Hey there!

Who else is in disbelief that it’s already May? It’s really feeling like we’re in a bizarre, unfit-for-TV episode of The Twilight Zone these days.

On to the news: There’s a lot to cover in today’s ECF News Cart. From Amazon under fire for allegedly misleading Congress to major layoffs at Airbnb, there is a lot going on in the industry right now.

It was a big week for Shopify who, along with its merchants, saw very strong growth amid COVID-19. It also released a new mobile app last week dubbed ‘Shop’, which has the potential to be a major destination for shoppers going forward.

Enjoy the headlines below!

– Andrew

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In the News

Shopify Launches New Mobile Shopping App Dubbed ‘Shop’

  • Allows people to browse, get customized recommendations and explore products from local merchants
  • Designed to be an advertising-free experience

Shopify Announces Strong Q1 Financial Results

  • Newly created stores surged 62% from Mar 13 – April 24 compared to the prior six week period
  • Over 94% of lost point-of-sale revenue was recovered by merchants pivoting online
  • Shopify stock has more than doubled since April 1

House Judiciary Committee asks Jeff Bezos to testify about whether Amazon misled Congress

  • Democratic leaders suspect Amazon of lying to Congress regarding its private label strategy
  • “If the reporting in the Wall Street Journal article is accurate, then statements Amazon made to the Committee about the company’s business practices appear to be misleading, and possibly criminally false or perjurious,”

Amazon reports earnings, plans to spend all Q2 profits on coronavirus response

  • Amazon stock fell 5% after missing estimates on earning despite beating revenue expectations
  • Plans to spend estimated Q2 profit, close to $4 billion, on COVID-19 response including testing and delivery infrastructure

Alphabet stock rises more than 7% as ad slowdown turns out to be less than feared

  • Ad revenues slowed in March and some ad launches were delayed as a result of COVID-19, according to Alphabet CEO Sundar Pichai
  • Expedia Group and Booking Holdings anticipate cutting Google ad spending this year by 80%

Google confirms May 2020 core algorithm update (Hat tip to JPJi)

  • Core updates focus on re-assessing content to prioritize more relevant, timely results
  • Google reports there have never been as many searches for a single topic over a certain period as there is for “COVID-19”

Small business loans above $2 million will get full audit to make sure they’re valid, Mnuchin says

  • The government will audit any company taking out more than $2 million from the small business loan program according to Treasury Secretary Steven Mnuchin
  • 220+ public companies applied for at least $870 million from the program, according to FactSquared
  • Further gov. guidance claims “…applicants needed to exhaust other avenues of liquidity that would enable them to support ongoing operations”

Kickstarter plans layoffs after new projects on the site drop off by 35 percent

  • Kickstarter has seen a 35% drop in crowdfunding projected posted to the site
  • Union organizers are discussing “potential layoffs” with company leadership

Federal Reserve to Launch Main Street Lending Program

  • First time Federal Reserve will lend directly to non-financial institutions since the Great Depression
  • Goal to lend $600 billion to companies who face good odd of survival with financing
  • More broad sweeping than the PPP, companies with up to 15,000 employees are eligible

Airbnb cuts 1,900 jobs, 25% of the company’s workforce

  • Airbnb reports it was allocating $250 million to help offset host losses
  • The company suspended marketing in March to save $800 million in 2020

J.Crew has filed for bankruptcy

  • First major retailer to file for bankruptcy since COVID-19 outbreak
  • The company had filed for an IPO in September 2019

The iconic brands that could disappear because of coronavirus

  • More than 100,000 stores could close up for good by the end of 2025 according to UBS
  • Neiman Marcus, Macy’s, Belk, J.C. Penney and Gap among companies discussed

People are Panic-Buying Meat, Toilet Paper…and Pelotons?

  • Peloton’s stock has skyrocketed by 95% since March and its revenue increased by 66% in the first three months of 2020
  • 1.1 million people signed up for Peloton’s digital-only free trials in March and April

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