💉 Walgreens' big vaccine quarter

...and Deliveroo's "meh" IPO [Disclosures]( "Deliveroo is basically just Accio burger" Yesterday’s Market Moves Dow Jones 32,982 (-0.26%) S&P 500 3,973 (+0.36%) Nasdaq 13,247 (+1.54%) Bitcoin $59,060 (+0.12%) Dow Jones 32,982 (-0.26%) S&P 500 3,973 (+0.36%) Nasdaq 13,247 (+1.54%) Bitcoin $59,060 (+0.12%) Hey Feasters, Welcome to Day #1 of our rebrand from Robinhood Snacks to Robinhood Feasts. We're excited to bring you more stories, longer formats, and content as dense as a well-done Denny's steak. We hope you'll feel like you just bankrupted an all-you-can-eat buffet. Stocks jumped yesterday after President Biden [unveiled]( his $2T infrastructure and economic recovery package. Also: it's April Fools' Day ;) Vax Walgreens has vaccinated 8M+ Americans — but its coronaconomy moment is just beginning Classic first date ice breaker... Are you a Walgreens person or a CVS person? You'd think [Walgreens]( and its drugstore frenemies would be coronaconomy winners. But so far, the coronaconomy has hurt their sales more than it has helped. Social distancing means limited foot traffic. Mask-wearing + obsessive sanitizing means fewer people getting sick with other bugs (not just corona). Result: pharmacy sales of headliner cold, cough, & flu meds tanked. - Last Q: Walgreens still delivered stronger-than-expected earnings last quarter. Sales ticked up ~5% from a year earlier and its $1B profit was solid. But that might be just an appetizer... - This Q: Walgreens [raised]( its profit forecast, believing that the $$$ it'll receive for administering Covid vaccines will level up its earnings. Shoot your shot... The vaccine rollout has really started ramping up, as more states expand eligibility (New Yorkers 16 and over will be eligible next week). Walgreens has administered [8M]( vaccines so far, including 4M in March alone — which weren't included in the latest earnings. But this quarter's vax schedule could be the real profit phase for pharmacies: - The government pays pharmacies like Walgreens to administer Covid vaccines. It's kind of a reimbursement for pharmacists’ time, cotton balls, band aids, and smiley stickers. - $0: How much pharmacies have to pay for vaccines. The government foots the bill for the three FDA-approved shots, which range from $10-$30 for each full vaccination. - $40: This month, the government announced it'll increase the vaccine payment rate to $40/dose, up from $28 — aka: significantly more than each single dose costs. THE TAKEAWAY We could see twin profit puppies... for pharmacies and other vax-giving retailers like [Walmart]( and [Kroger](. Retailers are expected to administer half of the shots, with government sites doing the rest. For them, the new $40 payment is almost all profit, since they don't buy vaccines. Last month, CVS forecast a $400M-$500M profit from Covid tests and vaccines for 2021. These retailers will also win more customers from the surge of people coming for vaccinations (and the pre/post-vax wait time). Come for the vax, leave with the Trail Mix and press-on nails. IPO Amazon-backed food deliverer Deliveroo plunged after its London IPO Fish and chips on the Thames... Deliveroo is the UK's equivalent of DoorDash. But instead of zipping around in Toyota Camrys, 80% of its "drivers" deliver on bikes (with big turquoise food backpacks). In 2020, Deliveroo controlled 1/3rd of the UK food delivery app market and ~20% of Europe's. After DoorDash's [blowout]( IPO in December, Deliveroo became one of Europe's most-hyped IPOs: - The Amazon-backed food deliverer went public on the London Stock Exchange yesterday, in Britain’s largest-ever tech listing by value. Amazon-backed food delivery sounds buzzy — but the stock plunged 26% on Day #1 of trading. Chips arrived soggy... Like Uber and Grubhub, Deliveroo relies on the flexible gig worker model to run its biz. But lately it's been feeling [pressure]( over workers’ rights. Investors are worried Deliveroo might face the same regulatory fate as Uber, which recently had to [reclassify]( all its UK gig drivers as "workers." If Deliveroo also ends up having to provide workers with benefits like vacation pay, its balance sheet could take a big(ger) hit. - Deliveroo is already deeply unprofitable. It lost $220M+ in 2020, and has yet to see a profit. That scared off investors. - Also... the "pandemic edge" is fading. DoorDash shares have plunged 40% since their early February high, as we reunite with restaurant bread bowls. THE TAKEAWAY Geography can shape markets... US markets (see: the Nasdaq and the NYSE) are used to seeing unprofitable tech companies soar. Deliveroo's listing is a test for the London market, and its acceptance of these growth-obsessed startups. Also: while the gig economy scored a major victory in CA's [passing]( of Prop 22, gig work is coming under increasing scrutiny in the UK — and it's not a state-by-state thing. If Deliveroo had to reclassify workers there, it would affect its entire UK biz... which makes up nearly half its sales. What else we're Snackin' - [Word]( Microsoft won a major US Army contract for augmented reality headsets, worth up to ~$22B over 10 years. - [Polls]( Black Fortune 500 execs, including Merck CEO Ken Frazier, are urging their corporate peers to fight new Republican voting restrictions. - [Armrest]( Delta will stop blocking the middle seat on its flights starting May 1st, becoming the last airline to end the Covid-era policy. - [Floofy]( Chewy stock jumped 5% yesterday after the online pet retailer posted a surprise quarterly profit thanks to (more) record puppy adoptions. - [WFO]( Google is speeding up the partial reopening of its offices and putting strict limits on future WFH. 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up [here](. The Snacks Daily Podcast "New song on Apple Music: Disrupt the Record Label." Apple just whipped out its checkbook to invest in UnitedMasters, an alternative to the major record label system. Is this the next step in the creator economy? More on our [snackable 15-minute pod]( on Spotify or Apple Podcasts (so meta). Snack Fact Of the Day [US producers churned out 477 square miles of more cardboard in 2020 than in 2019 — enough to cover New York City and then some]( Thursday - The stock market is closed for Good Friday (so we'll be back in your in inbox on Monday!) - March unemployment rate is released Disclosure: Authors of this Snacks own shares of CVS, Uber, Delta, Google, Amazon, and Microsoft ID: 1587531 Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC. 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