Good Morning!

Happy Tuesday

Today’s article is brought to you by: 200% human and -100% AI 

Market Update

📊 Markets are little moved from last week as investors try to ascertain what’s next coming out of the banking crisis chapter - will economic activity and inflation come down as banks tighten up, putting an end to rate hikes? Or will the crisis push the economy into a real recession, driving markets even lower?

🟢 First Republic Bank was up 12% yesterday after First Citizens Bank agreed to purchase Silicon Valley Bank, easing concerns for the rest of the banking sector. More below!

🔴 Carnival Cruise Lines was down 5% yesterday because they’re a cruise line.

Banger Tweet of the Day

The Pope Do Not Play. Album Coming soon.

First Citizen Buys Most of SVB

What: First Citizen, the 30th largest bank in the US before today, agreed to acquire a majority of SVB almost 3 weeks since the FDIC took over.

The purchase includes:

• $56.5 billion in SVB deposits.

• $72 Billion of SVB loans, received at discount of $16.5 billion.

• $90 billion-plus of SVB’s assets will remain in receivership under the FDIC.

• The FDIC agreed to share any potential gains or losses on SVB’s commercial loans, and is financing the deal with a 5-year $35 billion loan.

Money Moves: The purchase will move First Citizen into the top 25 US banks in terms of asset size, and for better or worse, will bring in many clients from the tech sector.

First Citizen’s stock finished the day up 22%, and pretty much every bank in the US finished in the green.

Business Bytes

🚚 Uber Eats to Remove Thousands of Virtual Brands (WSJ)

• Uber is ridding its food-delivery app of many “virtual brands” (brands without storefronts) that list the same menu under multiple names.

• There are over 40,000 virtual brands on the app - accounting for over 8% of stores but only 2% of bookings.

📱 Apple Acquired a Startup Using AI to Compress Videos (Techcrunch)

• Apple silently acquired WaveOne, who was using AI to compress videos using less bandwidth.

• This is literally an episode of Silicon Valley.

✂️ Disney Eliminates its Metaverse Team as Part of Layoffs plan (WSJ)

• The team consisted of ~50 employees working to develop “Metaverse strategies”

• It’s looking like the Metaverse was probably a zero-interest-rates-phenomenon.

🧠 Elon’s Brain Implant company In Search of Human Trials Partner (Reuters)

• I’m trying to put my brain in the cloud for real for real.

©️ Techcrunch stole my copy, but its okay because they don’t read this newsletter anyway.

Lyft Brings in New CEO, Founders Step Back

Lyft announced yesterday they are tapping an existing board member to be CEO, and its two co-founders will step back from the day-to-day.

New Guy in Town: David Risher has been on the baord at Lyft since 2021, and has previous management experience at both Amazon & Microsoft.

Co-Founders: Logan Green will step back as CEO, him and the other co-founder John Zimmer will retain their board seats but pull back from the day-to-day.

Strugglin’ Business: Lyft has been outmaneuvered by Uber since the pandemic, dropping its share of the ride-sharing market from 38% to 26% since early 2020.

The company in pink chose to spend more time on things like scooters, bikes, and care rentals, while Uber pushed further into international expansion & food delivery, further entrenching its driver supply. Uber was also quicker to attract drivers with discounts and features while Lyft was always playing catch-up.

Lyft’s stock is down ~75% over the last 12 months, Uber is only down ~10%.

What’s Next for Lyft: Over 4 months ago I wrote on the ride-sharing market:

I stand by the above even more today - There’s no room for 2 winners here. Uber is killing Lyft on all fronts and will have the profits to show for it, investors will continue to have no appetite to own a second-rate asset in a winner-take-all market, and Lyft will die a slow death.

Today’s Challenge: Coffee’s on you - venmo someone out of the blue (that rhymes).

Thanks for reading, go out and make today a great one! 🫡 

Much Love,

Andrew