He Musk be taking crazy pills

QUOTE OF THE DAY

There is a situation where money has been flooded into an unproductive and speculative direction.”

A South Korean representative discussing why the country put an end to Initial Coin Offerings (ICO). This comes only a few weeks after China made the same decision.

Market Snapshot

U.S. indexes finished higher, with the S&P and Nasdaq hitting record highs.
The Dow reached an eight-quarter win streak—its first in 20 years.
China’s currency (the Renminbi) narrowly avoided its biggest weekly loss since August 2015.
Gold fell after weak U.S. inflation reports.

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He Musk Be Taking Crazy Pills

Elon Musk burst onto the SpaceX stage and peered into his crystal ball: humans will hit Mars by 2024. For those of us still adjusting to facial recognition, the idea of selfies on Mars might be a bit much to stomach.

But Musk is certain the company will reach many launches a day with hundreds of passengers on board each time…a belief that puts SpaceX’s goal to reach the planet ahead of NASA and other countries’ space programs. Just a quick heads up before you pull up Yelp to check dinner reservations on Mars—a one-way trip will take three to six months and put a $200,000 dent in your wallet.

As for Musk and SpaceX, the question still remains: how will they pay for it?

That’s a great question

Much of SpaceX’s current $16 billion valuation hinges on expected future revenue from launching nearly 4,000 satellites into space and offering better global internet access—the largest internet communication system right now has around 55 satellites.

But to launch his mega-fleet of glorified TV dishes, Musk will need more than $1.3 billion in cash on hand. Better yet, he’ll need SpaceX to remain cash flow positive. And that’s easier said than done. The company has long promoted that it is “profitable and cash flow positive” on its website. With last September’s Falcon 9 mishap, the phrase was quickly removed.

And finally…

…here’s something to think about while you sift through flight deals for your next Martian getaway. SpaceX projects annual revenue of ~$30 billion in 2024—the year it could take its first trip to Mars. But the cost of one trip could tally up to $4 billion for just four people…and Musk wants to bring hundreds…daily!

It seems ludicrous, sure. But this is the same guy that disrupted the auto industry, is building an underground (and above-ground) network of supersonic transportation, and is reinventing solutions for solar energy.

What’s colonizing a potentially uninhabitable planet in the next decade?

Bonus brew: SpaceX’s real name is Space Exploration Technologies Corp.

Running On Fumes

Ever wish a mistake would just go away? Volkswagen knows the feeling. It’s facing another $3 billion charge to resolve issues from the fallout of its 2015 scandal (the one where it installed emissions-eluding software in 11 million vehicles). Our bad.

The money will go towards repairs on some U.S. models that are proving pricier to fix than originally planned. It’s bringing the bill for the scandal close to $30 billion in total.

But VW is learning that just throwing cash at a problem won’t make it disappear (Wells Fargo can relate). On Thursday, German authorities arrested Wolfgang Hatz (presumably in connection with Dieselgate), an engineer that shuttled between VW and some of its other brands like Audi and Porsche. It’s a possible sign that malpractice made its way further up the corporate ladder than previously thought.

This lingering damage is putting a huge strain on VW’s wallet (and reputation) as it attempts to challenge Tesla in the electric vehicle market.

Jet.com Takes Off

Just when you thought millennials couldn’t get any more “hip,” Jet.com goes ahead and releases a new low-priced private label grocery option (Uniquely J) geared towards urban millennials.

Jet.com, founded by CEO Marc Lore and acquired by Walmart last year for $3 billion, is trying to capitalize on the growing popularity of lower-priced private label brands—a $150 billion market Amazon (of course) is already trying to take advantage of.

Not to worry, Lore has a plan to best Bezos (not his first). It’s all in the edgy branding and organically sourced offerings of low-priced essentials (like coffee, olive oil, laundry detergent, etc.) Uniquely J is using to lure in younger shoppers. The designs are carefully curated for an urban millennial culture with unique aesthetic and labels like “badass espresso” for coffee and “Nom Nom” for Ziploc bags…(we’re still trying to figure that one out, too).

And if everything goes as planned, millions of younger shoppers will vibe with the more identifiable brand, drop what they’re doing, and wind up a week later with 400 rolls of paper towels they didn’t remember buying.

Musical Board Chairs

Travis Kalanick, who resigned as Uber’s CEO three months ago, appointed two new directors to the ride-hailer’s board: former Xerox CEO Ursula Burns and former CEO of CIT Group John Thain.

Forget soap operas—Uber’s the biggest drama around. On Thursday, Uber proposed restructuring the board to give Khosrowshahi control over more seats, while stripping board control away from Kalanick (h/t NYT). So what did Travis do? He unleashed a preemptive strike on Friday by giving the two open board seats to a pair of his cronies.

And remember, these are the same board seats that are the subjects of a lawsuit from Benchmark Capital, an early Uber investor and now mortal enemy of Travis.

Uber appeared to turn a corner when it hired Dara Khosrowshahi to be a stabilizing force after the turbulent Travis years. But since he started, Uber’s been put on life support in London…and now it has to deal with Travis’ power play to regain control of the board.

Tune in for the next edition of the Uber Files…will Masayoshi Son pull the trigger on a $10 billion investment?

What Else Is Happening…

August was a weak month for consumer spending and inflation.
A Bitcoin ETF is holding off on its debut until regulatory conditions become more favorable.
Amazon sold $1.6 million worth of Whole Foods store-brand products in one month.
GoPro launched two new products in an attempt to distinguish itself from smartphone cameras.

Economic Calendar

Friday Earnings: No Events

Economic Events: Personal Income and Outlays (-), Chicago PMI (+), Consumer Sentiment (-)

Monday Earnings: Cal-Maine Foods

Economic Events: PMI Manufacturing Index, ISM Manufacturing Index, Construction Spending

Tuesday Earnings: Paychex

Economic Events: Motor Vehicle Sales

Wednesday Earnings: Pepsico

Economic Events: ADP Employment Report, ISM Non-Manufacturing Index, Petroleum Status

Thursday Earnings: Costco

Economic Events: International Trade, Jobless Claims, Factory Orders

Friday Earnings: No Events

Economic Events: Employment Situation, Wholesale Trade, Consumer Credit

From the Crew

Amazon In Detroit?

The competition for Amazon’s HQ2 is fierce, with cities around North America putting on their Sunday best to woo Bezos and Co. One city that’s making a huge push is Detroit. Quicken Loans founder and #1 Motor City cheerleader Dan Gilbert released this hype video a few days ago, and hey—it’s got us thinking about a move.

Get pumped about the Motor City

A Better You

Curious about the routines, habits, and lifestyle choices of the most successful billionaires and icons in the world? Tim Ferriss’ Tools of Titans presents highlights from his interviews with said icons and their tactics to achieve success and happiness.

Anywhere On Earth

If you thought New York to DC in 29 minutes was impressive with Musk’s Boring and Hyperloop combo, what about New York to Shanghai in 39 minutes? At SpaceX’s event last week, Musk shared his vision for implementing rocket travel across the world. And…well…

You have to see it to believe it

The Breakroom

Question of the Day

A father is four times as old as his son. In twenty years, he’ll be twice as old. How old are they now?

Rank by Net Worth

Ralph Lauren, Oprah Winfrey, Christy Walton, Evan Spiegel.

Stat of the Day

43%–The percentage of 4.7 million legal marijuana buyers that choose McDonald’s as their top destination for fast food. Honestly…we’re not surprised.