All Killer, No Triller

Big news in the TikTok world. Charli D’Amelio, one of the biggest stars on TikTok, joined rival app Triller. Depending on how you react to that sentence... probably says a lot about how much time you spend on TikTok.

So for the less TikTok literate, let's break it down:

  • Charli D’Amelio is the most popular creator on TikTok with over 87 million followers
  • Triller is a US based rival to Chinese based TikTok
Zoom out: As the future of TikTok in the US remains in limbo, rival apps, such as Instagram Reels and Triller, are attempting to stake their territory.

Platforms have realized that the quality of talent and content is as important as the functionality of the app itself. That's why Triller has been actively recruiting big name TikTokers to join their platform.

But will it work? Triller can sign all the talent they want but unless they can build as addictive an algorithm as TikTok's, it's hard to take them seriously.

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Snow in September

IPOs... so hot right now. Yesterday, buzzy tech startup Snowflake debuted on the NYSE and it was a smash!

What's Snowflake? The startup provides cloud data management solutions for enterprise businesses (zzzzz). Boring but...

How did the IPO go? It was a HUGE success. The IPO was one of the most successful software public offerings in history! Did you buy? We hope so because the stock jumped over 160% on the first day of trading.

At the market close, the company's valuation hit $90bil, nearly seven times its last private market valuation of $12.4bil.

But, how... Snowflake is in a lucrative space:

  • The market is huge. Lots of businesses need data stored and analyzed. Amazon Web Services and Oracle are examples of two highly profitable and rapidly growing businesses in the space. And experts claim that Snowflake's technology might be even better than its predecessors.
  • They're growing QUICK. Although still not profitable, Snowflake's revenue from Jan-July 2020 was $242 million which is more than double the same period the year before.
  • FOMO. Snowflake got a little help from their friends. Two of their anchor investors, Warren Buffet's Berkshire Hathaway and Salesforce Ventures, signaled to the market that Snowflake is the real deal. This created major FOMO among investors.
But the IPO fun doesn't end there. Outspoken investor Chamath Palihapitiya announced his plans to take US real estate startup Opendoor public through one of his SPACs (special purpose acquisition companies).

With the market hot, expect even more IPOs to come out of the woodwork over the next few months.
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COVID-19 Updates from Across the Country

With cases across the country rising, the single most important issue for the health of the Canadian economy is how well we react to a second wave of COVID. Here's the latest:

Ontario: In response to a recent high of 315 cases in one day, Premier Ford and the Government of Ontario are looking to impose a new round of gathering restrictions. It is expected that the guidelines will lower the limit on social gatherings. The current limit is 50 people indoors and 100 people outdoors.

Atlantic Canada: The Atlantic provinces have imposed a regional bubble which forces Canadians traveling from outside the region to quarantine for 14 days. Although controversial, the bubble has been effective and total number of cases remain below 100.

Quebec: La Belle Province is in the midst of a second wave with over 300 new cases daily. The Province is keeping an eye on the surge and they have committed to imposing new restrictions on specific regions if cases grow.

Alberta: Wildrose Country has seen steady growth in cases partially due to outbreaks in reopened schools. Six Alberta schools have had outbreaks of two to four cases.

British Columbia: In BC, the number of patients hospitalized rose to the highest in four months as the province announced an additional 97 new cases. Mask wearing, except on transit, remains voluntary.
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The Revolution is Not a Camping Trip

On Monday, Mountain Equipment Co-Op (MEC) announced that the board had approved the sale of the outdoor equipment retailer to US private equity fund, Kingswood Capital Management LP. According to the board, the sale was necessary to save the struggling retailer from going under.

Not so fast...

What about the members? Anyone who's shopped at MEC knows that you have to be a member to make a purchase. MEC embraced the member's co-op model and built loyal following among long time customers who appreciated having a voice in the company.

So as you can imagine... the membership wasn't too pleased to hear that the company was being sold without their consultation.

Viva La Revolution: As a show of defiance, MEC members launched a petition to stop the sale. In less than 72 hours, the petition received over 33,000 signatures.

Will this change anything? Probably not. Under MEC's co-op model, your $5 membership purchased you a share in the company and the right to vote for board members. In good times, the company's leadership would use profit to buyback shares from members in the form of gift cards.

