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Tiny pouches, big profits |
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Anthropic said its new Claude AI model can control your computer, and during a demo the bot decided to browse pictures of Yellowstone National Park. AI yearns to touch grass. Stocks notched their worst day in over a month as investors exited Big Tech stocks and digested the latest round of earnings. After the bell, Tesla led a rebound. Meanwhile, existing-home sales fell to their lowest level in 14 years. 🎙️ Volume up! Our "Snacks Mix" podcast covers the story everyone's talking about, plus the story everyone should be talking about. Don't miss our latest, and most exciting, episode on Spotify or Apple Podcasts. |
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#Zynning… You know your brand's big when it becomes a verb. Philip Morris International bought nicotine-pouch brand Zyn in 2022 for $16B; this year PMI expects to sell up to 580M cans of the smokeless stuff. The Marlboro maker's stock jumped 11% Tuesday to an all-time high after reporting an 8% sales spike for Q3 and raising its guidance. PMI said it's catching up to sky-high demand from Zynners: it shipped 41% more cans last quarter after investing hundreds of millions into factories that'll churn Zyn out 24/7. |
- Smoke's clearing: Smokeless products, which include heated tobacco devices, now make up nearly 40% of PMI's revenue, a share that's grown annually as consumers skip cigs.
- Leader: PMI said Zyn has 73% market share for nicotine pouches. At its peak, in 2019, Juul was said to have dominated 75% of the e-cigarettes market.
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Do you get déjà vu… Both Juul and Zyn gained traction on social media and caught regulators' attention as they grabbed market share in booming new categories. Zynfluencers on TikTok have been hyping the "lip pillows" in flavors like "espressino" and "bellini," raising regulators' eyebrows. The FDA this spring warned retailers to stop selling flavored Zyn products that could appeal to teens. DC's attorney general later subpoenaed PMI, requesting info around the company's compliance with the region's flavored-tobacco ban. |
- Murky: PMI calls Zyn "a better alternative than continued smoking." Nicotine pouches are not on the FDA's list of recommended nicotine replacements.
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No smoke doesn't mean no fire… After a crackdown fueled by concerns over teens vaping culminated in the FDA issuing a ban on Juul, e-cig sales dropped and Juul lost its market dominance. The number of teens who vape dropped to a decade-low this year, but nicotine pouches — which 1.5% of teens use — are stoking familiar fears. If Zyn has trouble surviving the scrutiny, new competitors are cropping up that could take its place. |
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- Ease: TOPT is a one-ticker solution that gives investors exposure to the 20 largest U.S. companies.
- Exposure: TOPT holds some of the largest companies in the technology, consumer goods, communications, healthcare, and financial services sectors.
- Growth: Over the last 12 months, these companies have returned 45% and seen revenue growth of ~ 4%.1
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- Ease: TOPT is a one-ticker solution that gives investors exposure to the 20 largest U.S. companies.
- Exposure: TOPT holds some of the largest companies in the technology, consumer goods, communications, healthcare, and financial services sectors.
- Growth: Over the last 12 months, these companies have returned 45% and seen revenue growth of ~ 4%.1
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Unsaved progress has been lost… Netflix isn't a completionist when it comes to gaming. The streaming leader has shuttered "Team Blue," its big-budget (aka AAA) gaming studio, less than two years after it was created and before it ever released a game. Netflix has launched 100+ games to subscribers since it first entered the button-mashing biz in 2021. The closure of Team Blue appears to be a retreat from "Grand Theft Auto"-sized ambitions and a refocus on its more casual mobile titles. |
- VIPs log off: Team Blue was helmed by a stacked team including the creative lead of "Halo," the art director of "God of War," and the exec producer of "Overwatch." All three have reportedly left Netflix.
- 2nd screen: Netflix'll keep churning out simpler mobile titles tied to its own IP (like a narrative game based on "Love Is Blind"). Still, growth has slowed, and just 1% of daily users play Netflix games.
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Gaming's hard work… High-profile games haven't been the most fruitful enterprise. Ballooning budgets ("Grand Theft Auto 6" will cost a rumored $2B) and a decline in US gamer spending has sent publishers on a cost-cutting spree. There've been an estimated 13K layoffs in the industry so far this year. That one-two punch has been surrounded by some eye-popping failures. Sony's $400M shooter "Concord" reportedly made back just $1M before the company took it offline last month. "Assassin's Creed" publisher Ubisoft recently delayed a major title and announced its "Star Wars" game hadn't hit sales goals. |
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Bigger ain't always better… Keeping it simple could be lucrative for Netflix. Mobile games may lack the prestige (and pixels) of AAA titles, but they make up for it in loot. Phone gaming is expected to account for half of all global gaming revenue this year, dwarfing console and PC numbers. The lucrative and weird ad business behind mobile games could also be on Netflix's radar: the streamer is said to be weighing putting ads in its games. |
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When AI companies test their AI models for the absolute worst things they could be used for, they're ignoring the actual real-world harms that people are being subjected to right now. Read more. |
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- Coca-Cola topped Q3 estimates after higher prices helped offset slowing demand for non-soda bevvies like water and sports drinks.
- EV maker Rivian has been cited for 16 serious safety violations, including worker injuries, since the start of last year.
- The CFPB fined Apple and Goldman Sachs $89M, alleging the duo misled Apple Card consumers and failed to report thousands of disputes.
- Tesla stock revved up after it beat Q3 profit-growth estimates, boosted by its regulatory credits biz.
- Boeing reported a $6B quarterly loss before its 33K factory workers — who've been on strike for five weeks — voted against its new contract proposal.
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- Initial jobless claims
- New-home sales
- Earnings expected from American Airlines, UPS, Southwest Airlines, Nasdaq, Boston Beer, Harley-Davidson, Honeywell, Union Pacific, Dow, Hasbro, Northrop Grumman, Ryder, Valero Energy, Skechers, and Capital One Financial
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Authors of this Snacks own shares of Apple |
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Advertiser's disclosures:
1 Source: S&P Global Indices for market cap as of Sept. 23, 2024. Past performance is no guarantee of future results.
Visit www.iShares.com to view a prospectus, which includes investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Investing involves risk, including possible loss of principal. Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and the general securities market. The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock"). The iShares Funds are not sponsored, endorsed, issued, sold or promoted by S&P Dow Jones Indices LLC, nor does this company make any representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with S&P Dow Jones Indices LLC. BLACKROCK and iSHARES are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners. iCRMH1024U/S- 3970697 |
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