Drinks with Clooney

QUOTE OF THE DAY

[It was] love at first sight." ––Whole Foods CEO John Mackey on the Amazon acquisition. Tell us how you really feel, John.

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MARKET CORNER

Market Snapshot

The Dow and S&P fell for a second straight day.
The Nasdaq ended higher on strength from biotech.
The dollar fell as investors anticipate rate signals from the Fed.
Oil dropped another 2%, hitting a ten-month low.

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Arriba, Abajo, Al Centro!

When George Clooney isn't busy breaking into the Bellagio, he’s selling tequila (or drinking it).

Clooney co-founded Casamigos, a premium tequila brand, in 2013. And with Casamigos selling 120,000 cases in 2016, Diageo (-0.35%), the world’s largest spirit maker, now wants a sip.

Diageo will pay $700 million, in addition to $300 million spaced out over 10 years, contingent on the brand’s performance and Clooney’s willingness to wear a speedo at all future company gatherings.

Hold up...who?

Diageo is a London-based spirit seller, whose brands like Smirnoff, Johnnie Walker and Guinness have been fueling our drinking habits to the tune of $15 billion a year.

And this acquisition presents another key opportunity for Diageo as global tequila volume grew 5.3% last year versus spirits sitting at just 0.04%.

The timing couldn’t be better

Recently Smirnoff and Johnnie Walker have been ditched for rival brands. In addition, Diageo’s smaller tequila brands have each been selling less than 10,000 cases a year.

But the liquor conglomerate looks to change that with Casamigos. This year, Casamigos is projected to sell 170,000 cases and an even more staggering amount of poor decisions.

Priced at $45-$55 a bottle, Casamigos tequila could bring in $112 million in the first year. Not to mention...

A better market presence

Right now Jose Cuervo (-0.34%) holds 30% of that desperately sought after tequila market.

Not to worry. Diageo is hoping that with any luck, its purchase of Casamigos and a warm smile from Clooney will be more than enough to make up the lost ground.

Sponsors of Tomorrow

Intel (-0.80%) and the International Olympic Committee (IOC) just announced a seven-year contract, which will bring live broadcast in VR, 360º replays and 3D to the Tokyo Olympics in 2020—a huge step forward from the Rio Olympics that only brought us Zika.

Intel seems to have swapped spots with McDonald’s, who dropped as a sponsor last week.

Now, it join the ranks of Alibaba and 11 other Olympics sponsors as it looks to get its hands on the mountains of cash generated during the big games.

And with VR now in the mix...you could be right beside Simone Biles as she wins gold...or maybe even Ryan Lochte as he takes a leak on the side of a gas station.

The possibilities are endless.

Kalanick: Exit Stage Left

Kalanick’s out, and this time for good.

After a dizzying number of scandals including #deleteuber, sexual assault allegations, a Google v. Uber lawsuit, passenger assault in India and Kalanick’s driver confrontation, investors pushed the notorious CEO towards a "leave of absence" last week.

Now, after facing further pressure, Uber’s head honcho has officially tendered his resignation.

While Kalanick will still hold a board seat and a large portion of voting rights, stepping down from a $70 billion (valuation) company he built with his own hands is no easy task.

It’s not all bad though, Phillip’s arriving in six minutes to pick him up.

Wanna Play Hardball?

Wal-Mart (+0.93%) is giving its tech vendors an ultimatum: stop using Amazon’s (+0.97%) cloud platform to run software services or risk losing Wal-Mart’s business.

The reasoning? According to a Wal-Mart spokesman, the big box retailer prefers that its "most sensitive data isn’t sitting on a competitor’s platform." Fair enough.

But, Wal-Mart has become notoriously anti-Amazon as the two duke it out for e-commerce business. Now that we mention it...Amazon isn’t too fond of Wal-Mart’s schoolyard tactics these days either.

Drama aside, Amazon owns 44% of the cloud space and has been wildly profitable. No wonder Wal-Mart wants to hit Amazon where it hurts.

After all, the best defense is a good offense (or something like that).

What Else Is Happening…

Nike (+2.00%) will now be selling some apparel directly to Amazon.
Etsy (+1.57%) is cutting another 15% of its workforce.
Harley-Davidson (+0.81%) is gearing up to make a bid for its Italian peer, Ducati.
Oracle’s (+1.07%) cloud computing business did wonders for its bottom line.

Economic Calendar

Monday: No events today
Tuesday: Adobe Systems (+), FedEx (+), La-Z-Boy (+) Earnings
Wednesday: Oracle (+) Earnings; Crude Inventories (-), Existing Home Sales (+)
Thursday: Accenture, Barnes & Noble, Bed Bath & Beyond, Carnival, Sonic Earnings; Housing Price Index
Friday: BlackBerry, Finish Line Earnings; New Home Sales

WATER COOLER

The Backstory: Elon Musk

Welcome back to The Backstory. Everyone knows Elon Musk as the outspoken Silicon Valley superstar he is today, but Elon wasn’t always building electric cars and thinking of ways to send people to Mars. Here’s how it all started:

Elon was born in Prestoria, South Africa and since day one (June 28th, 1971), he had a tenacious intellectual curiosity.

By the age of 12, he taught himself to code and sold his first game for $500. But Elon wasn’t always the suave-trepreneur he is today.

He faced a lot of bullying in school. One time it was so bad he was hospitalized.

Still, a few swirlies couldn’t stop this man.

After a brief stint in Ontario, Musk earned a scholarship to UPenn where he graduated with degrees in Physics and Economics.

Elon then went on to pursue a PhD at Stanford...for two whole days. But with the dotcom bubble calling his name, he and his brother Kimbal quickly started their first IT company, Zip2.

After years of living in his office and showering at the local YMCA, Musk hit it big when Zip2 was bought by AltaVista (later bought by Compaq) for $307 million.

Fast forward to 2017—Musk is worth $17 billion and now he’s the one giving out the swirlies.

THE BREAKROOM

Interview Question of the Day

You have a three-gallon jug and a five-gallon jug with no marks on either one. Your task is to fill the five-gallon jug with four gallons of water. How can you do this?

(Give up?)

Who Am I?

In 1981, I survived a plane crash.
There is a street in San Jose, California named after me.
I made an appearance in the fourth season of The Big Bang Theory.
I was a contestant on Dancing with the Stars.

(Who am I?)

Stat of the Day

$10 trillion

That’s the estimated value of mineral resources buried in North Korea (according to Quartz, not Kim Jong-un).