Bundle of investment news: Tyson robotization and the incredible adventures of Amazon in Italy

Пачка инвестновостей: роботизация Tyson и невероятные приключения Amazon в Италии

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 comparison with the same quarter a year earlier. Since all US issuers, then all results are in dollars. When creating the material, sources were used, inaccessible to users from the Russian Federation. Hopefully, you know, what to do.

The burden of a monopolist: Amazon slammed a large fine in Italy

Italian antitrust authorities demand from American e-commerce giant Amazon (NASDAQ: AMZN) pay a $ 1.3 billion fine.

According to regulators, the company favored Italian sellers, who, when placing the goods on the online platform, used its services for the storage and delivery of goods. Amazon made it easier to buy from these sellers, adding a Buy in One Click option to their ad and showing their ads to site visitors more often, than seller ads, who have not used Amazon's logistics facilities.

In parallel, European Commission regulators are conducting a similar investigation against Amazon: they are also very worried, how the company deals with third-party sellers.

Amazon's revenue is heavily dependent on third-party sellers, and the company's relations with them have become increasingly strained in recent years. Amazon imposes its terms of service on them and creates competing products based on collected sales data. The news of the increased attention of regulators to this issue, coupled with the trend of consolidation of sellers on the Amazon platform, threatens it with big trouble.

The company behaves like a monopoly in developed countries with a long history of antitrust actions by regulators - and it definitely cannot end well. Moreover, even in developing countries, regulators began to infringe on local Amazon counterparts, as we know from history with Alibaba.

Amazon cannot soften its policy without serious consequences for the final margin of its business.: the retail part of Amazon is extremely low-margin, and therefore discrimination against less-marginal 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 react to this in the form of claims and fines.

  Hey, Jerome

"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, After all, in fiscal 2021, Tyson spent 70 million.

The reason for this investment is simple: America has the strongest labor shortage. Plus, the high cost of labor is accompanied by another round of an endless pandemic., when literally one detected case of coronavirus infection can lead to the closure of the entire workshop for an indefinite period. Maximum automation in the manufacturing plant will minimize epidemiological risks for Tyson.

Tyson is wise enough, reinvesting the big profits of the last quarter in the development of their business. Moreover, the company has uncertainty ahead: USDA plans to complicate the rules for purchasing meat by companies like Tyson in the direction of improving conditions for farmers, from whom they buy animals. Now Tyson and others like her have the ability to twist the hands 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 shift the growth of costs to customers only until a certain time..

In this context, Tyson's investment in automating its production looks even more timely.: because if in the future the company cannot save on purchases, then at least he can save on labor costs.

A game of humiliation: the United States launched an investigation into the practice of short

The US Department of Justice announced the beginning of a large criminal investigation of the relationship between investment funds and research companies. Law enforcement authorities suspect, that these categories of players coordinate their actions in order to manipulate the market.

Analysis of trades 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 short shares, tricking the public, juggling facts in their research. Research, in turn, should have made an impression, that the monitored issuer is engaging in fraudulent activities, and thus allow you to make money on the collapse of his shares, caused by the actions of investors. In such cases, the actions of the researcher may be dictated by his connections with customers from investment funds..

  All about everything

There have already been similar cases: in 2018 Sabrepoint Capital paid "short researcher" Quinton Matthews, for him to do a critical review of 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 a lawsuit against the site. Farmland and Matthews eventually reach an out-of-court settlement, as Matthews admitted, that in his article he made a distortion of the facts.

But Sabrepoint remained out of the spotlight of courts and regulators., although very possible, what she was able to earn on shorting Farmland shares: Matthews' publication caused stocks to fall, which made them shorts easier. Obviously, the current investigation by the Ministry of Justice is intended to prevent such situations in the future.

For Investors, Investigation Means Like Good News, so bad. The good news is, what if the Ministry of Justice toughens its requirements in relation to "short researchers", then it will be less likely, that shares, which you keep, fall from that, that some impudent guy released a study of dubious quality, which blames the issuer for all deadly sins.

And it's bad, that some "short explorers" act as orderlies of the forest, uncovering stories of real fraud and letting investors find companies with real problems, - for example, so it was with Nikola. If the requirements for researchers are unduly tightened, 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.

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