"Don't need Under Armour to sculpt these guns"

December 13, 2018
Dow Jones: 24,527 (+0.64%)
S&P 500: 2,651 (+0.54%)
Nasdaq: 7,098 (+0.95%)
Bitcoin: $3,432 (+2.10%)
10-Year Treasury: 2.911%

Break time from your gift guide scrolling (whoever they are, just get them a neck hammock. Trust us).

Markets got some groove back thanks to the last big IPO of the year.

1. Tencent Music just IPO'd and it sounds fantastic

Easy, Gaga... A new star hath been born. Tencent Music's the Chinese mashup of streaming song apps that just IPO'd on the New York Stock Exchange. It was supposed to take the stage last summer, but the Trade War delayed the album release. Then shares jumped 8% Wednesday on its debut.

Adele's not just a singer... And Tencent Music's not just an app. The 800M users generated over $300M in revenues so far this year because the streamer's more talented that only streaming:

  • Karaoke: Its top app is WeSing, which is basically an Instagram video of your mediocre "Shape of You" attempt
  • Strategic Partnerships: Spotify's not just a competitor. It's an investor. Tencent Music and Spotify exchanged shares of each other with each other to learn from each other. Meta.

The Takeaway: 2018, it's been un-real... This year's had the largest number of IPOs (227) and largest amount raised ($60.4B raised) in 4 years. Pressure's on 2019 to top that with Lyft, Uber, Airbnb, Pinterest, Palantir, and more tech warming up. Mic drop.

2. Under Armour falls 10% because its gear is "too good"

Unfurl the lax flow and dish out the crab cakes... Baltimore-based Under Armour hosted its annual shareholder meeting in its hometown. Then shares fell 10% because its earnings report was more golf than XTREME-BALL (should be a real sport) -- Sales are only expected to grow "modestly" next year. No one likes modestly.

"I need compression shorts that are missile-proof"... said no one ever. UA's core problem is that it's too "athletic," not enough "leisure." Humans in 2018 want workout fashion they can brunch in -- not sweat-wicking, anti-cold, anti-heat, moisture-destroying workout gear that'll make them guilty they're not pumping iron.

The Takeaway: Can't just hang with the guys... Lululemon's whipped out men's khakis to complement its yoga goods. Athleta just found a y-chromosome and launched its Hill City brand for dudes. Under Armour's gotta find a more balanced gender lineup if it's gonna win. Anything.

3. Arranged marriage might happen with Germany's 2 biggest banks 

After a decade of truly awfulness... Germany's government's pushing its 2 largest banks to merge. Desperate investors of Commerzbank and Deutsche Bank rejoiced on word the two might stop having to compete, and start having to find love in each other.

US Banks > Euro Banks… America's mega-banks are in good shape because the huge government stimulus that happened post-financial crisis started a vicious cycle. It’s different in Deutschland -- here’s das shindig going down:

  1. Bad Economy: Thanks to the Lehman Bros, Greek Debt, and Brexit crises
  2. Bad Profits: A weak economy + Greece's bankruptcy hurt bank earnings
  3. Bad Loans: The German banks issue fewer loans because they need to save $$
  4. Repeat: When banks don’t issue loans, the economy gets worse

The Takeaway: If you're gonna be bad, be bad together... Commerzbank and Deutsche haven’t been able to lay people off because German labor laws basically commit new hires for eternity (they're more life partners than employees). So the government's tweaking some laws to allow a merger that'll help banks find profitability.

4. Apple's $10/month premium news bundle's got some issues

Swipe US Weekly like you're waiting for the dentist… Texture’s the Apple-owned pioneer that brought magazines to tablets and phones. Apple says it's crucial to its News app, and News app's crucial to its future as a "Services" company. So it’s launching a premium News for $10/month this spring with a fancy re-branded Texture.

Media's skeptical… Condé Nast, Meredith, Hearst, News Corp, and Time built Texture in 2010 to disrupt their magazines before the internet did it. But The New York Times and WSJ don’t want in on the Netflix-style team because the $10/month price undercuts their normal price.

The Takeaway: Texture could save news... Publishers need more cash money because ad revenue and readership are Netflix and chilling. But getting you to dish out pocket money for headlines you scroll through for free is hard. Texture’s the best hope:

  • Readership: Apple News is pre-installed into 1.3 billion devices
  • Revenue: After a 1-week trial of premium, you’ll start paying $10/month without even knowing (charges straight on up to your iTunes account automatically)

What else we're 'Snacking

  • Venture: Bowery raises $90M to make indoor kale farming happen
  • Play: Amazon Basics is gonna start making toys
  • Awkward: Google finally gives up and hands the domain "" over to competitor DuckDuckGo
  • Acquirin': Walker & Co. beauty products for people of color just got bought by Procter & Gamble
  • Drive: Volvo whips out a subscription car service

Today's MarketSnacks Daily Podcast

  • Buy 1 podcast, get 8 podcasts free -- Men's Wearhouse and Jos. A. Bank are now "Tailored Brands" and the stock just dropped 26%...
Just Push Play:

'SnackFact of the Day
"Must include numbers and characters": The average internet user has 200 digital accounts that require a password

Submitted by Damian L. (Somerville, NJ)
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  • Earnings from David's Tea and Adobe

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