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| Hello Insiders!! Today's Business newsletter covers: - 📦 Amazon plans to add "Buy Again" feature
- 🔍 Deep Dive: Lucid's $338K loss per car hurts stock
- ✈️ Delta Q3 profit up 60% on travel rebound
If you enjoy reading this newsletter, please share it with your friends and colleagues. Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | In its app, Amazon is experimenting with a "Buy Again" feature that can be found on the home page and uses order history to provide recommendations, particularly in categories like groceries and electronics. The goal is to promote repeat purchases and subscription-based ordering, such as "Subscribe & Save," to increase revenue from its current clientele. More: - Per data, consumers are placing fewer orders and growing their Amazon Prime memberships more slowly than in previous years.
- According to Consumer Intelligence Research Partner, Prime members' annual spending decreased on average from roughly $1,400 in 2018 to $1,100 in 2022.
- According to The Wall Street Journal, customers have recently expressed greater displeasure with their interactions with Amazon regarding ads and product quality.
- A researcher at Watchful Technologies stated, "Amazon might become more integrated into people's lives by highlighting the subscription service."
- Personalized recommendations on the "Buy Again" page and search-and-filter options could both be included in the updated Amazon app.
Zoom Out: - In 2022, Amazon introduced a new app feature called "Inspire," which offers customers a TikTok-style feed of shoppable products featuring content created by contributors.
Q: Do you think Amazon's push for repeat purchases and subscription-based ordering is a smart business strategy? Join the conversation here. |     | |
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What the numbers say: Lucid Group's stock has fallen by nearly 25% this year, while Rivian Automotive experienced only a 1% drop. According to Bloomberg Intelligence, analysts predict that Lucid will lose $338,000 per vehicle produced this year, while Rivian's expected loss per vehicle is approximately $110,000. The sales forecast for Lucid for 2023 has decreased over the last six months by about 50%. Relevance: The EV market is getting more capital-intensive and competitive. Lucid and Rivian have had well-funded investors, but they still face difficulties in a market where loan rates are rising and money is becoming scarcer. More data: Since going public in 2021, Lucid and Rivian's stock price has dropped. In contrast to Rivian, whose sales have continuously increased this year, Lucid is having trouble growing its sales; it estimates that 2,100 cars were sold in the third quarter. According to Bloomberg Intelligence, Lucid has a default risk of 16%, nearly four times higher than the median for auto manufacturers. Both businesses are vying for a foothold in a market dominated by Tesla, with Rivian aiming for a higher market share and Lucid focusing on luxury and lower volumes. | | | |
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| 3 | | Delta Air Lines announced a nearly 60% profit increase for the third quarter, driven by robust international travel demand. However, the business revised its full-year earnings expectation owing to increased fuel prices to $6 to $6.25 per share (down from $6 to $7) and its estimated free cash flow to $2B (down from $3B). More: - Q3 adjusted earnings per share were $2.03, exceeding expectations, and adjusted revenue reached $14.55B, slightly below the expected $14.56B.
- In the fourth quarter, Delta predicts strong demand for travel and revenue growth of 9% to 12% over the corresponding period in 2022.
- From $695M, or $1.08 per share, in the prior year, net income for the period climbed by 59% to $1.11B, or $1.72 per share.
- CEO Ed Bastian highlighted that business travel has recovered to over 80% of 2019 levels and that there was strong demand for premium seats, such as those in business class and premium economy.
- Transatlantic flights, in particular, experienced strong revenue growth in the third quarter, with a 34% increase in revenue for these routes.
Zoom Out: - Delta faced backlash after announcing changes to make elite frequent flyer status harder to attain and reducing access to its crowded airport lounges in response to long entry lines.
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| 4 | | Stellantis and Samsung SDI are injecting more than $3.2B into a new electric vehicle battery facility in Kokomo, Indiana, marking Stellantis' sixth global battery plant. The announcement coincides with ongoing labor strikes and contract discussions between Stellantis and the United Auto Workers (UAW) union. More: - The UAW successfully included GM's EV battery facility employees in its national contract because it saw EV battery jobs as essential for long-term sustainability.
- Shawn Fain, president of the UAW, anticipates Stellantis and Ford to follow suit and include employees of battery plants in future contract agreements.
- The new Kokomo battery plant is a component of Stellantis' intention to manufacture EV models like electric Ram pickup trucks and Dodge muscle cars.
- The two battery operations in Kokomo, which will provide 2,800 new jobs, are run by StarPlus Energy, a partnership between Stellantis and Samsung SDI.
- While the second factory is anticipated to start making battery cells in early 2027, the first plant, a $2.5B facility, is currently under development and scheduled to start producing in early 2025.
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| 6 | | Major South Korean chipmakers Samsung Electronics and SK Hynix will be able to provide U.S. chip equipment to their operations in China indefinitely without additional U.S. permits. The waiver that the U.S. previously granted to these chipmakers, which does away with the requirement for licenses to import U.S. chip equipment into China, is now being extended. More: - This strategic choice reduces the uncertainty around South Korean semiconductor companies' operations and investments in China, allowing them to pursue long-term global management strategies.
- The U.S. Department of Commerce is amending its "validated end user" list to allow Samsung and SK Hynix to continue providing their Chinese plants with specific U.S. chipmaking gear.
- Once on this list, export permissions are not required separately.
- While SK Hynix makes 20% of its NAND flash chips in Dalian and about 40% of its DRAM chips in Wuxi, Samsung manufactures about 40% of its NAND flash chips in Xian, China.
- As of the end of June, according to TrendForce statistics, these businesses collectively possessed a sizeable market share, dominating nearly 70% of the worldwide DRAM market and 50% of the NAND flash industry.
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- Shares of EV charging network operator ChargePoint Holdings tumbled more than 15% as the company announced it would raise $232M through stock sales.
- Disney World and Disneyland have raised their prices, including parking fees, and will reintroduce all-day "Park Hopper" access starting in January.
- Illumina has been instructed by the European Union's competition watchdog to reverse its $7.1B acquisition of cancer-test developer Grail and provide a clear divestment plan, per the European Commission's decision.
- A coalition of period care brands, including August, Cora, LOLA, and others, is reimbursing consumers for state sales tax paid on menstrual products in the U.S., where 21 states tax these items at standard rates.
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | 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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