TikTok Bill: What's Next for Users? 🤯

⌛ Tick-tock goes the clock placed on ByteDance’s TikTok. March 18, 2024 | Peel #669 Silver Banana goes to... [CapLinked. ]() In this issue of the Peel: - 🤔 Consumer spending is holding its ground… who would’ve guessed? - ⛔ Apparently, it is possible for tech stocks to have bad earnings. - ⌛ Tick-tock goes the clock placed on ByteDance’s TikTok. Market Snapshot 📸 = Banana Bits 🍌 - The [big question](=) now looming over the FOMC is leading into this week’s meeting - Investment in clean energy is starting to [dominate that of fossil fuels]( - Weeks following the death of Alexei Navalny, Putin “wins” Russia’s “election” for “President” [yet again]( You’re Probably Wondering How We Ended Up Here… Caplinked is a BETTER data room option. Why are bankers still using VDRs that could be in a tech museum? It’s like clinging to flip phones in an iPhone era. Enter Caplinked: the sleek, quick, and easy-to-use platform that makes closing deals feel like a breeze instead of a relic hunt. We’re the upgrade your deal-making deserves - modern, efficient, and without the kick in gut pricing. Forget the tech equivalent of stone tablets; Caplinked is here to revolutionize how you close deals. [Time to upgrade and speed up with Caplinked.]( Macro Monkey Says 🐒 Going Strong It must be the luck of the Irish. U.S. economic data continues to come in stronger than the performance of my liver over this St. Paddy’s Day weekend (and yes, it is spelled with two d’s, not t’s). Last week’s retail sales data showed that Americans are still pursuing their all-time favorite hobby of spending money. It wasn’t exactly a Duane “The Rock” Johnson-strong report, but maybe more like The Rock pre-steroids. Let’s get into it. The Numbers Retail sales in the U.S. increased 0.6% in February compared to the prior month. [Source]() Economists were expecting an increase of 0.8%, but clearly, we don’t love each other that much, given the lower-than-expected numbers during V-Day’s month. Excluding the biggest ticket items—cars and other vehicles—retail sales grew by 0.3%. Again, that was slightly below economist expectations of 0.4%, but not enough to cause any real concern… for now. The worst part of the report, similar to the February jobs report, was buried in the Commerce Department’s revisions. Originally, we thought spending in January had decreased just 0.8%, but now, the data says retail sales fell 1.1% for the month. [Source]() By the way—falling retail sales might sound like the death knell the U.S. economy has been waiting for, given that ~2/3rds of our GDP comes from spending, but that pretty much always happens in January following the high-cost holiday season. Retail sales are a primary gauge for the health of U.S. consumers as trends in their spending (or lack thereof) give the clearest view into the health (or, again, lack thereof) of our economy for the average American. So, How Are Consumers? Looking at consumers in the U.S., you wouldn’t necessarily see a whole lotta health given our tendency to be way too overweight, but the good news is that bank accounts are still overweight too. As inflation has cooled and the labor market has remained strong, 2024 could be the year in which the monthly economic-super-bowl report switches from the CPI to retail sales. Now, don’t get me wrong—the labor market and inflation trends play huge roles in determining consumer spending levels, but there haven’t been many surprises here of late. [Source]( But, according to Bank of America, we don’t have much reason to expect a surprise in retail sales data for a while anyway. In the above chart, we can see that checking and savings balances remain well above pre-pandemic levels. That gives consumers a whole lotta wiggle room and extra funds to dip into. Estimates of total “excess savings” remain elevated as well, indicating that in between all the yapping and complaining on X, consumers are doing well for the most part. The Takeaway? Consumer spending is holding up relatively well. We just had a holiday weekend, and March Madness begins tomorrow—Americans are feeling good. The sting of inflation and other financial f*ckery continues to be felt in grocery stores, gas stations, and Zillow, but our economy appears to have enough cash saved and a robust enough labor market to manage these ever-present challenges. We keep looking for the next “shoe to drop”—whatever that expression means—but once again, we aren’t able to find anything. And of course, when we do eventually stumble upon weak data, you apes will be the first to know. Stay tuned. What's Ripe 🤩 GigaCloud Technology (GCT) 📈23.3% - Oh, you guys are still buying Nvidia? Might as well be riding a horse & buggy too because the market’s new darling, GigaCloud, ripped on Friday. - GigaCloud Technologies is a storage and fulfillment provider for large parcel companies, and over the past year, shares are up over 632%. - Demand for large parcel merch has mooned lately, giving GigaCloud a 95% revenue jump and allowing the firm to dominate expectations. Fisker (FSR) 📈12.8% - The gravediggers are still piling dirt on Fisker, but yesterday, they breathed life again. We just can’t tell if they actually survived or if we’ve got a zombie on our hands. - Following a WSJ report predicting a pending bankruptcy filing, Fisker assured investors they have steps to take before their battery fully runs dry. - The EV maker plans to raise funds, although it hasn’t decided whether to do so through debt or equity yet. Both options suck, but I guess indebted/diluted is better than dead! What's Rotten 🤮 Adobe (ADBE) 📉13.7% - Apparently, it is possible for tech stocks to have bad earnings. It’s been a while since we got one, but Adobe wants to be a trendsetter. - Beating on both the top and bottom line, Adobe’s depression-inducing guidance for Q2 killed the stock, guiding for a 1-2% decline in non-GAAP EPS. - Sales aren’t expected to grow much more than ~2% either. Adobe is straddling the AI fence, unable to decide