Oct 28, 2022 Oct 28, 2022

The Worst Part of Meta’s Earnings Was… | The Daily Peel | 10/28/22

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Oct 28, 2022 | Peel #326

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Market Snapshot

The worst part of Meta's warnings was…

How management is running a good thing into the ground. Continuing to invest in the metaverse pipedream in a down market for ad spending is a head-scratcher.

Downtown Josh Brownsaid on CNBCthat "this is a company with amazing fundamentals, horrendous sentiment…you'd rather it that way than the other way around."

In other news,US GDP grew 2.6%in the quarter on the back of a resilient consumer.

market summary

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Macro Monkey Says

The Renter Recession is Well Underway

If you live in a major metro, you're used to getting f*cked on rent. But now, even the middle of the country is suffering from eye-watering price surges.

An "affordable" apartment used to mean one that ate 30% or less of your take-home pay each month. But that number is closing in on 50% in some cities.

  • More $ spent on rent = less disposable income for everything else, which is a bad sign for consumer spending
  • Landlords know that with 7% mortgage rates, buying a home is out of the question
  • Wide-ranging RTO mandates have dampened hopes that people would relocate to smaller cities and balance out rental markets across the country

It's not just NYC and the Bay Area-YoYrents are upby 40% in Raleigh, 32% in Phoenix, and 26% in Memphis

Meme of the day
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Source

What's Ripe

Shopify ($SHOP)↑ 17.34%↑

  • Shopify investors were begging for a strong end to the year after losing 75% YTD, and upbeat Q3 earnings helped recover some ground
  • It's got a long way to go before it becomes a true Amazon killer, but small businesses rave about the service

Caterpillar ($CAT)↑7.79% ↑

  • Strong digger demand and enough pricing power enabled $CAT to overcome higher component costs in the quarter
  • The stock is a proxy for the broader economy, and its strong performance is a good sign going into Q4

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What's Rotten

Meta ($META)↓ 24.56%↓

  • Just waiting until Zuck decides to broadcast an earnings call all alone in the metaverse
  • Q3 was a sh*t sandwich…revenue down, losses expected to accelerate next year, no ROI from the metaverse in sight

Credit Suisse ($CS)↓20.04% ↓

  • $CS is turning to theunlimited supply of Saudi wealthto pivot its business away from pesky Wall Street
  • Imminent collapse seems to be off the table for now, but investors were jittery about such a big change for the 166-year-old firm

Data Peel
chart

Source

Thought Banana

Wonder Boy Founders Lose Their Luster

Whether Zuck is part robot or just a very strange human being, you don't get onto the Forbes billionaire list without some combo of smarts and skill.

But founding a revolutionary company and riding a subsequent bull market wave is very different from executing a massive pivot just as a recession hits.

  • His supervoting shares give him near-totaldecision-making power
  • Internal memos show many Meta employeesthink the metaverse is a waste of time, and the company has had to beg them to spend more time within it
  • The dude has made it clear he doesn't give a f*ck what people think, including his investors
  • Snap is another high-profile meltdown with a founder that calls all the shots

The big question: Will investors reject the kind of unilateral power Zuck has from other founders in the future after seeing his decisions crater the company?

Banana Brain Teaser

Yesterday-I know a word; six letters it contains. And yet, if you take one away, twelve is what remains. What's the word?

The word "Dozens."

Today- It's200 bananasoff theElite Modeling Package。抽!

Dead on the field lie ten soldiers in white, Felled by three eyes, black as night.What happened?

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