__Introduce the problem...__ *then solve the problem*. After decades of pumping you full of caffeine and sugar, __[Pepsi](https://robinhood.com/stocks/PEP)__ wants to help you [chillax](https://robinhood.com/stocks/PEP). That's why it just [intro'd](https://www.fastcompany.com/90548696/pepsico-wants-to-help-the-caffeinated-masses-get-better-sleep-with-its-new-relaxation-drink) Driftwell, the ASMR of the canned drinks world: 

- __Driftwell (to sleep)__: The Millennially-packaged mini cans contain enhanced flat water with blackberry lavender (sounds pleasant, whatever that is). 
- __"Sip into relaxation":__ What Pepsi wants you to do. Driftwell's calorie- and sugar-free drink contains relaxing L-theanine (the star of green tea) and magnesium. 

__The problem/solution premium...__ The health shift we've seen in recent years means junkier foods/drinks have lost steam. Sugary sodas are being replaced with CBD-vegan-gluten free kombucha. Pepsi's "problem" drinks are waning, but now it can make *double* the $$$ by offering "solution" drinks, too. And these premium drinks command premium prices:  

- __$4:__ Price of a minican 10-pack of Pepsi — then you need Driftwell to sleep. 
- __$18:__ Price of a minican 10-pack of Driftwell — *then grab a Pepsi to wake you*.

_This guy needs a Driftwell_

__"Functional drinks" are 2020's big bev trend...__ These provide more than just sugar/alcohol/caffeine — they feature 1 ingredient with purported health benefits. __[Coke](https://robinhood.com/stocks/KO)__ launched Coke Energy with B vitamins and guarana. __[ABInbev](https://robinhood.com/stocks/BUD)__'s Bud launched hard green tea and coconut water. __[DrPepper](https://robinhood.com/stocks/KDP)__ invested in "smart energy" drink Adrenaline Shoc (sounds healthy). Sales of functional bevs came in at nearly $32B in 2019, up [7%](https://www.kten.com/story/42628168/pepsico-is-launching-a-drink-to-get-a-piece-of-the-1-billion-sleep-aid-industry) from 2018. We can expect to see growth accelerate during an anxiety-inducing health crisis. 


Pepsi wants to put you to sleep  as it drifts into "functional bevs"

__A TikToker and a database walk into a bar...__ The wait to see who TikTok’s US parent will be is over and it’s… anticlimactic. Yesterday, __[Oracle](https://robinhood.com/stocks/ORCL)__ confirmed it struck a deal with TikTok-owner __Bytedance__ to become a “trusted technology provider” (read: *not owner*). Oracle would reportedly be managing TikTok’s US data. The deal still needs approval from the US and China. Somehow, this endless saga only started *last month*.

- __#1:__ Trump says he'll ban TikTok on concerns that Americans' user data could be shared with the Chinese government. 
- __#2:__ Change of plans. The ban will happen *unless* an American company strikes a deal to acquire TikTok's US operations by September 20th.
- __#3:__ Oracle and a __[Microsoft](https://robinhood.com/stocks/MSFT)__-__[Walmart](https://robinhood.com/stocks/WMT)__ tagteam [emerge](https://snacks.robinhood.com/newsletters/2F3iI1nbMHbv4bvDR5gfaw/articles/2LMjKgW7k96k59D0CrdD35/) as the leading suitors.
- __#4:__ China throws a wrench into acquisition talks, saying it needs to approve the sale of TikTok and its algorithms.
- __#5:__ Microsoft gets rejected by TikTok. Oracle does "Say So" Doja Cat dance.

__Less of a parent...__ more of a guidance counselor. While Oracle will possibly get a stake in TikTok’s US assets, this isn't an acquisition. The "tech provider" role is vague, but it likely means TikTok will be moving its data to Oracle's cloud (and off  __[Google](https://robinhood.com/stocks/GOOGL)__'s, where it is today). Oracle could also get TikTok to use its marketing software for ads. TikTok is a big sexy catch of a customer, so Oracle stock jumped 4% on the news.   

Deal

__Is this a good deal for the US?...__ It certainly is for TikTok — the Tok gets to keep its 100M American users without giving up ownership of its business. But Trump has insisted the only way TikTok can avoid getting banned is a sale to a US company (this isn't that). Will Trump back off that demand? A few reasons he might:

- __Jobs:__ The US gets an American TikTok HQ with 20K employees. 
- __Popularity:__ Trump will avoid the wrath of American TikTokers ahead of the election.
- __Connections:__ Oracle's founder/Chairman/CTO Larry Ellison is pretty tight with Trump.


TikTok chooses Oracle as its American partner (sorry Microsoft)

__The cash runway doesn't look good...__ Pun 100% intended. __[Delta](https://robinhood.com/stocks/DAL)__, like other airlines, is strapped for cash. Domestic travel is down ~60% from last year and daily costs are still sky-high (Delta's [losing](https://www.wsj.com/articles/delta-to-use-frequent-flier-program-to-raise-6-5-billion-11600082314?mod=hp_lead_pos4) $27M/day). The government's $25B in airline bailout funds runs out on October 1st, and mass layoffs are expected. As a cherry on top of the cash-crunched sundae, US airlines just permanently [scrapped](https://snacks.robinhood.com/newsletters/7o4Om1Hzq8GXG0zovTZVwd/articles/2lN1BN3aZ8PX3uFiW5SxJA/) their $200 change fees for domestic flights. Sooo...

- __Delta will use its SkyMiles program to raise $6.5B__. It's using the frequent flyer program as collateral to borrow the money (basically, mortgaging your miles).
- __If Delta can't pay back the $6.5B loan,__ it won't get its planes taken away. Instead, the lenders will get to keep the $$$ Delta makes from lucrative SkyMiles sales.

__Please explane...__  Airlines earn money from frequent-flier programs by selling miles to banks and retailers that award them to customers. __[American Express](https://robinhood.com/stocks/AXP)__ is able to drop you those sweet travel rewards points since it *bought* them en masse from airlines. And each time you swipe your Delta co-branded card, Delta gets a little money from AmEx.


__Delta is a credit card company now (more than ever)...__ Few things drive loyalty like the metallic traveler status. In 2019, $4B in sales from Amex made up 8% of Delta's revenue. Delta expects annual AmEx sales to hit $7B by 2023. Delta is also AmEx’s largest co-branded account, making up 20% of AmEx balances worldwide. Delta’s passenger sales fell 60% in the 1st half of 2020 — But sales to American Express [dropped](https://www.wsj.com/articles/delta-to-use-frequent-flier-program-to-raise-6-5-billion-11600082314?mod=hp_lead_pos4) just *less than 5%*. With its passenger biz decimated, Delta's leaning into cards more than ever. 

Pepsi wants to put you to sleep as it drifts into "functional bevs"

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