"Doesn't taste like decaf" — "Someone's fudging the beans"
Hey Snackers,
Want that salmon sushi roll delivered with a side of TP roll? Some restaurants are giving away free toilet paper with orders. Ride or die for the 2-Ply.
Oil surged for its best day ever after Trump said he expects the Saudi-Russia price war will end soon. Jobless claims last week doubled to 6.6M from the week before, bringing the tally to a staggering 10M newly unemployed... The US lost nearly half of all the jobs gained since the '08 financial crisis in just two weeks. These next few weeks will be tough, too.
Venti-sized bad karma... In under 3 years, Chinese-owned Luckin' Coffee managed to beat out Starbucks for the role of "Biggest Coffee Chain in China." With around 4.5K sleek shops, scooter delivery, and adorable coffee cups featuring deer silhouettes, what could go wrong? On Thursday, Luckin lost over 75% of its value, nearly $5B. That sort of thing tends to happen when investors find out your sales numbers are fake.
The red flags were there... and some spotted them early, thanks to an anonymous 89-page report with on-the-ground research from whistleblowers that reads like a John le Carré spy novel:
Bad national PR... This is a bad look for Chinese public companies, which some investors were already skeptical of because of China's reputation for unreliable economic data. But Luckin' IPO'd on the Nasdaq, is not gov-owned, and is regulated by the SEC, so this spill was more of a surprise.
Drop the Juul (investment)... Altria is the tobacco-giant behind Marlboro cigarettes. Over the years, it's watched smokers trade tobacco-filled paper for vape-juice-filled metal. So in 2018, it dropped $12.8B for a 35% stake in the undisputed e-cig leader: Juul. That became a major liability as middle-schoolers got hooked on mango-flavored vapes — Altria lost billions. But now, it's got another big Juul-related problem:
Here's the extra fishy part... Two weeks before announcing its investment in Juul, Altria shut down its own e-cig biz. Then it started putting Juul coupons on Marlboro packs, and giving Juul the shelf-space that its (less popular, now dead) Altria e-cigs had. This pretty much killed any other real e-cig competition, according to the FTC. But...
Collusion is kind of hard to prove... Companies know that it's a no-no, so they tend to avoid leaving a paper trail. The FTC believes it has the facts to show that Altria and Juul "turned from competitors into collaborators." But it's unlikely that this "hey, let's collab!" text was sent over iMessage or Insta DM. Altria says the FTC "misunderstood the facts" and that it will defend its Juul investment during the lawsuit — and it might actually win.
Disclosure: Authors of this Snacks own shares of Luckin' Coffee 😢
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