if this is their kryptonite or steroids. Check out our thoughts in Friday’s 3-Minute Peel [video here](=). Ulta Beauty (ULTA) 📉5.2% - Talk about “This is why we can’t have nice things!” Ulta delivered a helluva quarter, and guidance wasn’t too shabby, but the stock’s day sure was. - Sales for the make up company grew 10% in 2023, with same-store sales growing an average of 2.5%. Operating margins of 15% beat as well. - Overall, it was a damn good year for Ulta. Their Target partnership is expanding while the firm plans to double share repurchases this year to $2bn. Thought Banana 🤔 Tick-Tock Wow, this is getting spicy… and fast. It’s become clear—Joe Biden does not believe that “pookie is looking absolutely fire.” A White House representative took time on ABC yesterday to urge the Senate for a quick vote on the “TikTok Bill.” What’s Going On? Everybody (literally this time) has been talking about H.R. 7521—the ‘TikTok Bill”—over the past week or so since the vote was on its way to the House. Now that the House of Representatives has passed the bill—overwhelmingly, I might add, with those supporting the bill outnumbering those against it by 5.4x. On Sunday, National Security Adviser John Kirby said on the bill, “We’re glad the House took it up. And we urge the Senate to move swiftly on this.” To be clear—the odds of a nationwide ban are low and incredibly hard to enforce. So, it’s much more likely that the U.S. will force the sale of the TikTok-U.S. of ByteDance to an American corporation or organization or have some kind of shared ownership trust. In its current form, ByteDance would have 180-days following the passage of this bill into law to divest its ownership of TikTok-U.S. Based on the app’s popularity and sentiment of the bill, this appears the far more likely outcome. The Deets So, the part that nobody is talking about here seems to be what the bill actually passes into law. This is not specific to TikTok, but rather, any and all “foreign adversary controlled applications” or FACA. [Source]( Basically, the bill makes the operation of a FACA illegal. A FACA is specifically defined as an application that falls under one of the following categories: - Owned by a company that is domiciled or operates under the laws of a foreign adversary - Is at least 20% owned by a company in a foreign adversary - “...subject to the direction or control of a foreign person or entity" Or, the secondary path to define a FACA is any application of which the President believes “present[s] a significant threat to the national security of the United States." TikTok, needless to point out, checks off all four of these definitions. But, the scary part here is how vague and wide-reaching that kind of language is. For starters, enforcement of the bill is done at the app store/hosting layer, not at the actual application itself. That means Apple and Google are in the hot seat as well if these applications were on their devices and services. Even worse, however, has to do with that “secondary path.” This essentially permits the U.S. President to ban any application of which they can make an argument that it presents a national security risk to the United States. To better understand why, here’s a totally random, definitely unrealistic example that certainly hasn’t already been considered by the current President. - Billionaire rich guy buys/launches a social media site of their own - They then publicly disagree with the current Administration - Literally, anything to do with this totally random, unnamed billionaire rich guy gets used as an argument for why their ownership is causing a national security threat - President chooses to ban the app, forcing Apple and Google to remove it from their devices and app stores You see what I’m getting at now? The problem with these reactive, news-grabbing bills is that they’re so dense, rushed, and broadly overarching that Congressional representatives aren’t able to be as surgical in their legislation as Americans would like them to be. Nobody wants the President to be able to just ban an app on a whim. But again, nobody has the time or attention span (largely thanks to TikTok, actually) to understand what they’re voting on. So, Congresspeople do what regular people do, too—fall in with their party line in order to remain “part of the team.” Overly broad, undigestable bills not only grant the federal government more power than they’re due but further sew division by encouraging party alignment as opposed to individual analysis, opinion development, and debate. I’ve already rambled for too long here, but you get the idea. The forced sale of TikTok is a temporary band-aid to what is likely a problem that requires a more surgical procedure. We’ll see how it goes in the Senate soon enough. 💭 The Big Question 💭: Will TikTok be banned or forced to sell in the U.S.? What company would be the lucky winner if they did sell? How will this alter user experience on the platform going forward? Banana Brain Teaser 💡 Previous 🗓 On a vacation, Rose exchanged $500 for Euros at an exchange rate of 0.80 Euro per dollar and spent 3/4 of the Euros she received. If she exchanged the remaining euros for dollars at an exchange rate of $1.20 per Euro, what was the dollar amount she received? Answer: $120 Today 🕐 Bouquets are to be made using white tulips and red tulips, and the ratio of the number of white tulips to the number of red tulips is to be the same in each bouquet. If there are 15 white tulips and 85 red tulips available for the bouquets, what is the greatest number of bouquets that can be made using all the tulips available? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “I would rather earn 1% off 100 people's efforts than 100% of my own efforts.” — John D. Rockefeller How Would You Rate Today's Peel? 😁[All the bananas]() 😐[Meh](=) 😩[Rotten AF]() Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE]( // [WSO ALPHA]() // [ACADEMY](=) // [COURSES]() // [LEGAL](=) [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353