Three Things to know today (August 13th)

Commentarya month ago
“No snowflake in an avalanche ever feels responsible.” – Voltaire
1. Old shopping habits drive Amazon’s relative market share vs. Walmart to new highs
New credit card data suggests that Amazon has gained significant ground from Walmart through the COVID-19 crisis, having seen its share of aggregate dollars spent at Amazon + Walmart rise by over 30% over the last 6 months. The surprising driver of this? Window shopping - or in other words, browsing-based product discovery. That historically has not been a major driver of Amazon sales, so we believe the uptick there may point to improvements made to Amazon’s algorithmic recommendation engine.
2. Tencent sees itself as relatively shielded from a potential US ban on Wechat
After reporting a strong Q2, the Chinese tech giant downplayed the potential impact of a US ban on its Wechat messaging platform. As a primarily China-oriented platform, less than 1% of Tencent’s ad revenue derive from US-based accounts. And as the most recent quarter’s performance has shown, despite the company’s breadth of focus, its economics are primarily driven by its fast-growing gaming segment, where it enjoys a dominant worldwide leadership position.
3. JCPenney may be bought out by its landlords soon
The bankrupt retailer is now reportedly in the advanced stages of talks to cede control of its assets over to Simon Property Group and Brookfield - two of the largest shopping center owners in the U.S. that both lease real estate to JCPenney. Given their landlord/tenant relationship, the economics of such a deal should have a natural leg up vs. any offer presented by potential outside bidders. This wouldn’t be the first time Simon has acquired one of its own tenants out of bankruptcy, and would follow on the heels of its previous acquisitions of Brooks Brothers, Forever 21, and Aéropastale.

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