Aquifer Tech Snapshot | Stock Market Madness and Mulan | Aug 31 - Sept 4
After a huge market sell-off last Thursday leading to a 5.8% drop in the S&P 500, 4 of the richest people in the U.S. have lost a collective $25B in net worth. Jeff Bezos (Amazon CEO) lost $9B, Elon Musk (Tesla CEO) lost $9B, Mark Zuckerberg (Facebook CEO) lost $4B, and Bill Gates (former Microsoft CEO) lost $3B.
SoftBank was identified as the “Nasdaq whale” that bought billions in stock options last month, which increased the stock volume and led to madness in the stock market. Until now, SoftBank (through its $100B Vision Fund) made large investments in privately held tech start ups. These huge buying volumes of stock options is new territory for the Japanese investment firm. Softbank has shown to have been trading stocks of the key tech drivers of the stock market: Amazon, Apple, Microsoft, Facebook, and Google (with the 5 combined equal to a quarter of the S&P 500).
Traders noticed something unusual. Traders have subsequently been monitoring the VIX (CBOE’s volatility index) which is calculated based on trading in puts and calls on the S&P 500. Prior to the stock market frenzy, the price of stocks were steadily increasing, as was the VIX. However, the VIX usually rises as stock prices decrease. The frenzy caused by SoftBank’s voluminous stock options buying may have led to this new phenomenon.
Viewers were looking forward to Disney’s live action remake of their classic 1998 version of Mulan, which was to be released in March 2020. Due to COVID-19 directly impacting the entertainment industry, the movie was pulled from theatres, but is now available for streaming on Disney’s streaming platform Disney+. But, you’ll need to pay a hefty $30 (roughly 3x the price you’d pay at a movie theatre).
The budget for live action Mulan was $200M, and Disney had to recoup the money given that movie theatres across the world had to close down, even at a hefty price tag of $30. However, once users purchase the Disney+-exclusive Mulan, it will be in their library forever as long as they are an active subscriber (rather than content that continually comes and goes on other streaming platforms). One benefit for Disney+ is each dollar spent on Disney (and not at the movie theatre) is more money towards Disney that will allow it to continue creating valuable movies and content.
Besides the $30 price tag, there is another element surrounding this movie that may lead to less viewers, and this time it’s political. Yifei Liu, the main actress who plays Mulan in the live action, has shown her support of the Hong Kong police force over social media. Hong Kongers were fighting for a bill last year that would have allowed criminal extradition to mainland China (and seemingly give China more control over Hong Kong affairs), and led violent protests to fight for their demands, to which the Hong Kong police fought back. Yifei Liu’s support for the Hong Kong police seems to be a slap in the face to democracy and freedom of protest, which has led to the trending hashtag #BoycottMulan. With these two factors potentially hindering how much money Disney will make from Mulan, it could be possible Disney won’t be able to turn a profit for Mulan unless they have enough paying customers.
Apple will launch its long-anticipated 5G iPhone in October, as well as a new Apple Watch, iPad, and HomePad. The 5G technology will allow phones to access a wireless network that promises faster Internet speed and quicker response times. Apple may sell as many as 80 million units by the end of this year’s holiday season.
Indian food delivery startup Zomato raised $62M from Temasek, a state investment arm from Singapore. Despite the coronavirus outbreak, Zomato seems to have been raising more funds and scaling its business. In April, Zomato purchased Uber Eats (of India) from Uber.
Biofourmis is a digital therapeutics company that implements A.I. and wearable sensors to monitor the progress of drugs and medical treatments, and it has raised $100M from SoftBank Vision Fund 2. Their new round of funding will be used to validate and deliver new therapeutic solutions for cardiology, respiratory, oncology, and pain treatments.
China’s mixed reality startup Nreal raises $40M in a Series B round to develop more portable augmented headsets. Kuaishou, the archrival to Douyin (knows in the west as TikTok), led this funding round, securing the hardware partner necessary in making augmented reality content.
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Research contributed by Stephanie Heinsohn