Hatch Weekly: Happy 25th birthday Amazon!

Yo Amazon, party like it’s your birthday

On July 5th, Amazon (AMZN) marked its 25th year in business, but don’t go popping those bubbles yet, Bezos. High-powered officials are challenging Amazon’s behemoth size and calling for it to be broken up, along with Facebook. Adding to Amazon’s woes, politicians also have questions about pay and working conditions. And let’s not forget about that tax avoidance problem.

No more love for big tech

Senator Elizabeth Warren, the Democratic presidential candidate, has released a plan to break up giant companies like Amazon and Facebook (FB). By imposing new rules on tech companies that have $25 billion or more in annual revenue, she wants to take back the power and give it to the people who have so freely given away their private information to companies who
profit from it. She’s not the only politician kicking up a fuss about Amazon. Rep. Alexandria Ocasio-Cortez (the OG AOC) has slammed Bezos for being a billionaire while his company pays its warehouse workers "starvation wages." Has the company’s low worker pay helped make Bezos the world's richest person? Bernie Sanders says hell, yes. And then there’s the hardly-paying-any-tax thing. Should a company pulling in billions of dollars of profits pay a lower tax rate than firefighters and teachers? Probably not. What they’re not paying in tax could go to figuring out how to reduce carbon emissions and save the planet they’re helping to destroy.

Go for gold with buy and hold

Amazon was the second company in the US to hit a market capitalisation of $US1 trillion in 2018, but it took a while to get there – Apple (APPL) was the first. Early investors saw disappointing returns for the first decade of Amazon’s performance as a public company. When Amazon first listed shares in 1997, all you needed was a $20 bill to buy a share of the company. Today, that same share is worth close to $US2,000, which goes to show that it’s better to invest in companies you believe in for the long haul. In the last five years, Amazon shares have gained more than 460% from about $US340 to roughly $US1,938 per share.

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Ford back in the driver’s seat, kind of

Ford (FORD) is going to market with an even faster, more powerful version of its Ford GT supercar for the low, low price of $1.2 million. Insert aneurysm here. The car will only be available to 45 speed demons because they’re only building 45 cars. Talk about exclusive! But there’s a caveat – it’s illegal to drive the 700 horsepower Ford GT Mk II on public roads.

Track attack

Okay, so their latest car is only for track use. It’s also not designed to comply with the regulations of any particular racing series. This sounds like a bad idea, but for creative engineers, it meant they had free reign to maximise the car's performance potential. What’s the point of all of this when most big auto companies are moving to build EV cars (hi Tesla (TSLA)) that are planet-friendly? According to Hau Thai-Tang, Ford’s Chief Product Development Officer, it’s for people (dudes, you know it’s just dudes) who want to feel what it’s like to cross the finish line in the Ford GT race car. You know you want to feel that. And it’s kind of throwdown to road safety: this is what the Ford GT could be if all restrictions for street use and basic human safety standards were removed. For instance, it has no airbags to save weight. Who needs airbags!?

Iacocca would have bought one

This Ford GT Mk II sounds up former Ford CEO’s alley. Lee Iacocca served as CEO of both Chrysler (FCAU) and president of Ford during a nearly 50-year career in the business, passed away July 2. He was one of the brashest and celebrated car-company executives. Credited with saving Chrysler from bankruptcy in the 1980s, he cut his teeth at Ford and is best known for introducing the Ford Mustang II to the world in 1973. His larger than life personality got him fired from his CEO post at Ford, but Chrysler picked him up 4 months later. Savvier than most, he managed to persuade President Jimmy Carter to sign the Chrysler Corp. Loan Guarantee Act of 1979, which gave Chrysler $US1.5 billion in federal loans for assistance, thus saving the company from bankruptcy. By 1984, Chrysler was bringing in more than $US2.4 billion in profit, locking in Iacocca’s fame as a badass automotive executive, and possibly serving up some humble cake to Ford. Rest in peace, Lee.

What’s hot in pot right now?

Things are on fire at Canopy Growth (CGC), or rather, they “fired” their co-CEO last week. Canadian co-CEO Bruce Linton, “stepped down” and it looks like Corona-owner Constellation Brands (STZ) was behind the push.

Drugs and alcohol don’t mix

In 2018, Constellation Brands expanded beyond alcohol by spending $4 billion to acquire 37% of Canopy with the ultimate plan to create CBD-infused drinks. The markets went nuts for the somewhat merger because it seemed like the perfect pairing: Canopy would bring the marijuana-know-how and Constellation would bring the beverage creation/distribution expertise. But like most marriages (of which 50% end in divorce), things got real. Strategies stopped aligning. Then, kaboom. Linton was busy rubbing shoulders with Snoop Dog and jailbird Martha Stewart while Canopy was focussing on medical marijuana. In the end, Constellation was unhappy with Canopy’s financial performance (or lack thereof) in the latest earnings report. The markets reacted, of course, dropping more than 6% last Wednesday on the news of Linton’s departure.

Who’s hot to trot in pot?

Speaking of Snoop Dog (who is a part owner of Canopy BTW), who are the most prominent players in pot stocks right now? You may have heard of Mike Tyson, who owns a cannabis farm and resort just outside of LA. At his “Tyson Ranch”, he’s opened a school that teaches people how to grow and how to invest in cannabis. But pot shares aren’t just for the heavyweights. Willie Nelson is known as the Grandfather of Cannabis, having started his own weed and cannabis company in 2015 with the name “Willie’s’ Reserve”. He sells his weed and cannabis wares in Washington, Oregon, Nevada, and Colorado. Looks like anyone can brand their own pot these days.

Other interesting stuff

Amazon could give the world a gift on its 25th birthday – by paying more tax
Ford and VW Are Set to Cooperate on Self-Driving and Electric Cars
Amazon’s Deliveroo Investment Is Halted for U.K. Scrutiny
Good Investors Make Investing Harder

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