key performance indicators

listings for movies at AMC AMC

Stat: The AMC location in Times Square held 70 showings of Marvel's Doctor Strange in the Multiverse of Madness yesterday (what you're seeing isn't even all of them). The sequel to 2016's Doctor Strange was supposed to be released about a year ago, but it premiered Thursday after being delayed a year due to the pandemic.

Quote: "I think it's in your best interest to realize that it's not a left or right thing. It's not a Democrat or Republican thing. It's a workers issue, and we're the ones that are suffering."

Amazon union leader Chris Smalls pushed back against a skeptical GOP Senator Lindsey Graham at a hearing on Amazon's labor practices yesterday. Smalls said that corporations were not being held accountable for their mistreatment of workers, while Graham lashed out at Bernie Sanders, who had convened the hearing: "Every time I turn around, you're having a hearing about 'anybody who makes money is bad.'"

Read: "Buy now, pay later" sends the TikTok generation spiraling into debt. (SFGATE)

QUIZ

Quizzzzzzzzzz

Weekly news quiz

The feeling of getting a 5/5 of the Brew's Weekly News Quiz has been compared to an email that could have been a meeting.

It's that satisfying. Ace the quiz.

BREW'S BETS

Events to put on your calendar:

  • Join HR Brew and Shake Shack on 5/17 at 12pm ET as they talk secrets to employee success. Register here.
  • IT Brew's virtual launch event is taking place on 5/19 at 12pm ET! Register here to learn what keeps IT up at night.

For a weird, unsettling feeling, scroll through Looney Tunes landscapes without Looney Tunes.

Friday recs: A list of documentaries to watch and the best fantasy books you've never heard of.

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WHAT ELSE IS BREWING

  • Peloton is reportedly looking to sell a ~20% stake in the company as part of its turnaround efforts.
  • Facebook is shutting down its podcast service in early June, just over a year after it launched.
  • US mortgage rates climbed to 5.27% last week—their highest level since 2009.
  • Luxurious Dubai is becoming a safe haven for wealthy Russians leaving their country.

GAMES

The puzzle section

Jeopardy! x Morning Brew: As if you needed another reason to be excited for Friday, we're back with The Training Arcade to bring you Jeopardy! every first and third Friday of the month. Play the game here.

Friday puzzle

Below are incomplete words. Place three letters in each bracket so that you can complete the word on the left and begin the word on the right.

i (_ _ _) lar

lat (_ _ _) ror

phan (_ _ _) ato

indica (_ _ _) toise

sc (_ _ _) na

thr (_ _ _) egal

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ANSWER

i(dol)lar

lat(ter)ror

phan(tom)ato

indica(tor)toise

sc(are)na

the(ill)egal

Source.

         

Written by Neal Freyman, Matty Merritt, and Max Knoblauch

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