Musk free speech strikes Twitter
Also in today’s edition: Heat stroke hits exports; Netflix is becoming TV; Roaring VCs go soft; Vedanta bets on chips
Good morning! Matt Damon has gone from Good Will Hunting to entering the Dogehouse. The actor was trolled on social media for his Crypto.com commercial. Social media users dug up the 2021 commercial to spit it out at a time when the crypto market is bleeding billions in investor money. It doesn’t help that Damon called crypto one of history’s greatest achievements. As his character Mike McDermott said in Rounders: “If you can’t spot the sucker in your first half hour at the table, then you are the sucker.”
The Market Signal*
Stocks: Christopher Wood, global head of equity strategy at Jefferies, believes Indian stocks will go down further before they become attractive to foreign investors. Business Standard quotes him as telling investors that India remains the best emerging market growth story even though stocks remain vulnerable to the US Fed actions. The US market will be watching retailers’ earnings—-Walmart, Target, Home Depot and Lowe’s are lined up this week.
Early Asia: The SGX Nifty was up 1.8% at 7:30 am India time. The Nikkei 225 was up over 1% in morning trade. The Hang Seng too opened in the green.
SOCIAL MEDIA
Musk-Twitter Hits Pause
Elon Musk’s non-disclosure agreement (NDA) with Twitter appears to be the first casualty of the billionaire’s free speech and clean-up mission for the micro-blogging site.
WTF? Musk allegedly breached the NDA while revealing Twitter’s bot check sample size was 100. Experts feel Musk’s bot-check approach may be wrong. The allegation of the NDA breach suggests Musk might have revealed Twitter’s actual sample size, which means the expert opinion will apply to the company’s current methodology.
Looking to scoot? The breach comes after the Tesla CEO seemed to suggest that he was putting the $44 billion deal on hold over the calculation of spam/fake users on Twitter. The stock tanked 9.7% on Friday amid suggestions that he may be trying to renegotiate.
Turbulence: Twitter’s for-now CEO Parag Agrawal stated that the company needed to be “prepared for all scenarios” on the Musk acquisition. The previous day, Twitter froze hiring, while firing two senior executives. Wild.
COMMODITIES
Heat Made The Choice For India
Last week, we wrote about Prime Minister Narendra Modi’s glocal dilemma of choosing between feeding the world and feeding Indians. Wheat crop in many places has wilted under the blazing sun, making the choice of an export ban a fait accompli. Choosing to not risk food shortage and more inflation, the government has banned wheat exports.
The surprise ban has spread chaos and stalled over 7,000 loaded trucks in their tracks.
Globally unpopular: Russia’s invasion of Ukraine, a major exporter of wheat, corn and edible oil, has pushed up international supply of food. India drew flak from the G7 group of nations for the ban. Although India has said that it will consider specific requests from countries, the German agriculture minister said if every country put such curbs, the international food situation will worsen.
🎧 India was hoping to be the grain basket of the world. Instead it has been forced to stop overseas sales of wheat. It’s an example of the economic impact of climate change. We have broken it down for you.
STREAMING
You’re Watching The Netflix TV Network
Deadline reports that Netflix, which reported a fall in paying subscribers for the first time in a decade, is planning to live stream an upcoming slate of stand-up specials and unscripted shows.
Details: The platform may bring back its live stand-up show, Netflix Is A Joke. It’s also mulling real-time voting (albeit delayed by a few seconds) for its upcoming dance competition Dance 100. Its wildly-popular unscripted series Selling Sunset may have more live reunions.
The Signal
From ad-supported plans to embracing sports, Netflix is pulling all stops to arrest its slowdown. The shift to live streaming signals that Netflix is taking a page from the network TV playbook: live audience participation and viewership is typically a legacy media staple. That popular American reality shows Dancing With The Stars and American Idol will now air on Disney+ (which owns the ABC network) may have spurred Netflix’s decision.
Reed Hastings has also been eyeing global rights for live sports, particularly Formula One. Disney—whose recent subscriber growth was largely attributed to Disney+Hotstar’s IPL telecast—has exclusive rights to the Premier League until 2025 and gets gains aplenty from its live slate.
Cold shouldering live programming was one of the many reasons CNN+ failed. Netflix cannot afford the same mistake. It will increasingly look beyond its subscription-only, recorded programming laurels to keep its head above water.
🎧 As it struggles to add new subscribers, Netflix is being forced to do things that it never wanted to do. It is becoming more like a TV network in the bargain. Let us explain.
