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News Fix: Congress Grills Facebook, Doesn’t Get Anywhere

News Fix: Congress Grills Facebook, Doesn’t Get Anywhere

Dear Early Investor,

In case you missed it, online pet supply retailer Chewy went public in June. Chewy, which PetSmart bought for $3 billion in 2017, priced its shares at $22 and closed its opening day up 59% at $34.99.

Why are we talking about Chewy? Well, the News Fix loves dogs. It loves startups. And it loves IPOs. And when you combine the three, you get a stock the Fix pays attention to. Plus, Chewy is back in the news.

On Thursday, Chewy reported its first earnings since going public. And the news was pretty good. It generated $1.1 billion in sales for a $29.6 million loss. The revenue and losses are in line with what the company was projecting when it went public. In the same quarter last year, Chewy posted a loss of $59.8 million on $763.5 million in sales (CNBC).

Between the launch of its online pet pharmacy and its new private label business, it looks like Chewy is headed in the right direction. We’ll keep an eye on future earnings reports as they come in.

Now to the Fix!


The Fix was in Washington this week to cover the congressional hearings on Facebook’s new crypto, Libra. We had live pre- and post-hearing video broadcasts. And we live-tweeted the hearings as well. If you missed our coverage on Twitter, where were you? Just kidding. Make sure you follow @vinistic on Twitter to catch up, and make sure you don’t miss future live reporting. You can also follow @early1nvesting to keep up with everything Early Investing is doing.

In my special analysis for First Stage Investor members on Thursday, I explained why the hearings themselves were a missed opportunity to figure out how best to regulate Facebook’s Libra project and cryptocurrencies in general. And I looked at why Congress might regret this week in the future (click here to sign up for First Stage Investor).

House Financial Services Chair Maxine Waters (D-Calif.) wants to bring in Facebook CEO Mark Zuckerberg to question him directly about Libra (The Hill). David Marcus, the head of Facebook’s cryptocurrency project, was the one to testify this week.

One of the key constructive takeaways from the hearing (and there weren’t many) is that Libra – and to a lesser degree, all crypto – can’t be regulated until legislators decide what Libra is from a technical standpoint (MIT Technology Review).

For some reason, Treasury Secretary Steven Mnuchin is convinced that bitcoin’s only use is criminal and the U.S. dollar is never used in the commission of a crime. He’s elevated bitcoin and other cryptos to a “national security issue” (Bloomberg). And he’s also vowed he’ll never let bitcoin become the equivalent of Swiss bank accounts for criminals (CNBC).

Let’s be clear: Bitcoin is not a national security threat. Politicians from both sides of the aisle frequently invoke national security when they want to stop something without having to understand it or justify it.

And as Rep. Patrick McHenry (R-N.C.) has eloquently noted, no country has ever succeeded in stopping bitcoin because “there’s no capacity to kill bitcoin” (CNBC via YouTube).

In one other crypto headline of note this week, the U.S. Commodity Futures Trading Commission is investigating BitMEX, a popular crypto exchange in Asia, for providing illegal services to American traders (Bloomberg).


Curaleaf is buying the Grassroots marijuana dispensary chain (GR Companies) for $900 million in cash and stock. The move will likely make Curaleaf the biggest pot retailer in the U.S. Grassroots’ operations are focused mainly in the Midwest, while Curaleaf has focused most of its operations on the East and West coasts (Barrons).

We’ll be taking a deep dive into this deal in Thursday’s First Stage Investor Cannabis Report (click here to sign up).

Recreational marijuana will be legal in Illinois next year. Should companies serve marijuana at corporate events the same way they serve alcohol? That’s one of many questions companies in Illinois are now exploring (WTTW).

Boston finally licensed its first recreational marijuana dispensary. It will be located in Dorchester (MassLive).

In theory, New Jersey’s new medical marijuana regulations will help patients. Among the new regulations…

  • Patients can now buy up to 3 ounces of marijuana instead of 2 each month
  • Patients no longer have to visit their doctor every three months to remain eligible for medical marijuana.

But with medical marijuana averaging $500 per ounce, it’s tough to tell just how big an impact the changes will make (NJ.com).


Chinese startups are struggling to raise money thanks to a cooling domestic economy and trade war concerns with the U.S. In the first half of 2019, Chinese startups raised $23.2 billion. That’s down 54% from the first half of last year (TechCrunch).

And finally, no industry is immune to disruption. And that includes toilet paper (Vox).

That’s your News Fix.

Have a great weekend.

Vin Narayanan
Senior Managing Editor, Early Investing

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