☎️ Big banks' big margin call

...and JetBlue does Expedia things [Disclosures]( When they run out of Terra Blues chips Yesterday’s Market Moves Dow Jones 33,171 (+0.30%) S&P 500 3,971 (-0.09%) Nasdaq 13,060 (-0.60%) Bitcoin $57,736 (+4.21%) Dow Jones 33,171 (+0.30%) S&P 500 3,971 (-0.09%) Nasdaq 13,060 (-0.60%) Bitcoin $57,736 (+4.21%) Hey Snackers, Nike says it's not affiliated with blood-stained "Satan Shoes," and is now [suing]( the company that sold 666 pairs of them in a collab with Lil Nas X. Nike's lawyers work hard, but the devil works harder: the shoes [sold out]( in less than a minute. The [Dow]( closed at a record high, while the broader market lagged. Oh, and the massive ship that was [blocking]( the Suez has finally been moved after six days. Borrow Big banks could lose big bucks after a major hedge fund defaulted on margin calls The i-banking equivalent... of defaulting on your mortgage and getting foreclosed on: getting your multi-billion dollar positions sold off after missing a margin call. Trading on margin = trading (partly) with borrowed money (usually from a broker). Margin call = when equity in your margin account falls below a minimum level, and the lender asks you to put up more of your own cash or sell positions to mitigate risk. They can happen when the value of holdings in a margin account plunges. - Call: Last week, a bunch of big banks told a large US hedge fund ([reportedly]( Archegos Capital Management) that it needed to put up more $$$ to keep its positions. - Response: Archegos basically said "IOU but ICPU" (I can’t pay you). AKA: it defaulted on the margin call, leaving the banks that loaned it money exposed to billions in losses. - Result: Banks started selling off Archegos' positions to meet the minimum equity requirements for the margin account (and recoup some of the losses). It's a cascade effect... This big margin default is trickling down from the fund to banks to regular investors. For banks: this could mean billions in losses. [Credit Suisse]( and [Nomura]( warned of significant hits to their quarterly financials — both stocks plunged as much as 15% yesterday. Now, banks' damage-control is causing collateral damage: retail investors. - Last week: [Morgan Stanley]( [Goldman Sachs]( Credit Suisse, and others quickly dumped a bunch of stocks tied to Archegos, forcing it to liquidate nearly [$30B]( worth of positions. - That selloff caused many of those stocks to fall — including [Viacom]( [Discovery]( [Tencent]( and [Baidu]( — even while the broader market rose. Viacom has plunged a whopping 30% since Friday. THE TAKEAWAY High roller, high risk... Investment banks like Goldman lend companies billions in cash and stocks — and they make billions from these positions. Trading on margin means greater potential gain, but also much greater potential losses (that can mount fast). Before Monday’s warning, Credit Suisse said its pretax profit in January and February was the best in a decade. Now it could face billions in losses, because it may not have hedged its risk enough. Terra JetBlue is Expedia-fying itself with a new travel booking website Came for the free Terra chips... stayed for the all-inclusive resort. [JetBlue]( is known for its East Coast routes and unlimited free snacks (shoutout mini choc chip cookies). Now, it wants to Expedia-fy itself with a new travel booking [site]( called Paisly. JetBlue flyers can book hotel rooms, rental cars, and even theme park tickets through the site. JetBlue plans to expand it to vacation rentals, too. - "Vengeance Vacays": As the vaccine rolls out across the US, pandemic travel has been [notching]( records. JetBlue is investing in this new product to capitalize on all the pent up travel that could be coming, after a year of roundtrips to the fridge. Like a red-eye to Miami... The travel booking market is already crowded, with companies like [Expedia]( Priceline, and [Kayak](. But JetBlue thinks your ticket is its ticket to success. - Customization is key: Paisly uses your JetBlue flight info to make personalized suggestions, so you don't have to open 27 tabs and keep re-entering your flight dates. - The name was [inspired]( by paisley patterns, "symbolizing how Paisly’s travel suggestions are unique to each customer" (and we thought it was just a Millennial hook). Customers also earn TrueBlue rewards points for booking through the site. THE TAKEAWAY Platforms = the greatest love/hate relationship in business... Nonna's Pizza Shop loves that people discover its marinara through DoorDash — but hates paying DoorDash a commission. Airlines love that Expedia helps you snag their $356 LAX-JFK flight, but hate giving Expedia a cut. JetBlue would rather keep you on its own website. Paisly adds that all-in-one convenience, making direct booking more appealing. What else we're Snackin' - [Nice]( [Tesla]( double-charged some customers for new cars, leaving them desperate for refund details. - [Vaxpass]( The White House says there will be no federal mandate requiring a "vaccine passport" to travel. It's leaning on the private sector. - [Cryptocredit]( [Visa]( will allow the use of cryptocurrency USD Coin (a US dollar-backed stablecoin) to settle payments. - [Repair]( Raphael Bostic, the first Black Fed president, says there are "definitely merits" to reparations. - [Shot]( New Yorkers age 30 and up will be eligible for Covid-19 vaccines starting April 6th. - [Robox]( Boston Dynamics unveils Stretch, a warehouse robot that can move up to 800 boxes an hour (apparently, similar to a human). 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up [here](. The Snacks Daily Podcast The Return of Khaleesi... Game of Thrones writer George R.R. Martin's new job at HBO: universe-building. He just signed a five-year contract to crank out more ratings-slaying content. [Tune in]( to hear about HBO Max's strategy to win the Game of Streams. Snack Fact Of the Day [Volkswagen is renaming its US operations to Voltswagen (more EV-friendly)]( Tuesday - Earnings expected from [Lululemon]( [Chewy]( H&M, [McCormick]( and [BioNTech]( - Starbucks 50th Anniversary Disclosure: Authors of this Snacks own shares of Tesla ID: 1583551 Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC. Testimonials may not be representative of the experience of other customers and are not guarantees of future performance or success. Robinhood Financial LLC, member FINRA/SIPC. [Robinhood Terms and Conditions]( • [Disclosure Library]( • [Our Editorial Principles]( • [Contact Us]( • [FAQ]( [Manage Your Subscription Preferences](