What I wrote last week
Business
Kroger has to win over Wall Street and Washington on its Albertsons deal – here’s how it plans to do that. It’s entirely plausible that there are operational synergies between the two companies. For instance, instead of having two purchasing departments of 1000 people, the combined company may only need 750 after the acquisition. The combined forces can likely result in more bargaining power and lower item expenses. What I seriously doubt are 1/ whether the two companies can gel together culturally and 2/ whether they have the capability to pull off advertising. Cultural mismatch is among the biggest reasons why acquisitions or mergers fail. The bigger a transaction, the bigger this risk. Regarding advertising, yes, it is a high-margin business. But these two grocers hardly have experience in delivering the kind of advertising that can convince investors that splurging out $25 billion is the best use of their capital. We’ll see.
($) Even After $100 Billion, Self-Driving Cars Are Going Nowhere. “Our driverless future is starting to look so distant that even some of its most fervent believers have turned apostate. Chief among them is Anthony Levandowski, the engineer who more or less created the model for self-driving research and was, for more than a decade, the field’s biggest star. Now he’s running a startup that’s developing autonomous trucks for industrial sites, and he says that for the foreseeable future, that’s about as much complexity as any driverless vehicle will be able to handle. Self-driving companies have fallen back on shortcuts. In lieu of putting more cars on the road for longer, they run simulations inside giant data centers, add those “drives” to their total mile counts, and use them to make claims about safety. Simulations might help with some well-defined scenarios such as left turns, but they can’t manufacture edge cases.“
World’s top chip equipment suppliers halt business with China. The measures sound draconian, but in order to stop China from growing its semiconductor industry, I believe this is what it takes. At least, it will bring the Asian country to the negotiation table
Shein and the Tech Cold War. If you heard about Shein but don’t know much about the company, read this!
NFL Sunday Ticket still up for grabs as Apple pushes for flexibility with game rights. As an Apple shareholder, I do think Apple is doing the right thing by holding its grounds. Apple TV+ is still a minor player in the streaming market and likely unprofitable at this point. Tacking on an NFL package that costs arms and legs wouldn’t make it a profit center overnight. Hence, there needs to be a strong business case for Apple to shell out the kind of money that NFL is demanding. If there is no win-win solution, I’d rather see Apple leave the negotiation.
Apple freezes plan to use China’s YMTC chips amid political pressure. One of the most valuable companies in the world put on hold a product plan which it has been working on for years because of geopolitical conflicts between the US and China.
($) Coming Soon on Netflix: A New Netflix. Content released in batches, instead of the binge model. Focus more on quality instead of quantity. Crackdown on password sharing. A new ads-supported tier. A significant change in culture. A new Netflix is starting to form. Bears will say that because Netflix is doing all the things it said it would never do, that’s a sign of a company in decline. Bulls will argue that the new changes will allow Netflix to compete in a hyper-competitive streaming market. Either way, the company is unlikely to regain its former valuation or the “darling of Wall Street” position that it once held
Is the Uber, Lyft and gig economy battle over workers nearing its end game? It is unreasonable to force companies to pay full-time compensation to workers who want the flexibility of the gig model. Regulators on the left love to enact rules to protect workers’ interest. The intention is great, but they need to find a common ground here. Right or wrong, the fact remains that many workers love the freedom that the gig model offers. Any new regulation needs to take that into account. Plus, additional expenses will eventually be passed onto consumers. Unlikely there is competition as the biggest players like DoorDash, Uber or Instacart will have the scale advantage over smaller companies.
Exclusive: Amazon’s attrition costs $8 billion annually according to leaked documents. And it gets worse. A damning report on employee attrition problem at Amazon. It paints a picture of a company that has serious control issues. Andy Jassy’s reign has been littered with challenges so far. Stock rout, slow growth, miscalculated planning in terms of hiring and warehouse capacity, departure of experienced veterans and leaders, and now this. I am a fan of Amazon and a shareholder myself, but this really gives me some food for thought on the outlook of the company
Other stuff I find interesting
New York seems to have a weed store on every corner. None of them are legal. A fascinating read on the unnecessarily complicated situation regarding the legality of marijuana selling and buying in New York.
Why high speed rail hasn’t caught on. The economics of high speed rail (HSR), the bumpiness of the Earth, the technical challenges of building and maintaining safe trains are the main factors why HSR is not yet popping up in many countries
Minerva Lithium uses absorbent material to change the way we extract lithium. The tech here looks very promising, given the importance of lithium in how we advance technologies and how harmful the extraction of lithium is environmentally
Stats
Almost 25% of the world’s sea bed has been mapped
75% of the Time We Spend With Our Kids in Our Lifetime Will Be SpentBy Age 12
As of Q3 2022, Apple Pay captures 44% of in-store mobile wallet transactions
Minh Quang Duong 