AmEx ($AXP) reported Q3. Bellweather for consumption & travel
• TOTAL spend volume passed 2019
• Global Travel & Entrtnmnt still off (will hit 80% of 2019 in Q4)
• Loan balances keep paying down (people reducing debt)
• Gen Z & Millnls biz up huge
• Perfmnc marketing💪
1/x
Look at Millnnils & GenZ. 70% of new platinum adds in this demo.👇
Part of this is aging into the product.
But also performance marketing combined w/ rewards positioning of AmEx cards. AmEx has unmatched travel & "experience" rewards + superior online/digital self-service.
2/x
Large & Global Corp spending - which is heavily influenced by business travel (and meals, client-facing events, etc.) - still down massively.
W/r/t travel:
- US is 80%+ of 2019
- Int'l still down by 50%
AmEx is becoming more and more of a consumer & SMB spend product.
3/x
Lest people think consumers and SMBs don't want cards - much less premium AmEx cards - its membership fees and cards issued continue to grow nicely.
Philosophically, AmEx uses membership fees to reinvest *heavily* in rewards & differentiation: scale economics shared...
4/x
...& AmEx is using its strong performance to return HUGE capital to owners (supported by releasing credit reserves that built up in 2020).
Management exudes confidence about the future (assuming a sanguine macro-environment), driven by huge success on customer acquisition.
End
Side Note re: BNPL
Not yet a substantial competitor (as generally used). BNPL tends to be down-market & a customer acquisition tool. AmEx has BNPL built into its cards that is more flexible ("accepted" everywhere AmEx is accepted) & has substantial rewards benefits.
Monitoring.
Believe FinTech SMB platforms like Brex & Ramp are worth watching. Bought @KabbageInc (competes in this space). AmEx notes SMB +13% on the Q.
Combined w/ very strong:
• Brand
• Balance sheet
• 3 million SME cardholders
• Digital investments
...in good shape but more to do.
• • •
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Mrs. B founded Nebraska Furniture Mart in 1937 with $500 of savings, selling 90% to Warren Buffett’s $BRK 50 years later for $55 million.
Even at 94-years old, she continued to work 70 hour weeks, pricing rugs and carpets from memory. 🧵👇
“We like managers who are in love with their business…who feel like I do - I want to tap dance when I get to the office,” is how Buffett answered Adam Smith’s question about the Berkshire Hathaway culture. 1/x
Mrs B barely spoke English when she started NFM; she sought a $75 business loan and was denied.
50 years later, what did she think of the doubters?
“I still hate them. Anybody who does you dirty, you should never forgive and forget.” ☠️
- Rose Blumkin at 94 years young
Mrs. B had uncommon sense:
“God blessed me: anything I do, I make money.”
Mrs. B’s daughter on growing up:
“The customer was God - that came first and we came next,” she laughingly shared.
Most people assume it makes its money as a crypto exchange.
True...sort of.
Its rev comes as much from interest income on its cash balances + its share of $USDC's cash ($COIN owns a share of USDC owner, Circle) as from transactions.
Worrisome.
🧵👇
2. Interest Income is Lower Quality
Even as $COIN's core transaction revenue has declined by nearly HALF, its interest income has skyrocketed with rising rates.
In Q2 2022, interest was 5% of revenue; in Q2 2023, it was 35%...
3. Stablecoin Revenue
...in Q3, interest income hit nearly 40% !!! of revenue.
(With $COIN restructuring its deal with Circle, Coinbase's share of $USDC interest income is now categorized as "Stablecoin Revenue.")
I expect $COIN just achieved peak interest income.
Today, Enovix, a science project battery company, posted a long letter trying to stop a reporter from investigating it. The letter culminates by calling me "ringleader" of a short group that coordinates trades.
False.
One might ask, "why is $ENVX so afraid of inspection?"
🧵👇
2/ There really are some $ENVX "ringleaders" on Twitter, but they are insanely bullish. They're also bullies: Marc Cohodes and Greg Reyes. They lie, distort, attack, and malign anyone who questions Enovix.
They claim to have a special relationship with ENVX Chairman, TJ Rodgers.
3/ As we will see, these are odd bedfellows.
Both are cruel, manipulative, and bullying. They constantly allude to having the inside skinny on Enovix while pumping it to their legions of followers.
They coordinate and attack all skeptics and do so in retrogressive ways.
The @SECGov crypto enforcement team has been busy af...
...today it sued $COIN, after suing Binance and @cz_binance yesterday.
Gary, I can only summarize lawsuits so fast...
Let's dig in.
🧵👇
1. The Dog that Didn't Bark
As you can see in the below image, in yesterday's Binance suit, Binance founder @cz_binance himself was listed as a formal defendant in the SEC complaint.
In the $COIN lawsuit, no individual is included.
Coinbase CEO Brian Armstrong just exhaled...
2. This suit is less "sexy" than the @binance suit (linked at the end of this thread).
While Binance and FTX looked like companies that lacked controls and were run haphazardly, the Coinbase suit is more about the technicalities of "registering" and "what is a Security?"