Kylie Jenner's paper wealth becomes real wealth

Tuesday, November 19, 2019 by Robinhood Snacks | Disclosures

Coty wants Kylie’s color

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Hey Snackers,

Bottle, draft, or almost 100? PBR is trying to make 99-packs of beer a thing.

Markets trickled higher to new record highs as T-Mobile's CEO put a date on his exit (May 2020) and Saudi Aramco stuck a price tag on itself ($1.7 trillion = Earth's most valuable company).

1. Ford's new Mustang Mach-E electric SUV isn't just a "compliance car"

Biggest product unveil since the Model T... Ford needed something big. So it hired a former Michigan Wolverine football player to be CEO. That's when Jim Hackett ordered designers to build an electric SUV inspired by its iconic Mustang sports car. On Sunday, Ford unveiled that Mustang Mach-E. Shares barely budged because electric cars are just a rounding error for Ford, but this signals a new focus on electric.

Don't call it a "compliance car"... Don't. Car companies that didn't completely embrace electric (that's everyone except Tesla and maybe Toyota/Nissan/Honda) still offered electric or hybrid cars — but those were "compliance cars":

  • You love profiting off SUVs and pickup trucks, which get bad gas mileage.
  • But the government requires that you hit minimum fuel efficiency standards for your whole vehicle fleet.
  • So you build compliance cars — electric or hybrid cars with incredible (or infinite) miles per gallon.
  • Picture this: It's like the table full of Sprite, Dr. Pepper, and fruit punch in the corner at a sophomore party. School rules require just as much alcohol as non-alcoholic.
  • But the Mustang Mach-E is built to compete, not comply.

Competition in Elon's mirror is closer than it appears... Tesla's first "everyman" electric car kinda has a rival in the low-ish priced Mach-E. Ford's starts at about $44K, which falls to $37K after a federal tax credit — that's about the same price as Tesla's lowest priced Model 3. Plus, the Mach-E is 100% SUV, which Americans always call shotgun on.


That deal really makes your lips pop... Kylie Jenner is selling 51% of her Kylie Cosmetics beauty brand to old school icon Coty, and there's nothing Kris Jenner can do about it. That $600M splurge boosted Coty stock 2.6% and values Kylie's startup at $1.2B. But the viral number is 51% — it gives Coty control of the company, even if Kylie remains its face and 49% owner.

Maybe she's born with it... maybe it's actually Instagram. Coty dominates ancient brands stuck in your middle school bathroom from CoverGirl to Clairol (it even does Adidas' cologne) — and its stock has fallen over 60% in the last 4 years. The new generation of cosmetics was born on social media.

  • Non-celeb makeup founder: Insta-candy packaging powered Emily Weiss' Glossier to a unicorn-status valuation over $1B.
  • Extra-celeb makeup founders: Kylie Cosmetics enjoys free marketing from her 151M-strong Insta account. Older sis Kim Kardashian's brand boasts 4M more for KKW Beauty. The Honest Company is fueled by founder Jessica Alba, while Goop is dependent on Gwyneth (and her Third Eye).

We’ve seen this face before... except in food, beverages, and razor blades. Older company's brands are out of style, so older company acquires upstart rivals.

  • Harry’s Razors got acquired by the owner of Schick (2019)
  • RXBar was acquired by Kellogg’s (2018)
  • San Diego-based Ballast Point Brewery was acquired by Constellation Brands (2015)
  • If you can't beat 'em, buy 'em.
What else we’re Snackin’
  • Heard: Spotify stock drops 5% on word Amazon is whipping up its free music service on more devices
  • De-Foamed: Dunkin' is ending its relationship with styrofoam cups in New England by December 1st
  • WeUpdate: WeWork is cutting at least 4,000 jobs to reach some financial stability — here's the email its Chairman just sent to WeWorkers about it
  • Replaced: Airbus snags $30B of new plane orders as Boeing's trust drama continues
  • Exec: T-Mobile is losing its long-haired, magenta-infused CEO John Legere after 7 years — he's stepping down in May as CEO but will stay on the board
Snacks Daily Podcast

One night in December 2017, corporations got richer overnight. That was thanks to the giant tax cut passed into law by President Trump. The New York Times just looked at what FedEx did with its $1.6B of money not sent to the tax man, so we dug deeper.


Disclosure: Authors of this Snacks own shares of Tesla and Amazon

ID: 1015805

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