Month: May 2017

Bullish, or just bull?

Yesterday, the SEC filed charges against a slew of business news publications for “fraudulent promotion of stocks.” And we’re not talking some rinky dink LiveJournal blogs — these were big, respected sites like Seeking Alpha, Forbes, TheStreet, Yahoo Finance, and The Motley Fool.

The organization found 250 articles with bullish predictions about biotech stock falsely claiming that the authors were unpaid by the industry when, in fact, the companies had paid contributors for their favorable analyses.

Thus far, the SEC’s settled with 17 out of 27 entities, slapping them with fines as much as $3m for a total of $4.8m in penalties.

So, how much did these publications know?

Apparently, not much. But that doesn’t mean they’re not responsible for spreading propaganda.

As many writers can attest, contributor posts are a bit of a wild west with regards to editorial oversight.

Despite the disclaimer that they were unsponsored, many of the articles in question were published without any editorial review, from authors like “Equity Options Guru,” “Trading Maven,” and “Wonderful Wizard.”

Moral of the story: Don’t invest money based on one blog article

The SEC is warning investors not to make financial decisions based solely on articles they find on investment research websites. Especially those written by someone who refers to themselves as a wizard.

Can’t ghost The Ghost

Ever see one of those tacky corporate-sponsored Snapchat filters with snowflakes falling over red Starbucks cups and wonder, “Does this really work on anyone?

Well, if you’re an advertiser, now you’ll know.

The Ghost unveiled a feature (creatively named “Snap to Store”), that uses Foursquare location data to tie filter users to their in-store visits.

And results seem… profitable

In the beta test, Snapchat reported 42k people visiting Wendy’s the same week they sponsored a spicy fresco chicken sandwich filter. Muy picante.

And it kind of makes sense. Over 66% of Snapchat’s 158m users open the app while at the mall, and 80% while at a restaurant — both prime inception times for advertisers.

But because Snapchat doesn’t collect background data, it can only track users who opened the app while at, say, Wendy’s.

This is them playing ketchup

Snapchat has resisted hyper-targeting users but, with a struggling stock price, the move is an attempt to keep up with Facebook and Groupon, which have been doing this for years.

Moral of the story? When your competition is stealing users by blatantly copying your product, sometimes it’s ok to copy back.

Come for the cabinets, stay for the meatballs

Or just come for the meatballs like the 30% of Ikea Food customers who now visit the store just to eat.

A year after opening the first Ikea in 1958, founder Ingvar Kamprad built the first sit-down restaurant inside the furniture store, featuring fan favorites like their signature Swedish meatballs, mashed potatoes, and lingonberry jam.

See, Kamprad knew that when you feed people they stay longer and are more likely to make a decision before leaving the store. Because Kamprad is smarter than us.

But, while the food was always intended to be a sofa seller

It’s expanded into much more than just a side gig — generating $1.8B in 2016.

A pittance next to their total $36.5B revenue last year but, compared with other fast-casual chains, it’s pretty impressive. For example, Jimmy John’s did about $2B in sales last year while 5 Guys clocked in at $1.3B.

And, by latching onto trends of ethically-sourced ingredients and healthier options, it’s become one of their fastest-growing segments (up 20% from 2013). Heck, the introduction of chicken and vegan meatballs alone boosted sales 30% in “the meatball family.”

Get ready for standalone restaurants and cafés

They’re envisioning them like their in-store eateries, divided into different areas to naturally attract different kinds of shoppers from a play area with adjoining dining section for parents, to private zones for a more “refined” experience.

Makeup is one of retail’s lone survivors

 

*Cue movie trailer voice* In a world where big box department stores must fight to survive, and brick-and-mortar retailers continue to cannibalize themselves… One industry is sittin’ pretty…

The $57B global cosmetics market is one of the few retail verticals experiencing healthy growth, and, as department stores close up shop left and right, brands like Sephora and Ulta are actually expanding their footprint.

More specifically, Sephora already has nearly 1.8k stores worldwide, Ulta’s adding 100 to their 1k locations this year.

Because, for every dollar consumers spent at department stores…

They spent $2.3 at health and beauty retailers. Ulta’s Q4 same-store sales grew 16.6% from last year’s numbers, making it their 8th straight quarter of double-digit brick-and-mortar sales growth.

To put that in context, the other 100 retailers in the S&P Retail Select Industry Index fell 1% in Q4 on average.

Which makes sense — makeup is just more conducive to in-person purchases than, say, appliances or electronics (gotta see if you can pull off that matte coral lip stain IRL, amirite?).

As a result, Ulta’s shares are up 70% over the past year, outpacing even Amazon. Fun fact: Amazon also owns makeup brands like Maybelline, L’Oréal, Revlon, and Covergirl.

But Bezos isn’t batting an eyelash

Although Sephora & Ulta are hanging on to their foothold with celebrity partnerships and brand exclusivity, Amazon still brought in $2.5B in beauty sales last year, up 47% from 2015 — that’s about half of Ulta’s entire annual revenue.

We’re betting they won’t be sharing their beauty secrets any time soon.

Spotify goes back on their word

 

After months of whining that exclusive music deals hurt fans, Spotify is partnering with the Universal Music Group to do, well, exactly that.

The new deal between the music giants allows some UMG artists to place their albums exclusively on Spotify’s premium tier for 2 weeks before everyone else hears it.

And if you’re one of Spotify’s 50m freeloaders who thinks “it’s just 2 weeks, big whoop”, then consider this: today would be the first time you’d be hearing Drake’s More Life.

(Plus you’d have gone 14 painful days of not knowing what “blem” meant.)

With big expectations come big responsibilities

Spotify’s been looking to IPO for some time but, despite doing $2.2B in revenue last year, the company still isn’t profitable. Not the most attractive investment…

The big driver of this by far is royalties (which artists like T-Swift say still aren’t enough). By granting exclusive access for their premium users, Spotify hopes to negotiate better licensing rates with record companies.

Valued, loyal customer better have my money

Spotify was already the last defender of freemium streaming – compared with subscription only rivals like Apple Music and Tidal.

The exclusivity model is the first major move towards converting users to paid, which, to no one’s surprise, drives the vast majority of their revenue $10/month at a time.

And if you’re altogether tired of tracking who you can stream where, there’s always vinyl. Apparently gramophone records are having their best year since 1985.

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