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Hatch Weekly: $lack’s faux-IPO attack

Best star sign for cryptocurrency: LIBRA

Facebook’s (FB) latest cryptocurrency, Libra, is already creating a positive buzz for digital currencies, by helping Bitcoin crack $10,000 as word of its digital coin leaked. The new global cryptocurrency might be the brand cleanse crypto needed! Libra is expected to launch sometime in the first half of 2020.

Pioneers unite!

In a weird twist, Facebook has co-founded The Libra Association with other big players like MasterCard (MA), Visa (V), PayPal (PYPL), Uber (UBER), eBay (EBAY), and Vodafone (VOD-ADR). The association will be the monetary authority for the crypto coin, so it’s not really Facebook’s crypto, it’s a collective. Cute! Many innovators are jumping onboard stating that Libra is a great opportunity “for the pioneers of tomorrow” to democratise global currency. The association claims that Libra’s sole purpose is to empower people, particularly the 1.7 billion adults around the world without bank accounts. Sounds suspiciously democratic...

Fool me once, shame on you; fool me twice, shame on me

This isn’t Facey’s first dance with the digital dollar. Once upon a time, they ran a virtual currency, called Credits. Needless to say, it didn’t catch on. Libra is Zuck’s stablecoin answer to the problems with traditional banking (stablecoins are cryptocurrencies designed to minimise price volatility). He believes that sending money online should be as simple as sending a Snapchat (SNAP). Of course, to receive that money, you’ll need a digital wallet known as Calibra. Calibra will be a regulated subsidiary to make sure there’s a real separation between users’ social and financial data. Sounds safe, but then we know what they did last summer, er, in 2018. Which might be why they’ve called it Libra, the astrological sign that represents, wait for it… justice (*cough*). A digital shake-up of traditional banking is long overdue, but cryptocurrencies are known for volatility and criminality. Let’s see if the stars align for this new venture.

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Air Amazon

Amazon (AMZN) is expanding its reach by going full steam ahead into air cargo service since their public break-up with FedEx (FDX) earlier this month. Say howdy to Amazon Air, 50 Boeing aircraft that will now deliver all the stuff from their online shop. They plan on having 70 planes by 2021, creating thousands of jobs for the US economy.

Primetime

Amazon is betting big on distribution and is building up its in-house delivery network of trains, planes, vans, trucks, and even ocean freighters. With more than 10 million items available for one-day shipping, Amazon clearly needs its own fleet! This isn’t the only supply chain area they’re venturing into: they’ve got their Delivery Service Partner program that helps people start their own Amazon delivery business, and then there’s Flex, Amazon’s crowdsourced package delivery workforce, that just got its own app for iOS.

Shop til you drop

Amazon’s global shipping costs have grown fifteen-fold from 2009 to 2018, so it's likely they believe that an in-house network will be more cost-efficient in the long run. According to a recent survey by RBC, Amazon shoppers who get same-day delivery spend and shop more on the e-commerce site compared with shoppers who don’t get same-day delivery. So it comes as no surprise that Amazon is investing in faster delivery – they’ve spent $800 million this quarter to improve delivery infrastructures to make one-day free default delivery option for Prime members.

Slack’s non-IPO shows IPOs what’s what

Slack (WORK) went public through a direct listing last week, and Silicon Valley rejoiced. With an opening price of $38.50, it closed at $38.62, making the company worth $24 billion. If it had been a traditional IPO, it would be the fourth-biggest American IPO of 2019.

Are direct listings are better than IPOs?

Slack sold its shares in a direct listing which takes the company’s shares directly to the market and saves on the high investment banking fees, but can also lead to greater volatility in the share price. Spotify (SPOT)went public this way too, so we can only guess that others will follow suit. Like the other unicorns who have IPO’d lately, Slack is losing a tonne of money. It lost $138.9 million last year and plans to lose a lot more over the next few years. The silver lining is that revenues are growing fast, up to $400 million from $100 million just 3 years ago. Watch rival services from Microsoft (MSFT), Facebook (FB), and Google (GOOG) doubling down, in fact, Microsoft just banned using Slack from its workplaces, favouring its own chat platform, Teams. Dirty! (We like it.)

What’s the matter with competition?

Teams is one thing, butMattermost is a startup developing an open source messaging alternative that just received $50 million in a series B funding round. This motherlode follows a $20 million series A in February 2019 and a $3.5 million seed round in February 2017. Founded in 2014 in Palo Alto, Mattermost was borne from devs being fed up with crashes and an inability to export gigabytes of popular chat logs. The company works with Apple (APPL), NASA, Tesla (TSLA) and Uber (UBER), to name some heavy hitters. Uber’s uChat is a custom chat app built on top of Mattermost that’s able to process tens of thousands of users and over 1 million messages daily, without any pesky crashes.

Other interesting stuff

Investors Reward Companies That Talk Up Their Digital Initiatives
How Libra, Facebook’s Cryptocurrency, Would Work for You
Money Is Not Just for Men
Google to invest $1bn to fight the tech-fueled housing crisis
2 simple ways Warren Buffett decides what to invest in


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