Today's Topics
3 charts today exploring:
- How the Kardashian family can help, or hurt, the share prices of companies with their enormous social media influence.
- The latest US unemployment data, and what it means.
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The Kardashians. The family name alone may have caused a small reaction – positive or negative – in you. But you don't need to have watched every episode of Keeping Up With the Kardashians to recognise they have serious star power when it comes to brand deals.
In June alone; the WSJ reported that Kim Kardashian was getting a podcast on Spotify, Kanye (married to Kim) signed a 10-year deal with GAP and Kim sold 20% of her beauty company to Coty, Inc for $200m.
While it's hard to perfectly attribute share price moves to one exact thing we analysed the share prices of those companies on the days around the deal announcements (data from Koyfin). The Kardashian endorsements and deals quite literally added hundreds of millions of dollars to each company's market value, with share prices rising 10-20% in some cases.
One tweet, $1.3bn gone
While Kim & Kanye may have been on a deal-spree in June, another member of the Kardashian family, Kylie, has been moving markets for a while. On Feb 21st, 2018 she tweeted these 18 words: "sooo does anyone else not open Snapchat anymore? Or is it just me... ugh this is so sad". The next day Snapchat stock closed down 6%, wiping ~$1.3bn of value from it, as analysts desperately tried to work out whether Snapchat's user base was about to take a serious hit.
The chart above is a bit of fun – but there's a non-trivial point underpinning it. Take retail as an industry. Physical retailers pay rent for good locations, expecting footfall to come their way. That rent payment is actually part of their customer acquisition cost.
In the digital world businesses don't pay rent in the traditional sense, but customer acquisition still isn't free. Getting your products in front of the right people online is essentially paying temporary rent – and Facebook, Instagram & Google have the biggest malls in town.
But the Kardashians don't even pay this 'digital rent' anymore, because they can reach tens of millions of people with one tweet or photo. Of the top 20 most followed Instagram accounts, 5 are from the same family - and no it's not the Obama's.
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When you can reach 100m+ people for free on a daily basis, selling any product with a half decent gross margin will make you very rich. Strangely though, just as most of the world's super rich are trying to hide the fact that they are billionaires, the Kardashian family is embracing it. Kanye congratulated Kim for supposedly becoming a billionaire, and Kylie was even found to be inflating the actual success of her business to try and join the 3 comma club (absurd clip from Silicon Valley).
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The latest unemployment numbers are out from the US - and they look pretty good. The unemployment rate fell again in June, now down to 11.1%, from the peak of 14.7% back in April. That's great news, and suggests that economic recoveries around the world might indeed follow that V-shape that everyone is hoping for.
One thing to note is that we're looking at net unemployment here. Every month some people lose their job and some people get a job, what we're plotting here is that net number - which has improved.
That said, fivethirtyeight make a great point that actually if you look at just one side of the employment equation – jobs lost – it doesn't paint quite as rosy a picture. More than 21% of the jobs lost are being classed as permanent in June, whereas only 11% were classed as permanent losses back in April. When the dust settles – perhaps in a few months – we should have a clearer picture of just how many job losses were temporary or permanent.
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Data Snacks
1) More than 500 companies have now reportedly joined the Facebook advertising boycott. CEO Mark Zuckerberg has said he thinks the advertisers will "be back soon enough".
2) Researchers have estimated that the fastest growing ultramassive black hole (actual technical term) weighs more than 34 billion times our Sun.
3) Mobile-based insurance company Lemonade made a splash on its IPO, with shares rising 140% on their first day of trading.
4) Hamilton is arriving on streaming service Disney+, pushing the hit Broadway musical over the $1bn revenue mark, with >80% from actual live performance sales. Watch the trailer here.
5) Evidence from the German Bundesliga suggests the importance of home-field advantage is huge. Home teams with a full stadium of fans scored an average of 1.74 goals per game, vs. 1.43 per game without fans.
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Happy July 4th to all our American readers!
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