🛍️ Alibaba’s big breakup

…and Disney ditches the meta Mouse House [Disclosures](   Baba breakup (David Becker/Getty Images)   Yesterday’s Market Moves   Dow Jones 32,394 (-0.12%) S&P 500 3,971 (-0.16%) Nasdaq 11,716 (-0.45%) Bitcoin $27,197 (+0.14%) Dow Jones 32,394 (-0.12%) S&P 500 3,971 (-0.16%) Nasdaq 11,716 (-0.45%) Bitcoin $27,197 (+0.14%) Hey Snackers, A course offering we don’t often see: AP Happiness. Finland, which has ranked as the happiest country for six years running, is hosting a four-day “[Masterclass of Happiness]( Apply by April 2 for a [chance]( to attend for free. Stocks dipped yesterday, led by the techy Nasdaq, as cooling banking fears made investors less hopeful that the Fed could cut rates this year. Rising bond yields also put a damper on stocks. Split Alibaba plans to split into six companies to position itself for a Chinese tech comeback Jack’s back… but Baba’s breakin’ up. A day after cofounder Jack Ma was finally spotted in China again, [Alibaba]( (aka the [Amazon]( of China) said it was [splitting]( its biz into six independent companies. Refresher: Alibaba.com connects 1B+ buyers/sellers, but Alibaba the company is much more than e-comm — offering services like cloud computing, logistics, and entertainment. Now Baba’s gearing up for a breakup: - New focus: Each Alibaba-held company will have its own C-suite and be able to IPO independently. Units include cloud, e-comm, logistics, and media. - Less trouble? Alibaba shares jumped 14% yesterday on hopes that the breakup would ease China's regulatory concerns over its power. Smaller companies = less of a threat. Beijing’s “tech rectification”… means tech’s gotten #rekt. Over the past two years China has [cracked down]( on dozens of tech companies, levying big fines and imposing strict anti-monopoly laws to reel in their influence. In 2021, Baba was fined a record $2.6B after the gov’t said it failed to comply with anti-monopoly laws. Fintech giant Ant Group (1.3B+ users) was forced to halt its $35B mega-IPO. The country’s crackdown plunged the value of Chinese tech stocks and contributed to its slowest GDP growth in decades. - The regulatory tide may be turning: DiDi (the [Uber]( of China) got the gov’t green light to relaunch its biz after an 18-month ban. THE TAKEAWAY Getting smaller can make you stronger… By breaking into smaller businesses, Baba could avoid being seen as too dominant, which could mean less scrutiny (and fewer penalties) from Chinese regulators. Keeping biz units separate could also help execs focus on industry-specific growth, rather than juggling several balls at once. If Baba’s split goes well, others could follow. Disno Disney and others backtrack on the metaverse as “the future of entertainment” gets old No more meta Mouse House… Entertainment all-star [Disney]( [reportedly]( laid off the 50-person team leading its dive into the metaverse. Formed last year, the group was partly responsible for what then-CEO Bob Chapek called the "next great storytelling frontier" (picture: immersive fantasy sports, digital theme-park rides, meta-movies). The cuts are only a sliver of 7K planned layoffs as Disney slashes costs and tries to make its streaming biz profitable. Meta-messy… Disney is just the latest company to see its lofty metaverse goals get squeezed under the IRL weight of rising interest rates and a corresponding shift from #growth-mode to #profit-first. [Microsoft]( is said to have dissolved its 100-person, manufacturing-focused metaverse team after four months in operation. And last month [Tencent]( reportedly dropped its metaverse-adjacent hardware and software VR effort. And then there's [Meta]( - Reality bites: Reality Labs, the business unit responsible for Meta's metaverse ambitions, lost nearly $14B last year. - Faceplant: After quarterly profit plunged, CEO Mark Zuckerberg introduced the company's "year of efficiency" — which could translate to a meta-vestment pullback. - New buzzword: This month Zuck wrote that AI, not the metaverse, is now Meta’s "single largest investment." Last month Meta released its large language model (LLaMa). THE TAKEAWAY Big bets don't have to be all or nothing… as Disney's mouse-sized metaverse move makes clear. Shifting macro conditions have sent media and tech titans scrambling away from their metaverse bets. Companies like Disney were smart not to overhaul their entire biz. But the trend doesn't mean the metaverse is dead on arrival. [Roblox]( no-headset-required take on the metaverse is [booming]( but remains a far cry from the "next chapter of the internet" hyped by Zuck. Still, it could eventually be enough to turn a profit. What else we're Snackin' - [BNPL]( [Apple]( intro'd its buy now, pay later service, Apple Pay Later (missed opp: iPay Later). It'll let users split purchases into four payments over six weeks. Rival [Affirm]( shares dropped 10% on the news. - [Green]( [Walgreens]( shares popped after better-than-expected quarterly sales growth, but profit fell on fewer Covid tests and reduced pharmacy hours at hundreds of stores where staffing shortages linger. - [Cleanup]( The Labor Department called [Dollar General]( a “severe violator” of workplace-safety standards. Since 2017, OSHA said it found 111 violations (obstructed fire exits, aisle clutter) and has imposed $15.5M in fines. - [Build]( Epic Games announced “Creator Economy 2.0” to share a sizable 40% of “Fortnite'' revenue with users who build in-game islands (based on how much engagement they get). It’s hoping to attract more players/creators. - [Update]( The DOJ alleged FTX cofounder Sam Bankman-Fried bribed a Chinese official with a $40M crypto payout to unfreeze Alameda Research accounts. SBF remains under house arrest and is facing 13 counts. 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up [here](. Snack Fact Of the Day Women make up 14% of heavy-load delivery and big-rig truck drivers [Read more]( Wednesday - Earnings expected from Cintas, Paychex, and Planet Labs Authors of this Snacks own shares of Apple, Disney, Amazon, Uber, Microsoft, and Planet Labs ID: 2818185 Robinhood Snacks newsletters reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC (Member [SIPC]( and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. 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