STRATEGY
SoftBank’s Sonset Marks Shift In VC Goalposts
Following Vision Fund’s record 3.5 trillion yen ($27 billion) loss for its financial year ending March 31, SoftBank CEO Masayoshi Son is implementing stricter investment criteria.
Quandaries: Global slowdowns aside, SoftBank’s Indian portfolio isn’t doing great either. Son marked down his investment in Paytm parent One97 Communications. Ola is contending with an e-scooter crisis and high-profile exits. Swiggy’s workforce crunch points to a nationwide shortage of gig workers. Meesho is facing flak for its ecommerce model. Flipkart and Oyo are among India’s top three loss-making unicorns.
Shifting priorities: The geese will no longer lay golden eggs. Tiger Global reported a $17 billion loss. Global banks are avoiding SPACs. And all of a16z’s publicly-listed portfolio companies barring AirBnB are trading below offer prices. As valuations contract, VCs will prioritise capital efficiency over hypergrowth.
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Investors evaluating how a startup is progressing are always looking at 2 things: 1- How much time did it take In the prior world, 80% of the weight was on 1. If you went fast, that's all that mattered. Now the ratio is flipped. Act accordingly. | |||
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SEMICONDUCTORS
All In On Chips
Billionaire Anil Agarwal is a man with an uncanny nose for opportunity. Agarwal is also a seasoned hand at managing highly polluting but profitable industries such as mining and metal extraction. The latest one he has zeroed in on is chipmaking.
One company, STL, in his conglomerate also operates in high technology—making fibre optic cables and interconnecting devices deployed in data centres and networks.
Sunrise industry: In chipmaking, he likely spots an opportunity that is future ready and coming to him at a low cost due to government support. Agarwal, who has said he would invest up to $20 billion, has a tie-up with iPhone maker Foxconn and is eyeing a thick slice from the centre’s $10 billion incentive for fabs. He is seeking over 1,000 acres of free land plus access to cheap electricity and water. Armed with both optic fibre and semiconductor knowhow, he could even think of entering cutting edge emerging computation technologies such as in-fibre photonics.
FYI
New cement baron: Adani Group has clinched a deal to buy Holcim’s Indian cement business, which includes Gujarat Ambuja and ACC, for $10.5 billion.
Badminton’s 1983: India demolished 14 times champions Indonesia 3-0 to win its first ever Thomas Cup.
Beyond deliveries: Swiggy will acquire Times Internet’s restaurant tech and dining out app Dineout for $200 million.
Fishy: The Central Bureau of Investigation has launched a probe into a pan-India betting network involved in Indian Premier League matches held in 2019. The network allegedly received inputs from Pakistan.
Going global: UAE-based Etisalat Group has picked up a 9.8% stake in the UK-based Vodafone Group in a deal worth $4.4 billion.
Not available: Indian crypto exchanges have delisted stablecoin TerraUST and Luna following the collapse of the Terra Network.
Ditch and switch: Apple is testing iPhones that ditch its current “Lightning” port, in favour of USB-C. Last month, Europe voted to adopt USB-C as the standard across phones and other devices.
Key battle: A group representing large technology companies such as Google and Facebook has filed an emergency application in the US Supreme Court, seeking to block a controversial Texas social media law.
FWIW
Jugaad: It is Indian innovation that caught the fancy of the world, even becoming case studies in business schools. In Punjab, some enterprising folks converted top-loading washing machines into buttermilk-makers. The Russians have taken a leaf out of India in the middle of the war. They are using chips from dishwashers and refrigerators to fix their battle tanks and other war machines. Who knows, Vladimir Putin might even be tempted to use it as an example of ingenuity in one of his Mother Russia speeches.
Aunty and uncle aren’t kidding: You’ve probably heard about adults suing their parents for giving birth to them. The tables have turned. An Indian couple is suing their only son and his wife for not bearing them grandchildren. Sanjeev and Sadhana Prasad are seeking ₹5 crore ($650,000) as “reimbursement” for the “mental cruelty” of not becoming grandparents after spending time and money on raising their son. Someone tell them that’s the bare minimum of being a parent.
Ukraine’s swansong: Ukraine beat Spain and the UK to win the Eurovision Song Contest. Folk rap group Kalush Orchestra took it home with Stefania, a paean to the lead singer’s mother doubled as a rallying cry for Ukraine. The famously-camp contest also featured a Serbian singer who waxed eloquent about handwashing and Meghan Markle’s hair. A Norwegian electro group performed a number about hungry animals eating the singer’s grandparents.
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