Hope you enjoyed the return to football yesterday…One thing that caught my eye from the game was Postmates becoming the official delivery partner of the NFL—well, who knew?
Postmates was acquired by Uber for $2.65 billion a few months ago, and this deal is an interesting one for Uber as there has never been a better time to be named the…official on-demand delivery partner of the NFL. The NFL is really going to be a couch experience this year (maybe a red Solo cup party or two), and this deal gives Uber/Postmates an interesting foot-in-the-door with NFL fans and a larger slice of the pie in the home delivery sector. Doordash is still the king of restaurant delivery, owning 40% of the market…But, this whole segment is one with razor-thin margins and Uber’s ability to combine restaurant/essentials/grocery delivery into one category is intriguing (both companies are operating separately with Uber running a combined merchant platform behind the scenes). Now, before you go and start thinking that I am recommending Uber, let’s look at all the red tape around delivery companies. For example, Seattle has capped fees delivery companies can charge restaurants and California and Uber are still tussling over reclassifying its drivers as employees compared to independent contractors. Let’s see how all that drama shakes out first…
Speaking of California, the August Complex, a group of 30 fires north of Sacramento, is now the biggest wildfire event in California’s history by acres burned. The fires have created an eerie and apocalyptic sky over San Francisco and other cities, and the Commodities Futures Trading Commission seemed to add insult to injury by conducting a report stating that intensifying wildfires and natural disasters could trigger a financial crisis. Here is how that could happen:
- Fires rage
- Fires destroy homes and businesses
- Home values plummet + City real estate tax revenue contracts significantly
- Homeowners default on their mortgages + City governments can’t pay their debts
- Banks start to default + city governments default on bonds
- Portfolios and balance sheets go haywire
- *Cue the Joker driving/ hanging out of a cop car
It’s a rather terrifying read at 5am, so I will spare you all the details and my TNT movie imaginations…But the bottom line is this, climate change and wildfires could quickly transform from a humanitarian crisis into a financial crisis.
Moving onto to other news: good ‘ole Hindenburg Research struck yesterday. The short-seller called Nikola, the EV truck maker, an “intricate fraud” (ain’t it amazing what an adjective can do). It was the typical scathing report from Hindenburg, with allegations that include:
- Nikola staged a 2018 video of its Nikola One hydrogen semi-truck moving on its own. Instead, Hindenburg said the truck was rolling downhill. Hindenburg tested the road in the video and also has receipts! A text message from a Nikola employee confirming the downhill deception…Yikes.
- The other part of the report alleges that the founder, Trevor Milton, and Nikola have exaggerated their efforts to develop a new battery. Personally, I think these misrepresentations are probably the most damning, and the biggest takeaway from the report. Nikola has been claiming it will revolutionize batteries, but there is no IP evidence that they have anything substantial and they are going to use GM’s battery in the Nikola Badger truck. So, where does the technology exist for this battery revolution?
Whatever your thoughts are on stagey short-sellers, Hindenburg Research has put out some well-done reports over the years including one on Smile Direct Club that was for the ages. As you might have guessed, NKLA’s stock was down 11% yesterday and in premarket trading it is down 2.45% at the time of post.
You might find this a rather vanilla pick, but that is exactly what I am looking for when the market is doing switchbacks. INFY took a tumble in March (like most companies), but even still the company saw revenues increase by 9.8% and over the last five fiscal years Infosys can be counted on to give you an 8% increase YoY in revenue. Say no more.