Friday Jul.05, 2019

A cannabis CEO gets fired by a beer CEO

_That record high / mid-week vacay confidence_

Hey Snackers,

71 down in 10 minutes. The Nathan's Famous Hot Dog Eating Contest winner didn't boost the fast food chain's stock and didn't set a new devour record.

But markets did. All 3 major US stock indexes hit fresh record highs before closing early for the 4th. Now they're back in action for the June jobs report.

PS: Happy 25th birthday, Amazon.

Squabble

Walmart vs. Jet.com: The old guard is now clashing with its ecommerce newbies

The "Sam Walton College of Business"... That's where Walmart CEO Doug McMillon got his BA. It's named after Walmart's founder, and the dress code is business pleated, not Silicon Valley untucked. And deep reporting by Recode has revealed that profit-focused retail types at Walmart are annoyed with its new ecommerce darlings.

Jet.com got acquired in 2016 for $3.3B... and it's appeared to put up big results. But it turns out many at Walmart resent Jet.com and the new techies on the block.

The positive PR spin: Walmart's got its mojo back. It's putting up a legit fight against Amazon and is even beating Bezos in some spots (it was first to offer free 1-day shipping).
The stone cold sober truth: Walmart's ecommerce efforts lose $1B per year. And Walmart only owns 5% of total online shopping in the US, behind Amazon's 38% (according to Recode).
The latest: CEO McMillan is telling Jet.com's Marc Lore to cut costs. But Jet.com founder-turned-Walmart-ecommerce-guru says they must actually increase spending if Walmart's serious about beating Amazon.

Growth vs. Profit... With tech changing so many industries, you find situations where companies have old-and-profitable divisions squabbling with new-and-growing ones. Managers need the profits now to fuel growth for tomorrow. But the clash of culture can kill morale (and make the old guard feel un-loved). That tension is playing out in plenty of places:

Walmart: Its physical stores made nearly $7B in profit last year, but we all know the future is online and omni-channel commerce (a combo of online and in-store).
Automotive: Gas-guzzling trucks/SUVs are making all the money, but management loves to talk about self-driving tech and electric cars.
News: Fox News and CNN are making bank on TV (political ads are their profit puppies), but the growth is in digital and mobile.

Canopy Growth fires its Co-CEO — and it’s got Corona fingerprints all over it

Good thing he's Canadian, or this holiday would be sad... Bruce Linton, co-CEO of the world's largest cannabis company, Canopy Growth, told the world Wednesday that he got fired. Correction: The Company said he “stepped down.” But he was fired. And it looks like liquor legend and Corona-owner Constellation Brands was behind the big move.

Modelo lager. High West whiskey. Robert Mondavi merlot... Now pot. Constellation has already got the bar covered, so in 2018 it expanded beyond alcohol by spending $4B to acquire 37% of Canopy. This was the strategic vision: CBD-infused drinks. Canopy brings the marijuana-know-how, Constellation brings the beverage creation/distribution expertise. Then strategies stopped aligning:

Linton: The co-CEO was busy forging A-list partnerships with Martha Stewart and Snoop.
Canopy: The cannabis company is focusing on medical marijuana, with plans in 30 countries since the legal situation is easier than recreational.
Constellation: The alcohol company wants CBD-infused and profit-making drinks ASAP — but under Linton's leadership of Canopy, that wasn't priority #1.

It's all about the Board... The CEO may be boss, but he or she has to answer to the Board of Directors. Canopy has 6 seats on its Board, and 3 are execs at Constellation while a 4th is on Constellation's board, too (the alcohol empire managed to get board control with its $4B investment). Only 2 of Canopy's board members are independent from Constellation. Last week, Constellation's CEO was "not pleased with Canopy’s recent reported year-end results,” and it seems he and his board buddies did something about it.

What else we’re Snackin’

Wasted: Jim Beam's Kentucky warehouse packed with bourbon catches fire, destroying 45K barrels and creating a local environmental hazard
Hangry: Uber Eats is testing "dine-in," aka ordering online then showing up for a seat when your food's ready
Secured: Symantec jumps 14% on reports Broadcom's getting ready to acquire the anti-virus software legend
Support: Boeing sets aside $100M in a fund for those affected by the 737 Max crashes
Pause: MoviePass (whose parent company is HMNY) temporarily stops its services so it can improve its mobile app

Friday

The big June jobs and unemployment report

Latest Stories

Quitting time

Huge week in tech has market bouncing back

Yikes

Feds launch new probe of Tesla recall

Alphabet’s record Q1

Search and Cloud continue to deliver, as Alphabet announces its first-ever dividend

William Coulman, David Crowther8h

America’s birth rate keeps dropping

Births in the US, like almost everywhere else, are on the decline

Millie Giles, David Crowther9h

Nestlé, the world’s largest food company, is struggling

William Coulman, David Crowther9h

Tangential remarks

Nicolai Tangen, the CEO who holds the purse strings of Norway’s $1.6 trillion sovereign wealth fund, thinks that his fellow Europeans don’t quite stack up to US employees when it comes to pure hustle, telling the Financial Times in a recent interview that there is a difference in “the general level of ambition” and that “the Americans just work harder”.

Tangen has clearly been putting his money — or more specifically Norway’s — where his mouth is: the sprawling Norwegian oil fund, now one of the largest investors on the planet, has been pumping more capital into its US holdings in the past decade, while decreasing its investment into European entities.

The troublesome news for our European readers? Tangen might be onto something. According to data from the OECD, American workers are putting in almost 60 hours a year more than the weighted average for OECD nations… a benchmark that workers from countries in the European Union are already ~180 hours shy of.

Europeans ‘less hard-working’ than Americans | FT

Rani Molla

10h

$2T is the new $1T

Alphabet’s phenomenal earnings yesterday was enough to push the search giant’s market cap beyond $2 trillion, joining the likes of NVIDIA, Apple, and Microsoft.

Air taxi Blade is actually an organ transport business in disguise

How the helicopter fleet quietly became America's biggest airborne ambulance.

Jack Raines11h

15h

NBA TV rights are finally up for grabs — with cable and streaming giants battling for the top spot

Nia Warfield

Read

15h

Southwest nurses its wounds as airlines continue to feel the Boeing sting

Max Knoblauch

Read

Friday, Apr 26th

16h

What’s happening

Pop Quiz!

Sales of what are up 136% since 2019?

Don't be a sucka

$70B

Alphabet shares are soaring in the after-market session, with a initial jump of more than 10% implying a gain of upwards of about $200B in market value when the stock opens tomorrow morning.

Google’s parent company crushed earnings expectations, initiated a cash dividend for the first time, and authorized a fresh $70B in share repurchases for good measure. The market likes it very much.

What’s up doc?

4/25/24

HOP TO IT

Joshua Topolsky

We get results!

4/25/24

This earnings season is fully operational

Balancing Act

4/25/24

Acrobatic Accounting

So, you want to join the circus?

Megan DeMatteo

Rani Molla

4/25/24

No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?