Retail’s Anti-Christ

Too many stores, flat wages, changing tastes, and Amazon have created the perfect storm for retail. Today, all retailers are getting shelled. All, that is, except one.

Amazon has become the Prince of Darkness for retail and occupies a unique position, inversely correlated to the rest of the sector. Traditionally, stocks in the same industry trade in sympathy/lockstep to one another. No more. The markets now believe what’s good for Amazon is bad for retail, and vice versa. This becomes a self-fulfilling prophecy, as Amazon’s cost of capital declines while every other retailer’s increases. It doesn’t matter what the reality is — Amazon will win as they are playing poker with 10x the chips. They can muscle everyone else out of the game.

The real hand wringing is going to begin when people start asking if what’s good for Amazon is bad for… society. Amazon has increased the number of robots in its warehouses 50% since last year.

With the announcement of Amazon Go, retailers are laser focused on eliminating the checkout process. Who does this put at risk? The 3.4 million Americans or 2.6 % of the US workforce employed as cashiers (there are 3.5 million primary and secondary school teachers in US). Don’t be concerned, our new president is calling for a total and complete shutdown of the entry of robots “to the United States until our country’s representatives can figure out what is going on.”

Predictions for 2017

“Plans are useless, but planning is indispensable.”

— Dwight D. Eisenhower

Same could be said about predictions, but can’t help myself. Here are some of mine:

— Twitter will increase in relevance and decrease in value — sub $10/share. Jack Dorsey has become the accidental star of “Home Alone 3” as everyone bolts. Here are some people who do not work at Twitter:

Adam Messinger, former CTO

Josh McFarland, former VP of Product

Adam Bain, former COO

Jana Messerschmidt, former VP of Global Business Development and Platform

Nathan Hubbard, former Head of Commerce

Katie Jacobs Stanton, former VP of Global Media<

Kevin Weil, former SVP of Product

Alex Roetter, former SVP of Engineering

Brian Skip Schipper, former SVP of Engineering

Dick Costolo, former CEO

350 former sales and marketing employees

An additional 300 former employees

Mark Zuckerberg

Tom from MySpace

Cher

Me

You, perhaps?

— Twitter’s board is reaching Yahoo-like levels of negligence as it continues to tolerate a part-time CEO in the face of a crashing stock and layoffs. In 2017 I will purchase $5-10M in Twitter stock for $6-10/share, approach other shareholders, file a 13D and re-nominate the existing board sans the part-time guy (i.e., @jack), and the stock will pop 10%. Tweet? Fuck that, BOOM.

— Verizon will walk from, or shave $1B+ from the purchase price of Yahoo as they begin to recognize they may be inviting Mr. Death (mother of all liabilities) into their house. Yahoo’s hacks are bad, not knowing about it for years is worse, as criminal entities had access to these accounts and could plot, carefully, their nefarious activities. Someone will correlate an increased likelihood of being hacked with Yahoo email account possession, and we’ll be subject to late-night commercials from law firms asking, “if you have a vaginal mesh, or a Yahoo email account, you may be entitled to compensation.”

— Hacking, phishing schemes, and ransomeware will reach crisis proportions and take center stage in Congress, which will hold hearings that cement its reputation as having no fucking clue about technology.

— We will see enormous writedowns from Unilever and Walmart acquisition(s) of Dollar Shave Club and jet.com, respectively. The acquisitions are the most expensive hair plugs ever stapled on mid-life-crisis firms.

— Amazon, having bested Apple and Google in voice and machine learning, will run a successful test for zero-click retail (auto ordering/fulfillment) and will become the most valuable company in the world.

— President Trump’s first year will combust into unending scandal and calls for impeachment, as the complexities of geopolitics collide with poor self-control, weak intellect, and lack of empathy and respect for the public and government officials, respectively.

— Netflix is the operating system for the other screen in our life (tv) and becomes the fifth horseman (share price doubles) or is acquired by one of the horsemen or Disney.

Snapchat will not go public as it becomes evident they are losing traction at the hands of Instagram. The IPO market, in general, will remain weak as entrepreneurs and VCs find liquidity and capital in the private markets. The M&A market will remain robust as public firms face a grow-or-die market and (most) possess inflated currency.

— Hedge funds will continue to shudder and hemorrhage funds as investors realize they have underperformed the market by (near or) exactly the amount of their fees.

— Pinterest’s value will fall 50%+ as weak management and turnover begin to metastasize.

— Innovation in solar will result in the first viable alternative to fossil fuels and begin a decades-long reversion in power from autocrats, countries that won’t let women drive, Texas and Norway.

— Airbnb becomes the most disruptive private company, other than Amazon, in business and has the IPO everyone is expecting from Snapchat. By end of year, the firm is worth more than Uber.

— WeWork loses 75%+ of value from peak ($16B) and becomes poster child of unicorn mania.

— The St. Louis Blues win the Stanley Cup. I don’t watch sports — my dad told me this.

LaLa Land wins best picture at the 89th Academy Awards. I see movies, and love singing & dancing.

Life is so rich,
Scott

No Mercy / No Malice in Your Inbox.

Edit your preferences or unsubscribe