May 12, 2023

Today's Topics

Hello! A man who’s devoted 32 years of his life to hunting the elusive Loch Ness Monster today recognized his naivety in the face of the mammoth undertaking, admitting “I did think this job was going to be easier”. Today we’re exploring:

  • Talk is cheap: Like everyone else, CEOs can't stop talking about AI.
  • Searching for connection: Loneliness is a growing problem.
  • Breaking the cycle: Peloton's core business ain't what it used to be, literally.
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Talk is cheap

Not ones to miss out on a hot trend, the management teams at America’s largest companies can’t stop talking about AI (e.g. Google).

Indeed, there were more than a thousand references to “AI” and related synonyms in the latest round of quarterly conference calls from S&P 500 companies (per Bloomberg data), as an ever-growing swathe of the world’s biggest businesses look to lay out how the tech will figure into future plans.

Talk is expensive

It’s fair to categorize most of the AI chatter as positive — with execs keen to explain why AI breakthroughs could be a great boon for their company. But attempts to address the issue of AI head-on haven’t always worked out, and some companies now appear to be facing an existential threat that, 6 months ago, wasn't even on their radar.

Chegg, for instance, saw a billion dollars of market cap evaporate overnight, as its share price was cut in half after the company raised concerns over how it would be impacted by AI. The edtech company, which tripled in value during the pandemic as students “chegged” their way through homework and online tests (paying to access Chegg’s wide database of millions of textbooks to get the answers), conceded last week that ChatGPT is “having an impact on our new customer growth rate”. Good luck to the teachers having to mark AI-written essays in the coming years.

Loneliness epidemic

Earlier this month, the Surgeon General — America’s “top doctor” —  Vivek Murthy, released an 81-page advisory report on the epidemic of loneliness and isolation, bringing attention to the concerning trend of social disconnection in America.

In a guest essay in the NYT, Murthy cites several studies that show how prolonged loneliness affects our physical and mental health negatively, reportedly akin to smoking up to 15 cigarettes a day, with higher risks of heart disease, stroke, anxiety, depression, and dementia.

While it's true that the percentage of Americans who report feeling lonely has fallen from the very peak of “pandemic loneliness”, the trend of increased disconnection arguably started years before lockdown. Indeed, the average time spent alone increased by 12 hours a month between 2003 and 2019, per the report.

Searching for friends

Although obviously not a perfect analysis, this trend can even be seen in data from Google, which shows a surge in searches for phrases like "where to make friends," "how to meet people," and "social groups near me”.

In battling this epidemic the SurgeonGeneral is calling for an improvement in "social infrastructure", such as sports teams, religious groups, libraries, and parks, where people can more easily connect. Maybe we should organize a meetup for chart-lovers?

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Breaking the cycle

Peloton shares fell almost 9% yesterday after the company announced it would be recalling 2.2 million bikes owing to a fault with the seat posts which sparked injury concerns for the company’s die-hard legion of fans.

That capped off a rough week, month, and few years for the at-home exercise giant, as the company has reported disappointing earnings almost every quarter since early 2021. The latest set of results revealed wider-than-expected losses and forecasted a drop in subscribers for the first time in the company’s history, which also caused shares to plunge 13% last Thursday.

Subscription service

While it may sound odd given it’s a fitness company rather than a streamer à la Netflix or Disney+, investors were right to be concerned by the forecasted drop. Peloton’s subscription service, where users pay each month to access live workouts, leader boards and a wide library of fitness content, has been the company’s main profit source for the last 8 quarters.

That’s a vast shift from how the company’s model looked even a couple of years ago, when selling bikes and other products was still at the heart of the business — Peloton netted over $900m in profit from product sales alone in their 2021 financial year. The wheels have since come off, however, and the company hasn’t turned a profit on the product-selling side for 5 consecutive quarters, with a whopping $290m loss in the last quarter of 2022.

More Data

• Why 514 pubs in England are called Red Lion.

Adidas is planning to donate the proceeds it makes from selling the $500 million stockpile of Yeezy shoes that the company has after cutting ties with Kanye West.

• Free returns could soon be a thing of the past as 41% of online retailers now charge, up from 33% in 2021.

• Weather does affect an athlete's performance, as a study of 170 ironman contestants found taller athletes perform best in warmer weather, and shorter people should stick to the cold.


• Bubble charts on the meteoric rise in AI Large-Language Models.

• Visualizing the amount of empty office space in cities through their iconic landmark buildings.

Trendlines: Disney is making big changes to its streaming strategy, bringing Hulu content into its Disney+ app. But how successful has Disney+ been since launch? [Answer below].

Answer A

Answer B

Answer C

Answer D

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