Oyo befriends Microsoft
Also in today's edition: Heat kills, cryptoverse doubles, FB meets Ray-Ban
Good morning! Robinhood made history. Unfortunately, the IPO has put it in the wrong bracket. The meme stockbroker, which wanted to gamify investing, debuted on the bourses and ended 8.4% below the IPO price. According to a Bloomberg report, Robinhood is now the worst IPO of a company its size. The spot was earlier held by MF Global Holdings, which traded 8.2% below its IPO price in 2007.
Anyway, on to the day’s stories:
Elon Musk wanted to be CEO of Apple. Or so they say.
Scarlett Johannson is paving the way for others.
Adani throws down the gauntlet to Ambani.
A New Rivalry Has Shades Of Old
In what appears to be a direct challenge to the Mukesh Ambani-led Reliance Industries (RIL), Adani Enterprises, the flagship company of industrialist Gautam Adani, declared it is entering the petrochemicals business.
Big move: The move comes shortly after Ambani announced a $10 billion green energy leap. The plan includes manufacturing photovoltaic cells, power storage systems, and hydrogen electrolyser making factories on 5,000 acres of land in Jamnagar.
Already there: The Adani group is already in the renewables business and has set up 25 gigawatts of electricity generating capacity. Adani Petrochemicals would set up refineries, petrochemical complexes, and also hydrogen-related chemical plants.
Battle royale: It looks like the first moves in a corporate rivalry the likes of which India has not seen in decades. Historians have recorded a corporate war in the 1980s where the protagonists were RIL founder Dhirubhai Ambani and Bombay Dyeing’s Nusli Wadia. Ambani arguably won that one and RIL now dominates the petrochem business in India. It had then reportedly spilled into the polyester yarn and stock markets of Mumbai and the corridors of power in Delhi.
A Black Cloud Hangs Over Disney
Over the weekend, Scarlett Johannson sued Disney over the simultaneous release of the latest film in the Marvel universe, Black Widow. The scandal has focused attention on the usually conflict-averse Disney. But things got messy over the weekend for the image-conscious moviemaker.
The first blow: Scarlett Johannson said Disney stiffed her by releasing Black Widow on Disney+ and in theaters simultaneously. And because some of her salary was linked to box office revenue, she demanded payment. Later, Johannson’s salary for the film became public, causing outrage.
What this means: Film rights are changing. In the future, actors are likely to demand a part of all revenue. Johannson’s suit is likely headed to a settlement as already rumours of a possible comeback into the Marvel Cinematic Universe get louder.
Microsoft Says Ola to Oyo
Microsoft is closing in on an investment round in Softbank-backed hotel chain Oyo. The Gurugram-based company is currently valued at ~$9 billion. There is no clarity on the valuation at which Microsoft joins Oyo’s captable.
Why now? The question that one should ask is why is Microsoft, of all companies, investing in Oyo? The travel industry in India is struggling. Lockdowns and a ban on international tourism have reduced revenue flow to a trickle. Oyo, too, has not been able to raise equity capital. It raised ~$660 million in debt just two months ago to keep things going. It also laid off 150 employees just before it raised debt to cut costs.
There are multiple ways to look at this. First, Microsoft is extremely bullish on travel and believes that when the world does open up, the floodgates will open for Oyo. It’s not a bad thesis to hold on to, especially with tourism revenue slowly coming back up in the US and Europe as vaccinations gain speed.
But Microsoft has done it before. In 2017, Ola switched its entire company from AWS to Azure. Soon after that when Ola was about to pivot to being an OEM, Microsoft came in as an investor. There’s a good chance Oyo may announce that it is switching to Azure as its cloud platform. Microsoft has assured itself guaranteed revenue, access to newer markets i.e. smaller hotels, and if things do rebound for Oyo and it does list as promised, a big exit.
Amazon’s got a cold
Andy Jassy must feel like he’s living a bad dream. Jassy, who took over as the CEO of the world’s biggest online retailer, Amazon, on July 5, is overseeing a slowdown in the company’s core e-commerce business as home-bound shoppers stretch their legs to head to malls and markets.
Not up to the mark: Although sales rose 27% in the second quarter, it missed analysts’ expectation of $115 billion by nearly $2 billion. Its sales and profit forecast also disappointed them. AWS, the division that Jassy built, reported a 37% rise in revenue to $14.8 billion, beating estimates.
Amazon shares, which had gained 11% this year, slid 7.2% after the disappointing show, wiping out $13.5 billion of founder Jeff Bezos’s wealth.
Big fine: Meanwhile, the company was hit with an $888 million fine by the European Union’s privacy watchdog for violating the bloc’s General Data Protection Regulation. The complaint was filed in 2018 by the French privacy rights group La Quadrature du Net.
Hook Up Story Cooked Up: Musk And Tim
Throwback to 2016: Tesla’s Model 3 is on the horizon but the electric vehicle company is mired in launch delays and a financial mess. Enter Apple. CEO Tim Cook offers to buy up Tesla. Musk agrees but wants to be at the helm of the electronics giant. Cook refuses after offering a censored expletive.
Or so alleges Wall Street Journal reporter Tim Higgins’ soon-to-be-released book, Power Play: Tesla, Elon Musk and the Bet of the Century.
What are the chances? While this is a second-hand story relayed to Higgins when tracing the eccentric electric car company’s journey, both Musk and Cook have deniedthe claim. They are both maintaining that they have never interacted with each other in the past.
However, Musk did tweet last December about trying to sell Tesla to Apple "during the darkest days of the Model 3 program”. Even then, he followed up by saying Cook refused the meeting.
Fireworks: If there’s a remote chance that such a conversation happened then it would become part of American corporate lore, wouldn’t it?
What Else Made The Signal?
Death by heat: By 2100, 83 million people may die because of global warming. That’s equivalent to Germany’s population.
Shiny startups: There’s a new unicorn on the block in India: OfBusiness, a B2B commerce platform is currently valued at $1.5 billion after a fresh round of funding from SoftBank.
Startup resources: The startup ecosystem in India is in for an overhaul as the Centre is planning a blockchain-based validation system that will ease compliance and make processes faster.
Hack fest: In the US, Russian hackers got into the email of some of the most highflying federal prosecutors’ offices in New York. As many as 80% of employee Microsoft email accounts were breached.
Hardcore vision: Very soon, Facebook and Ray-Ban will launch glasses with AR features. These next-gen shades will have Ray-Ban’s iconic frames with Facebook’s AR power.
Double whammy: The global cryptocurrency population has doubled from 100 million to 200 million in just four months, following an uptick in bitcoin prices from January-February this year.
Gundam-style: Odawara in east Japan will become the first city in the Asian country to have two manhole covers adorned with the popular anime series Mobile Suit Gundam’s design. Part of the Gundam Manhole Project, it’s part of an endeavour topromote tourism using the anime.
Memefied forever: Familiar with Sarim Akhtar, the man whose disappointment during an ICC Cricket World Cup match was so relatable that he became a meme? He has now been immortalised in the Hong Kong Memes Museum! Some twitterati even compared him to Mona Lisa.
Cartoon comes alive: Remember strange Spongebob Squarepants and his best friend Patrick? American marine biologist Christopher Mah recently spotted two creatures bearing an uncanny resemblance to the cartoon characters in the depths of the Atlantic Ocean.