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Feb 21, 2022

The Weekly Scan February 21, 2022

By Stash Team

Find out what’s happening in the world of business this week.

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Welcome to the Weekly Scan. Here’s what we’re following for the week of February 21, 2022.

Remington’s settlement. Nine families of the people killed during the 2012 shooting at Sandy Hook Elementary School reached a $73 million settlement with Remington Arms Co., manufacturer of the gun used to kill 20 students and six staff members. Remington’s four insurers will reportedly pay those families the full amount of coverage available to the gun manufacturer. Remington previously filed for bankruptcy in 2020, selling off all of its assets. On December 14, 2012, 20-year-old Adam Lanza broke into Sandy Hook Elementary in Newton, Connecticut and used a semiautomatic rifle to kill his victims, before shooting himself. The Sandy Hook shooting was, at the time, the second-deadliest mass shooting in the United States. The families reportedly will no longer go to trial with Remington, and thousands of pages of Remington’s internal documents could now be made public, as result of the settlement. The suit, which was filed two years after the shooting, argued that Remington prioritized “profit over public safety,” by marketing and selling assault rifles to civilians. 

  • The takeaway: The settlement marks the first damages award of this size against a gun manufacturer in regards to a U.S. mass shooting, according to Adam Skaggs, the chief counsel and policy director for the Giffords Law Center to Prevent Gun Violence. The lawyer representing the nine families, Josh Koskoff, said that he hopes the settlement will send a message to gun manufacturers, as well as the companies that insure them, that marketing their guns to civilians can lead to financial consequences.

NPR

Searching for privacy. Google announced that it’s rolling out new restrictions that will reduce tracking on Android devices, and increase privacy. The tech company will replace its advertising ID, a unique string of characters used to identify a person’s device. Ad tech companies often use those IDs to track and share information about a person, which they then use in targeted advertisements. Google will reportedly continue to use its current system for two years. Android is the operating system for Google mobile devices.

  • The takeaway: Google’s decision follows a similar move by Apple in 2021 to increase user privacy by limiting tracking on Apple devices. In April 2021, Apple released a software update, allowing users to opt out of tracking on their iPhones, preventing advertisers from gleaning that data. The changes, called App Tracking Transparency, received backlash from tech companies like Facebook’s parent company Meta, Snap, and Peloton. Meta has said that it expects Apple’s changes to reduce its sales this year by $10 billion. On the flip side, Meta has praised the way Google is rolling out their privacy changes, saying that Google has been a collaborative partner in beefing up privacy.  

CNBC

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Dashing to the top. Delivery service DoorDash reported revenue and order volume that beat its 2020 numbers. Revenue totaled $4.89 billion in 2021, 69% higher than revenue for 2020, when indoor dining was temporarily halted due to Covid-19 restrictions. For the three months ending in December 2021, DoorDash brought in $1.3 billion in revenue, a 34% increase from the same quarter of the previous year. DoorDash said that it expects its total value of orders to increase to $50 billion in 2022, from $42 billion in 2021. Despite its strong revenue numbers, DoorDash reported losses and earnings that fell short of analyst expectations. DoorDash’s losses reportedly increased to $468 million in 2021 from $461 million in 2020, due to the company’s expansion into Germany and Japan, and its acquisition of Finland-based start-up Wolt Enterprises. 

  • The takeaway: DoorDash’s 2021 revenue numbers could be a sign that food delivery is still a growing industry, even as indoor dining has mostly returned. The Covid-19 pandemic reportedly gave the delivery industry a jumpstart, as consumers stayed home and ordered in. DoorDash took advantage of that trend, and started to deliver groceries, alcohol, and pet food, in addition to restaurant orders. DoorDash also partnered with retailers including Walmart and Macy’s to fulfill online orders for them. DoorDash is the largest food-delivery company by market share in the U.S., with revenue of nearly $5 billion for 2021.

Wall Street Journal

A rotten avocado situation. The U.S. has paused imports of avocados from Mexico after a food safety inspector in Mexico reportedly received a death threat. The U.S. has banned avocados from Michoacán, a coastal state west of Mexico City, starting February 11, 2022. Michoacan is the only state authorized to export avocados to the U.S. It is also reportedly subject to frequent cartel violence. Mexican President Andres Manuel Lopez Obrador criticized the decision, suggesting that certain parties hope to keep Mexican avocados out of the U.S. market to support political and economic interests. Mexico has historically supplied 80% of avocados in the U.S. market. 

  • The takeaway: The price of avocados reached record levels in the U.S. in February 2022, at $26 a box. Demand for avocados has also steadily increased over the years, doubling to 9 pounds per-capita for the 10 years through 2020. The U.S. currently has 57 million tons of avocados, roughly a two-week supply, according to sources. Food prices in the U.S. have jumped 6.5% in January, due to record inflation and supply chain issues.

Bloomberg

 Here’s what we covered last week in the Scan: 

  • Peloton announced that it would lay off 2,800 employees, and remove its CEO and founder John Foley in response to the company’s recent performance problems.
  • The U.S. Department of Justice seized more than $3.6 billion in stolen cryptocurrency from a New York couple Ilya Lichtenstein and his wife Heather Morgan.
  • Amazon announced last week that it will increase the cost of its yearly Prime membership by 17%, raising the price to $139 from $119.
  • The Biden Administration will require states to submit plans to put electric vehicle chargers along highways to provide better support for the U.S. electric vehicle industry. 

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Stash Team

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