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THE HEADLINES

 

GHOSN AWRY

We knew things were bad at Nissan, but we didn’t know they were “Nissan is the Deutsche Bank of car companies” bad. How bad is it? Well, operating profit plunged 99% vs. the same quarter a year prior and the company plans to cut 12.5k jobs worldwide.

So what’s the good news?

There is no good news. I’m not sure if you read the first paragraph but we compared the company to DB. So what’s the saving grace? Welp, revenue only fell 13% compared to last year. So they’ve got that going for them.

WTF happened?

The usual suspects are partially to blame for the carnage. A slowing global economy, Brexit fears (and the associated weaker luxury sales in the UK), the US trade war and growing costs linked to changes in emissions standards.

And then there are Nissan’s in-house demons. The Japanese carmaker is losing market share in Europe and the US in droves. It certainly doesn’t help that only 17-year-old drug dealers drive Nissans.

Of course, there is also the 800-pound gorilla in the room. Meet Carlos Ghosn, the former Nissan and Renault chairman who stands accused of financial misconduct (read: funneling company cash to himself).

Ghosn has been detained (for the most part) since late 2018. Still, the frayed joint venture between Renault and Nissan, of which Ghosn was the glue, remains intact … for now. In-fighting has plagued the relationship since Ghosn’s arrest.

 

BUFFETT PARTY OF ONE

“F*cking millennials.” – Warren Buffett to Charlie Munger, in between telling kids to get off their lawn

Justin Sun, the creator of cryptocurrency Tron, released a weird, half-assed apology yesterday following what has been one hell of a week that just screams “eccentric crypto billionaire.”

Where do we start?

Sun won the opportunity to sit down for lunch with Buffett after placing the winning $4.57M bid in the annual charity auction. The crypto overlord with a huge following on social media planned to use the time to convince the Oracle of Omaha, a noted crypto-hater, that the funny money was a net-positive for society. So far, so good.

In typical millennial fashion, Sun had been using the lunch for shameless self-promotion. Again, no harm no foul.

But things got weird over the past few days …

You see, the lunch was planned for yesterday … Warren made OpenTable reservations and everything. And then on Monday Sun bailed, citing kidney stones. Almost simultaneously the Chinese media reported that he was being held at the border suspected of illegal fundraising (China does not like crypto), pornography, and gambling (sorry for partying) among other things.

And before we could figure out what a guy with kidney stones was doing with adult entertainment Sun popped up in SF, posting a video explaining he wasn’t imprisoned in Asia. This was a pretty savvy PR move considering Tron had plummeted on news of his legal troubles.

That leads us to yesterday when Sun apologized for “excessive self-promotion” as well as his “penchant for hyping things up.” No word on if the lunch has been rescheduled … or what kind of smut Sun was looking at.

You can’t make this sh*t up. 

CAN’T MISS A BEAT

A tale of two FAANGS.

Google’s parent was a winner yesterday, reporting quarterly sales results above consensus expectations and rebounding from just an ok number last quarter.

The majority of analyst and investor focus this quarter was on Google’s ad business (so, most of it), which also rebounded from a weak Q1. Sales for the quarter came in at $32.6B, up 16% from last year.

The trend is a welcome sign for the tech giant as its ad sales had decreased every quarter compared to prior year since Q2 2018. The stock jumped almost 9% after hours.

It’s a jungle out there

Amazon reported mixed earnings as revenue beat expectations but profits took a hit.
The biggest reason? One-day delivery.

Bezos announced the initiative during the last earnings call but hasn’t been able to make good on his promise to offer free one-day shipping to all Prime members, though it is available on over 10M items at this time. Maybe if Bezos spent more time making sure I get my packages in one day and less time sending Lauren Sanchez pictures of his, we wouldn’t be having this conversation.

But JB acting like a teenager who just got his first OTPHJ isn’t the only reason AMZN is on the struggle bus. Jeffery Commerce and the gang are also facing a European antitrust investigation which claims that the company was using proprietary data obtained from third-party sellers through its marketplace to compete against them.

What goes down must come up?

The A to Z provider doesn’t seem too concerned with the lower profits, or the investigations having announced its most successful Prime Day ever just last week. Those results will come out as part of the current quarter’s report.

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IN OTHER NEWS

• FarmersOnly.com. The USDA is getting ready to roll out $16B in government funds to help farmers hurt by trade restrictions the Chinese have put in place in response to US tariffs. China’s tax on more than $60B in US imports has hurt farmers who are already dealing with low crop prices, and in some cases, no crop at all due to wet weather. The tariffs have led to a lack of demand from the People’s Republic, and are hurting business for the US’s top exporters like Cargill, Archer Daniels Midland, and Bunge. What’s that they say about not counting chickens before they hatch?

 

• Booooring. Elon Musk’s Boring Co. raised $120M, its first round of fundraising outside of company insiders. The funding values the company at $920M, and investors leading the charge include 8VC, Vy Capital, Craft Ventures, Valor Capital and DFJ. In the past, Boring has turned to the time-tested bootstrap funding method of selling hats and flamethrowers, which raised the company more than $11M dollars. You know, just classic Startup 101 stuff they teach at Y Combinator.

 

• The European Central Bank signaled that it’s preparing to cut rates on short-term interest. The cut will be the first since 2016 and comes at a time when the ECB is looking to prepare for continuing global trade tensions and the potential of Brexit. The move precedes the departure of ECB President Mario Draghi, a man that’s apparently a fan of both aggressive stimulus policies, and making Donald Trump mad as hell.

 

• According to SoftBank, it’s raised $108B for its second Vision Fund. The original $100B Vision Fund disrupted Silicon Valley by investing a f*ck ton of money in companies like Uber, DoorDash, GM Cruise and WeWork. In the process, SoftBank signed memoranda of understanding to invest, that included Apple and Microsoft, along with Standard Chartered, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, MUFG Bank, Dai-ichi Life Insurance Co., SMBC Nikko Securities, Daiwa Securities Group and Kazakhstan’s sovereign wealth fund. No word on if the investment was a direct result of Borat’s “Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan.”

 

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