Amazon punished in Italy for monopoly. Tyson Foods gives all meat to robots. U.S. Department of Justice vs Stock Short.
Disclaimer: when we talk about, that something has grown, we mean a comparison with the same quarter a year earlier. Since all issuers are from the USA, then all results in dollars. When creating the material, sources were used, inaccessible to users from the Russian Federation. We hope, Do you know, what to do.
The burden of a monopolist: Amazon hit with heavy fine in Italy
Italian antitrust authorities demanded from the American giant of Internet commerce Amazon (NASDAQ: AMZN) pay a $1.3 billion fine.
According to regulators, the company favored Italian sellers, who, when placing goods on the online platform, used its services for the storage and delivery of goods. Amazon made it easy to buy items from these sellers, by adding a "Buy with One Click" option to their ad and showing their ads to site visitors more often, than seller ads, who did not use Amazon's logistics capacity.
In parallel, European Commission regulators are conducting a similar investigation against Amazon: they are also very concerned, how the company treats third-party sellers.
Amazon's revenue is heavily dependent on third-party sellers, and the company's relationship with them has become increasingly strained in recent years. Amazon imposes its terms of service on them and creates competing products based on the sales data it collects.. News of the increased attention of regulators to this issue, coupled with the trend of amalgamation of sellers on the Amazon platform, threatens it with big trouble..
The company behaves like a monopolist in developed countries with a long history of antitrust actions by regulators - and this certainly cannot end well.. Moreover, even in developing countries, regulators began to infringe on local analogues of Amazon, as we know from history with Alibaba.
Amazon can't relax its policy without serious consequences for the bottom line margin of its business.: Amazon retail is extremely low-margin, and therefore discrimination against lower-margin third-party sellers on its platform is inevitable. So I would expect an escalation of the conflict: Amazon will continue to oppress independent sellers, and sellers and regulators will respond to this in the form of lawsuits and fines.
"Men ate meat": Tyson Foods plans extensive automation
Meat producer Tyson Foods (NYSE: TSN) plans to spend approximately $ 1.3 billion on automating its factories over the next 3 years. This is a tangible shift in company policy., because in fiscal 2021 Tyson spent 70 million for these purposes.
The reason for this investment is simple: America's worst labor shortage. Plus, the high cost of labor is accompanied by another round of an endless pandemic, when literally one identified case of coronavirus infection can lead to the closure of the entire workshop indefinitely. Maximum automation in the manufacturing plant will minimize the epidemiological risks for Tyson.
Tyson is wise enough, reinvesting large profits of the past quarter in the development of their business. Moreover, the company faces uncertainty ahead.: The US Department of Agriculture plans to complicate the rules for the purchase of meat by companies like Tyson in the direction of improving the conditions for farmers, from whom they buy animals. Now Tyson and its ilk have the ability to twist the arms of farmers and impose low prices on them., which allows Tyson itself to increase profits. The Ministry of Agriculture wants to oblige Tyson to buy meat at auctions - this threatens to greatly increase purchase prices and negatively affect profits. After all, you can only shift the growth of costs to customers until a certain time..
In this context, Tyson's investment in automating its production looks even more timely.: after all, if in the future the company will not be able to save on purchases, at least save on labor costs..
Humiliation game: in the United States began an investigation into the practice of short
The US Department of Justice announced the launch of a large criminal investigation into relations between investment funds and research companies. Law enforcement authorities suspect, that these categories of players coordinate their actions in order to manipulate the market.
The analysis of the trading of several dozen companies with suspicious price movements is used as material for the investigation.: типа Luckin Coffee и Mallinckrodt. One of the main goals of the Ministry of Justice is to find out, did research companies, specializing in stock shorting, tricking the public, juggling the facts in their research. Research, in its turn, should have made an impression, that the monitored issuer is engaging in fraudulent activities, and thus allow to earn on the collapse of his shares, caused by the actions of investors. In such cases, the researcher's actions may be dictated by his connections with customers from investment funds..
There have already been similar cases: in 2018, Sabrepoint Capital fund paid "short explorer" Quinton Matthews, for him to critique Farmland Partners, working in real estate. He later posted this analysis on the Seeking Alpha website., which led to a drop in Farmland shares by almost 39%, and Farmland filed suit against the site. Farmland and Matthews eventually reached an out-of-court settlement, as Matthews admitted, that in his article he allowed a distortion of facts.
But Sabrepoint remained outside the attention of the courts and regulators., although very possible, what she was able to earn by shorting Farmland shares: Matthews' publication caused stocks to fall, which lightened their shorts. Obviously, The current investigation of the Ministry of Justice is designed to prevent such situations in the future..
For Investors, Investigation Means Like Good News, so bad. The good news here is, what if the Ministry of Justice tightens its requirements in relation to "short-researchers", it will be less likely, that shares, that you are holding, fall from that, that some impudent guy released a study of dubious quality, which accuses the issuer of all mortal sins.
And that's bad, that some "short-researchers" act as forest orderlies, uncovering stories of real fraud and allowing investors to find companies with real problems, - for example, so it was with Nikola. If the requirements for researchers are too stringent, then useful research will also disappear from the market. As researchers are tortured to prove, that there was no malice or conflict of interest in their actions.