But now that the organization is in creditor protection, member's shares are worthless until creditors get paid and no petition can change that. So unless something drastic happens, this acquisition is going to go through.
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Market Updates

  • Recovery: Trudeau released details on $19 billion in spending to help province's safely reopen their economies.
  • Interest Rates: The Federal Reserve released outlook that interest rates are likely to stay near zero through 2023.
  • Inflation: Canada's inflation stalled again in August as the country's economy struggles to recover from COVID-19
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Peak Picks

  • One job that hasn't been impacted by COVID: unwitting criminal accomplice. People desperate for work are taking jobs from sketchy "companies" only to discover they are helping do crimes, and listings for these "jobs" are up almost 300%.
  • Halloween is coming up, and Trick or Treating may be cancelled but that doesn't mean you can't get a costume. How about The Karen? Now that's scary...
  • Looking for something to watch tonight? Here's the most popular Netflix Original in every country. No surprise that Stranger Things take the top spot in Canada. But "Memories of the Alhambra" is absolutely huge in Bhutan.

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Leftovers

  • Seeing Green: Canada's largest cannabis company is facing a $500m lawsuit from a former joint venture partner who alleges the producer breached purchase agreements after expected demand for legal cannabis failed to materialize.
  • Surgical Strike: Canada's Health Minister said any future lockdowns will be more "surgical" and that a full-scale lockdown like we had in the spring is unlikely.
  • On Thin Ice: An $825m class action lawsuit has been filed against the NHL and junior hockey leagues alleging they conspire to exploit teenage hockey players with one-sided contracts and restrictions on their careers.

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Fitness At Home

Trend alert: more people than ever are stuck at home, and they're looking for ways to stay (or maybe get in) shape and monitor their health. At least that's what companies like Apple are betting on as they roll out a range of new products tailor-made for the COVID era.

What's new: Apple unveiled its new smartwatch which includes some new fitness and health features, including the ability to measure blood oxygen levels, skin temperature, and breathing rate..

The company also announced a new streaming fitness service called Fitness+ that will offer virtual workout classes on iPhones or TV for $9.99 /month.

Who else is in the market: 

  • Oura, which makes a "smart ring" that allows users to monitors various vitals and tracks sleep, just signed a partnership with UFC. The company already has deals with the NBA and WNBA.
  • Peloton is now competing directly with Apple in the streaming fitness class space.
  • Back in July Lululemon purchased Mirror, a company that sells in-home fitness hardware and subscription fitness streaming classes and personal training.
The COVID Effect: As cases spike again, gyms and fitness centres are likely to be some of the first facilities to be shut down again should more restrictions be implemented. This could give the virtual fitness space a major boost in the coming months.
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The Fate of TikTok

Big updates this week in the ongoing saga to save TikTok in America. As we reported on Monday, Oracle has emerged as the favourite American bidder on TikTok. But a clearer picture of the deal in the works is emerging — here's the latest: 

  • TikTok's China-based owner, ByteDance, has proposed spinning off TikTok into a new corporation headquartered in the U.S. 
  • ByteDance will retain majority ownership over the new corp, while U.S-based Oracle will take a minority stake. 
  • Insiders say ByteDance will operate at "arm's-length" from TikTok
The big question now: will the Trump administration agree to the plan?

That remains to be seen. Treasury Secretary Steve Mnuchin made positive comments about it and some are suggesting approval is imminent, and there are other reasons to think the deal will go through: 
  • TikTok has promised to create 20,000 jobs in the U.S. if the deal is approved.
  • Oracle was co-founded by Larry Ellison and is headed by Safra Catz, two of the few pro-Trump execs in Silicon Valley.
  • China apparently supports the plan too.
But remember: Trump initially demanded a full sale of TikTok to an American company. And this deal looks a lot like Microsoft's initial proposal which Trump rejected. 

In any case, we should know the fate of TikTok by this time next week.
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The Next Theranos?

Nikola was one of the hottest stocks of the summer. The electric truck maker's valuation skyrocketed to nearly $20bn after being publicly listed in June despite never having shipped a vehicle.

But that changed late last week when short seller Hindenburg Research issued a report alleging Nikola is nothing more than an "intricate fraud" out to siphon cash from naive investors to insiders, sending the stock into a 20% decline over the past few days.

Now the Justice Department and U.S. Securities Regulators are getting involved, putting Nikola and the allegations against it under a microscope.

What the short sellers say: 

  • Hindenberg alleges Nikola does not have a working product or revenue and has faked demo videos to juice investor interest.
  • They claim Nikola has misled investors about its assets and technology.
  • And they report that the CEO and other insiders have spent the summer cashing out their shares before the ship goes down.
What Nikola says: 
  • They are the next Tesla and the share price is justified by expected future profits. 
  • That Hindenburg is just looking to crash the stock in order to make a buck through their short positions. 
What matters: The market is going to determine the fate of Nikola now. And that may not be bad for Nikola. Retail trading and a "buy the dip" mania has boosted plenty of conventionally unattractive stocks over the past several months (remember how Hertz's stock rose 95% in the weeks after it declared bankruptcy?). 
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