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| Hey Insiders, There's a ton happening on Wednesday, including Shutterstock broadening its OpenAI partnership, a U.S. judge rejecting FTC's Microsoft-Activision merger block, and National Trust for Local News acquiring 22 newspapers. Plus, we look at Domino's, the world's largest pizza company, deal with Uber and aim to increase new sales by $1B via this partnership. Remember to send us your suggestions for future newsletter topics.
Shriram
p/Shriram | |
| 1 | | Shutterstock will provide training data for AI models as part of expanding its partnership with OpenAI. The collaboration strengthens Shutterstock's commitment to developing AI innovation and gives them priority access to OpenAI's most recent technology. More: - Stock galleries and generative AI startups have had a tense relationship due to concerns about copyright and compensation.
- Shutterstock has adopted generative AI and collaborated with OpenAI to introduce a DALL-E 2 image maker.
- Shutterstock runs a contributor fund to pay artists for their time spent helping to train generative AI models.
- After the firm announced an expanded, six-year relationship with ChatGPT-maker OpenAI on Tuesday, shares of Shutterstock surged 8%.
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What the numbers say: Domino's leads in pizza chain sales with 30.8% of the market, followed by Little Caesars, Papa John's, and Pizza Hut. After the epidemic, delivery via Uber, DoorDash, and other third-party applications soared, accounting for 14% of pizza sales in the year ended May (up from 4% before the pandemic), with sales totaling $4.7B, according to Circana. Domino's Chief Executive Russell Weiner stated that by adding its menus to Uber's applications, Domino's hopes to create $1B in additional sales. Relevance: Domino's Pizza, previously opposed to partnering with food-delivery companies, has now struck a deal with Uber Technologies to make its menus available on Uber Eats as delivery apps continue to thrive amidst lockdowns and growing demand for delivery. Also, In April 2023, Domino's reported a 2% decrease in same-store U.S. delivery sales over the same period last year. Pizza Hut and Papa John's International, rivals of Domino's, have previously negotiated contracts with food delivery services. More data: After the COVID-19 outbreak struck, slice businesses profited from increased orders as individuals sought refuge at home, but their sales rise is now slowing. Sales for pizza chains totaled $29.7B in 2022, an increase of 2% from 2021, according to Technomic. Until the end of the year, Uber will advertise Domino's menu in 14,000 eateries, or around 70% of the chain's locations, as part of a partnership that may also apply to other applications. NOTE: Inside.com founder and CEO Jason Calacanis is an investor in Uber. | | | |
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| 3 | | A U.S. federal judge has rejected the Federal Trade Commission's bid to halt Microsoft's $75B acquisition of Activision Blizzard. The judge states that the FTC failed to show evidence that the merger would negatively impact competition in the video game library subscription and cloud gaming sectors. More: - Since Microsoft's bid announcement in January 2022, Activision's shares have increased by almost 11%, reaching $92, nearing the offer price of $95 per share.
- The decision dealt the high-profile antitrust lawsuit filed by the FTC under the Biden administration a blow.
- The Competition and Markets Authority (CMA) has agreed to a delay of the U.K. litigation and is prepared to hear Microsoft's suggestions to modify the agreement to address its concerns.
- The vice-chair and president of Microsoft said they thank California for its judgment and say their attention now shifts back to the issues raised by the CMA.
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| 4 | | The National Trust for Local News, a nonprofit, will purchase 22 newspapers in Maine, including The Portland Press Herald and The Sun Journal of Lewiston, from Masthead Maine, owned by Reade Brower. The sale, which includes five daily papers and 17 weeklies, is set to be finalized by the end of July, with the exact price remaining undisclosed. More: - The acquisition intends to support independent, nonpartisan local media in Maine while preserving local ownership.
- Through a partnership with The Colorado Sun, The National Trust for Local News owns 24 neighborhood publications throughout Colorado.
- With funding from the Gates Family Foundation, the Google News Initiative, and the Knight Foundation, the Denver-based nonprofit news organization has arisen to address the local news crisis.
- The News Guild of Maine, the union for almost 200 of the publications' employees, expressed appreciation for the acquisition's nonprofit business model instead of its sale to hedge funders or private equity groups.
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| 5 | | A sizable fine of $476M (€432M) has been levied against Illumina by EU regulators for completing its acquisition of Grail without receiving regulatory approval. Illumina wants to challenge the European Commission's judgment, stating that it is absurd and unreasonable and that the record-breaking fine, equal to 10% of Illumina's global sales, is inappropriate. More: - Illumina has already set aside $453M to cover potential maximum penalties.
- Since the Grail transaction was completed, the company's market worth has decreased from $75B to $29B.
- Illumina will sell out Grail if the appeal is unsuccessful, but it thinks it can increase the accessibility and financial viability of Grail's Galleri test.
- Illumina is currently finding a new CEO and implementing a cost-cutting plan to address the company's declining operating margins.
Zoom Out: - In June, CEO Francis deSouza abruptly resigned despite surviving the proxy vote.
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| 6 | | The wine market, once booming with rising prices and attracting investors, is now experiencing a significant decline in prices, hindering the entry of new investors. The accessibility of online platforms and advisories has lowered the barriers to entry, making it easier for individuals to invest in wine, but recent data shows a decline in fine wine prices, with a 0.83% drop in June and a 2.13% decrease so far this year. More: - The Liv-Ex investables index shows that fine wine has experienced a 10% compound annual growth rate over the past three decades, explaining the recent rise in wine investments.
- The decline in Chinese investment and the effects of exchange rate fluctuations on Bordeaux were the leading causes of the Cult Wines Bordeaux Index's 1.22% monthly decline and over 2% YoY decline.
- Cult Wines' 2022 gross sales revenue surged by 32%, surpassing $116M, with a 45% increase in managed fine wine assets currently valued at $375M.
- SVB's premium wine division lent over $4B to 400 winery clients but had $1.2B in outstanding loans when the bank collapsed.
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- Bank of America (BAC) has been ordered by the Consumer Financial Protection Bureau to pay over $100M to customers, along with $90M in penalties, and has also been fined $60M by the Office of the Comptroller of the Currency.
- Farmers Insurance will stop selling its house, auto, and umbrella policies in Florida due to the state's high hurricane risk, forcing many people to find new insurance companies.
- Blue Origin, the space company owned by Jeff Bezos, had a setback when its BE-4 rocket engine experienced an explosion during testing, which has potential consequences for its customers and their projects.
- The $61B acquisition of VMware by Broadcom is anticipated to be approved by the EU after Broadcom agreed to a number of behavioral remedies.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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