A Meta can't change its spots | PayPal's our hero |

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Hi John, here's what you need to know for February 3rd in 3:13 minutes.

🌾 There are a lot of crypto projects out there to choose from – too many, if anything. So join blockchain consultant Shiv Mehta for How To Manage A Digital Portfolio on Friday, and get the lowdown on how to sort the wheat from the chaff. Get your free ticket

Today's big stories

  1. Investors weren't impressed by Meta's lackluster earnings report
  2. The collapse of one relatively small crypto project last week just exposed a big flaw in the overall market – Read Now
  3. PayPal announced a poor set of results, and it's not got high hopes for 2022 either

Identity Crisis

Identity Crisis

What’s Going On Here?

Meta’s stock plummeted after it posted disappointing results late on Wednesday, suggesting investors aren’t exactly convinced by Facebook’s new look.

What Does This Mean?

Meta makes most of its money by selling its users’ attention to advertisers, and it did reliably well on that front: ad revenue ticked up by a better-than-expected 20% compared to the same time in 2020. Likewise, revenue from its Reality Labs segment – where the metaverse magic happens – was up 22%. So far, so good.

Then again, there were fewer eyeballs on its platforms than analysts were expecting: the number of Meta’s monthly active users grew by a weaker-than-expected 9%. Its outlook for this quarter wasn’t what anyone had hoped for either, with Meta warning that inflation and supply shortages would take their toll on advertisers’ budgets. That didn’t go down well: its shares initially plunged 22%.

Why Should I Care?

For markets: New name, same problems.
Meta’s Reality Labs is growing, sure, but the segment still posted a $3 billion-plus loss last quarter. And Meta hasn’t exactly filled investors with confidence that it can pull off its more ambitious enterprises: the company’s most recent moonshot – a bid to launch its own cryptocurrency – ended with a whimper this week after regulatory pushback drove the company to scrap the plan altogether.

The bigger picture: NFTs FTW.
You’re much more to Meta than just a walking, talking data point it can sell onto advertisers for a quick buck, you know: you’re a walking, talking cash piñata too. It emerged late last month that the company’s working on features across Facebook and Instagram that would allow you to mint your own NFTs, and it’s even reportedly discussed a marketplace where you can buy and sell them too. That’s one cash cow the company has left unmilked up to now, which could be udderly short-sighted: investment bank Jefferies thinks the NFT market could double to $80 billion by 2025.

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Analyst Take

The Crypto Market Might Be Flawed

The Crypto Market Might Be Flawed
Photo of Reda

Reda, Analyst

What’s Going On Here?

If you’ve never heard of Wonderland, let’s get you up to speed.

Wonderland was founded last year by prolific crypto developer Daniele Sestagalli and the pseudonymous Sifu, who also manages the project’s $700 million-plus treasury.

But when it emerged last week that Sifu is really a convicted felon for identity theft and credit card fraud, investors abandoned the project in their droves.

Wonderland’s native token dropped more than 40% in a matter of hours, meaning it’s now 97% below its all-time high.

That then spread like wildfire: MIM, UST, LUNA, and plenty of other acronyms felt the knock-on effects in a way that exposed just how vulnerable the crypto market is to contagion.

So that’s today’s Insight: the full story of how the collapse of Wonderland exposed the biggest flaw of the crypto market, and what you can learn from the sorry saga.

Read or listen to the Insight here

SPONSORED BY BLACK SHEEP COFFEE

Breakfast with a side of NFTs

Good coffee shops in the UK are a dime a dozen.

Really great coffee shops, though, are something special – and then there’s the one that sells NFTs along with their flat whites.

We’re talking about Black Sheep Coffee: the British favorite where commuters can admire some unique street art while grabbing their morning dose of freshly ground coffee.

But you don’t have to be passing by to get your art fix: Black Sheep just dropped its exclusive NFT collection on Opensea.

And when we say “just”, we mean it: the collection went live today.

They’re selling faster than Black Sheep’s fresh croissants, so don’t miss your chance to grab one.

Wake Up To NFTs

Zero To Hero

Zero To Hero

What’s Going On Here?

PayPal announced disappointing quarterly results this week, but it might only be a matter of time before the payment giant’s “super app” sends its stock up, up, and away.

What Does This Mean?

PayPal wasn’t feeling much love last quarter: long shipping delays and the end of lockdowns made online shopping much less desirable than in-person browsing, and what money customers had to spend was limited by the higher prices of everyday essentials. eBay didn’t help much either, pushing its users toward its own payment system and continuing to poach transactions from one-time partner PayPal.

PayPal’s users, then, only spent 23% more last quarter than the same time the year before, leading the company’s total revenue to grow just 13% – its smallest uptick in two years. And don’t expect a swift turnaround: PayPal revealed a worse-than-expected outlook for revenue and new user accounts in 2022, which might be why investors initially sent its shares plunging 17%.

Why Should I Care?

Zooming in: Is it a bird…?
PayPal’s trying to keep users on its platform by becoming a “super app”, having recently added savings accounts and crypto trading. And it seems to be working, with the company reporting that the average active user now makes 45.4 transactions – up on the 42.9 analysts were expecting. That might be just the start: PayPal’s reportedly planning to launch a suite of investment products fit to rival Robinhood’s too.

The bigger picture: PayPal’s backup plan. 
PayPal announced last month that it’s thinking about launching its own stablecoin – a cryptocurrency that would be pegged to the value of the US dollar, making it much less volatile than the likes of bitcoin and ether. “PayPal Coin” would be an alternative way of making payments on its platform, and could render them cheaper and more secure. The company’s been a bit slow on the uptake, mind you: Visa not only accepts stablecoin transactions, it’s already moved on to developing a range of stablecoin-focused products.

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💬 Quote of the day

“Never underestimate the importance of having fun.”

– Randy Pausch (an American educator and professor of computer science)
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🌎 Finimize Live

😇 You can put a price on morality

Companies’ abilities to live up to high sustainability and governance standards has a major impact on their success. Problem is, you need to know how to put a value on those “principles” in the first place. Here’s your solution: come along to our How To Value A Company’s Principles and Genuine Impact’s Truman Du will give you a few pointers.

🏠 How To Cheat On REITS: 5pm UK time, February 3rd
📲 How To Manage A Digital Portfolio: 6pm UK time, February 4th
📚 How To Value A Company’s Principles: 1pm UK time, February 7th
♻️ Will Bitcoin Pass The ESG Test?: 5pm UK time, February 8th
✅ How To Paint Your Crypto Green: 6pm UK time, February 9th
🤓 How To Make Tech Companies Do Better: 3pm UK time, February 11th
👊 How To Beat Inflation (Without Getting Risky): 5pm UK time, February 16th
🔥 Getting The Most Out Of Your Investing Strategy: 5pm UK time, February 17th
🏡 Your Guide To Opportunity Zones: 5pm UK time, February 25th

🎯 On Our Radar

  1. Sorry, guys. Getting the snip won’t save the world.
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  3. Celebrate female power. Here are 25 sources of inspiration.
  4. Your next flight could take you into space. Let’s just clear the runways first.
  5. Not today, New York Times. How to make Wordle free forever.
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