Robo rage

MARKETS

• Jobs report: Don't freak out, but it’s this morning. Economists have placed their chips on 180,000 new jobs added to the U.S. economy in May.
• U.S. economy: Household wealth spiked 4.5% in the first quarter to $108.6 trillion thanks to the stock market rebound.
• Trade: The White House says it's still moving forward with tariffs on Mexican imports.

FOOD

Beyond's Stock Is Red Meat

Beyond Meat, the plant-based meat company (still not used to writing that), reported earnings yesterday for the first time since its IPO. It beat Wall Street expectations with quarterly net revenue of $40 million, plus it forecast juicy sales of over $210 million for the whole year. Net losses came to $6.6 million for the quarter.

A lot has happened since the IPO

Beyond Meat (+14.87% after hours) has done remarkably well, up almost 300% from its IPO price at yesterday's close.

To appeal to more customers, fast food restaurants like Tim Hortons have announced partnerships with the brand, and Burger King launched its Impossible Whopper with Beyond Meat rival Impossible Foods. Some think McDonald’s is coming for Beyond next.

• JPMorgan analyst Ken Goldman told CNN the sky’s the limit for the industry, saying the overall fake meat sector could do over $100 billion in sales in 15 years. Beyond’s share of that veggie patty? 5%, Goldman thinks.

Zoom out: Those projections are so buoyant because customers are getting more concerned about 1) their health, although some in the industry say the fake meat burgers aren’t the healthiest choice, and 2) climate change. Meat production accounts for millions of metric tons of greenhouse gas emissions every year.

There are a few problems, though

One is the best kind; Beyond is having trouble filling all of its orders, a challenge Impossible ran into after it launched with Burger King. But making plants “sizzle, sear and even bleed” like meat also requires high-tech production, which means meatless burgers are and will probably stay pricier than traditional ground beef.

Bottom line: Beyond is clearly riding a meatless wave, and it’s set the gold standard for 2019 IPOs.

+ Optional homework: If all this leaves you curious about the meat-that-was-once-an-animal industry and its efforts to thwart the plant and lab versions, the WaPo has a great look at it here.

TELECOM

Ajit Pai Wants to Clean Up Your "Recents" Tab

Yesterday, the FCC voted unanimously to allow phone companies to automatically block robocalls, your thrice-daily reminder that your phone can be used to speak with another human.

The agency decided that carriers can use analytics programs that target suspicious phone activity.

• The programs can identify numbers that place unusually large volumes of calls at once, or that make large numbers of calls of the same, brief duration.

Chairman Ajit Pai believes robocall rage transcends differences, saying it “unites Republicans and Democrats, liberals and conservatives, socialists and libertarians, vegetarians and carnivores, Ohio State and Michigan fans.”

But some people aren’t convinced this is the end of the $100 Bahamian vacation offers. It’s not clear if carriers will be able to effectively stop robocalls from abroad. And the FCC's two Democrats said customers shouldn’t be forced to pay to have robocalls filtered out; under yesterday’s decision, carriers can charge for the service.

Bottom line: You can plan on fewer calls from numbers suspiciously similar to mom’s, but it might cost you.

TECH

Cloudy With a Chance of Google

Anyone who went to Google News and Googled “Google news” yesterday knows yesterday’s Google news was all about the cloud.

Stadia gets its wings

Google’s March announcement of cloud-based game streaming service Stadia was heavy on the hype, light on the details. But now we know...

• Stadia will start beaming 31+ high-end games in 14 countries in November.
• An initial “Founder’s Edition” package runs $130 for a hardware starter kit and three months of premium service (after which it’ll cost $10/month).

And one big cloud deal

Google is paying $2.6 billion to buy Looker, a data analytics platform aimed at beefing up Google Cloud’s offerings. It’s Google’s biggest acquisition since 2014’s $3.2 billion Nest deal.

Why now: Google Cloud has become a focal point as execs consider diversifying revenue away from digital ads—which today account for almost 85% of sales.

Yes, but...Google’s fallen well behind rivals Amazon and Microsoft in cloud leadership. Bloomberg’s Shira Ovide thinks M&A may not be able to make up the difference.

RETAIL

Don’t Judge a Buyout by Its Cover

Elliott Management is reportedly close to buying Barnes & Noble (+29.85%), per the WSJ. The FT says Elliott’s offer values the nation’s biggest bookstore chain at about $476 million.

This could be the life raft Barnes & Noble needs. The chain’s best known as Patient Zero of the Amazon Effect. Before it disrupted shopping or voice or Mother’s Day, Amazon flipped bookselling on its head.

• The damning evidence: A little over a decade ago, Barnes & Noble was worth $3 billion. Now go back and look at the second sentence.

But if anyone can execute a turnaround at B&N, it might be Elliott. The $35 billion hedge fund bought U.K. book chain Waterstones last year and actually helped it rebound enough to...brace yourself...open new stores.

If the same happens at Barnes & Noble, more than just collectors of leather bound books will be celebrating. B&N’s 627 stores are critical to publishers, who rely on the chain for a) marketing and b) keeping Amazon from completely dictating book pricing.

QUIZ

Quiz Me, Kate

Flies both vertically and horizontally. More awkward than Buffett’s lunch with the crypto guru. Always has your best interest at heart. It’s the Brew’s Weekly News Quiz.

1. Which 2020 presidential hopeful proposed a campaign platform called “economic patriotism” complete with a $2 trillion investment in clean energy/climate initiatives?

2. What industry am I? Of 74 companies in my sector, 36 missed forecasts on a critical metric last quarter. A subset of my earnings haven’t been this bad since the 2008 recession. And I can’t even blame the trade war.

3. Which two antitrust regulators have been divvying up oversight of Big Tech firms? For two bonus points: What are the four companies under scrutiny?

4. Fill in the blank: Blackstone’s global co-head of real estate said, “_________ is our highest conviction global investment theme today.”

5. Multiple choice: Which of the following did Apple not unveil at WWDC this week?

• A new Mac Pro
• App Store for Apple Watch
• iOS 14
• iPhone Dark Mode

Answers: 1) Sen. Elizabeth Warren 2) retail 3) the DOJ and the FTC, Apple/Facebook/Alphabet/Amazon 4) logistics 5) Apple released iOS 13, not iOS 14

WHAT ELSE IS BREWING

• Zoom (+9.62% after hours) reported its first financials as a public company. Nothing like topping expectations and offering a strong forecast to get things going.
• JPMorgan (+0.20%) is killing its millennial-focused mobile banking app, Finn. The customers it added in its short one-year life will be moved to Chase accounts.
• AT&T’s (+1.33%) WarnerMedia is reportedly scrapping plans for a three-tiered streaming service. Instead, it’ll package HBO, Cinemax, and Warner Bros. content for $16-17/month, per the WSJ.
• Barack and Michelle Obama announced a partnership with Spotify to produce a series of exclusive podcasts.
• Venture capitalist Mark Stevens was identified as the fan who shoved Toronto Raptors player Kyle Lowry during the NBA Finals game Wednesday night. He’s a part owner of the Warriors.

BREAKROOM

Friday Puzzle
We dug up a famous puzzle from 19th-century French mathematician Édouard Lucas:

Every day at noon a ship leaves Le Havre for New York and another ship leaves New York for Le Havre. The trip lasts 7 days and 7 nights. How many New York–Le Havre ships will the ship leaving Le Havre today meet during its journey to New York?

Breakroom Answers

Friday Puzzle
15 ships.