1. Lyft & Uber Shares Nosedive
Last Friday, Uber went public on the New York Stock Exchange, debuting as one of the biggest IPOs ever. In response, Uber Technologies Inc shares fell as much as 10% today, doubling its losses. Uber is now valued $12B less since Friday, even after lowering its valuation expectations twice in two months to address investor concerns over the company’s mounting losses. Lyft’s IPO also took a nosedive, hitting a record low. Lyft shares were trading around $51 on Friday morning, about 30% below the IPO price. Wedbush analyst Ygal Arounian says investors need to be patient as Uber reaches full monetization potential. “While it will take time for the stock to settle and Uber must execute flawlessly over the coming 12 to 18 months, we believe a $100B+ market cap is warranted,” Arounian said.
2. Kids Bullied over Video Game ‘Defaults’
Missouri Senator Josh Hawley recently announced plans to introduce legislation to ban video games from offering microtransactions such as “loot boxes” or any type of virtual rewards that are only available upon payment. The bill would apply to those under 18 and would impact some of the biggest games like Fortnite and Candy Crush. A standard character in a game like Fortnite is referred to as a “default”, meaning the user hasn’t paid for any virtual clothing, which has stemmed in the younger generation to mean that the user is a lesser player, forming a social hierarchy in the online and offline world. Paul Towler, an English middle school professor, says “On more than one occasion I [hear] the kids refer to one another as a ‘default.’ At one point they started to use it just as a generic insult both in and out of the classroom.” According to the Pew Research Center, “24% of teens whose household income is less than $30K a year say they have been the target of physical threats online, compared with 12% whose annual household income is $75K or more.” Video game companies say these features help pay for the free games they offer, but opponents say this practice is exploitative, promoting compulsive behavior in children. What do you believe?
(Source: Polygon, CNN Business)
3. Walmart Raises Tobacco Age to 21
Walmart announced last week that they are raising the minimum age of a tobacco buyer to 21 in all of its Walmart and Sam’s Club stores. They also plan to discontinue sales of fruit-flavored vaping products. This news comes after Walmart received a letter from the FDA on April 5 concerning the matter. With the rising popularity of e-cigs and vaping among teens, many retailers including Walgreens, Rite Aid, and CVS have restricted tobacco sales to those under 21 or have done away with e-cig products altogether. The FDA sent 15 other letters to retailers to respond to the “vaping youth epidemic.” Walmart plans to use virtual reality to implement its age-verification plan. How? They will train associates to master the appropriate responses in a wide variety of VR-produced scenarios, according to their response letter to the FDA. They will also use “secret shopper” checks to make sure employees are following through with protocol.