The verdict is in

MARKETS

• Huge day for the economy: Our money's on the Fed to raise interest rates for the second time this year. This comes on the heels of inflation data showing that consumer prices rose 2.8% on an annual basis—the fastest pace since 2012.
• Tuesday's big mover: Twitter rallied 5% after JPMorgan raised its price target.

MEDIA

AT&T Scores a Huge Win

Where were you when the AT&T-Time Warner deal was first announced? We were a miniscule newsletter engraving Dow movements on a stone slab.

And how things have changed since October 2016. In a huge decision for media, mergers, and the business world in general, Judge Richard Leon (finally) gave the $85 billion acquisition the green light, no strings attached.

• Remember, the DOJ had tried to block the deal on antitrust grounds. It argued that by allowing a content distributor (AT&T, which owns DirecTV) to link up with a content creator (Time Warner, which owns CNN, HBO, and more)...consumers would end up paying more for TV.

But Leon didn't buy it.

So what's so earth-shattering about this deal, anyway?

Think of it as the initial cascade in a media industry that's ripe for an M&A avalanche.

Okay, we'll elaborate...

• Telecom companies that own the "pipes" (Comcast, Charter, Verizon) could look to acquire companies that make the stuff that goes in the pipes (content producers like CBS, Viacom, Discovery).
• Bulking up might be the only way to compete with the digital giants—Amazon, Netflix—which already make and distribute content on their own direct-to-consumer platforms.

So...what happens now?

These all seem pretty likely:

• AT&T (-2.45% after hours) will try to close the deal with Time Warner (+4.30% after hours) within a week, while the DOJ will consider next steps.
• Sprint and T-Mobile will use this decision to justify their proposed $26 billion merger.
• Comcast is expected to finalize a monster bid (more than $60 billion in cash) for Fox assets, the same ones Disney is currently eyeing for $52 billion.

Bottom line: A Hollywood executive told CNN that eight companies might own all U.S. media in the next decade: Alphabet, Amazon, Apple, Facebook, AT&T, Charter, Comcast, and Verizon.

Honestly? That doesn't seem so crazy.

AUTO

You Musk Read This Memo From Elon

It's never good news when Elon sends a late-day, company-wide memo. And this time was no different—Tesla (+3.21%) is cutting 9% of its 46,000-person workforce.

Per Elon:

• "Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles."
• "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable."
• "This will not affect our ability to reach Model 3 production targets in the coming months."
• "We've decided not to renew our residential sales agreement with Home Depot in order to focus our efforts on selling solar power in Tesla stores and online."

The Crew's take: We think it's safe to say a 4 pm happy hour email would've gone over better. That said, Tesla has been chasing profitability for 15 years and investors are getting antsy—now's the time to make the tough decisions.

TRANSPORTATION

E-Scooter Mania Shows No Signs of Slowing Down

Sorry folks...we've been having trouble sleeping recently. Seems like every hour of the day we're getting notified of an e-scooter company raising another massive round of funding.

This time, a familiar face—Bird—is looking to raise $200 million at a...wait for it...$2 billion valuation (per Axios).

It's déjà vu all over again:

• Just a few weeks back, Bird raised $150 million at a $1 billion valuation.
• In March, it raised $100 million at a $300 million valuation.

The only speed bump that could slow down this ride? Local governments trying to hit the brakes.

Putting e-scooters in perspective: San Francisco just voted to cap the number of scooters on city streets at 1,250. In April, 1.7 million cars entered the city via the Golden Gate Bridge (~56,000 per day).

STARTUP

Venture This: Rally Rd

Note: Read and then vote. In this section, we'll tell you about a startup making waves and then we want to hear from you—would you invest?

Turns out, you don't need to be a Dotcom millionaire to own a classic car collection. Just ask the guys at Rally Rd—an online investing app that lets you buy shares in classic cars as an alternative investment.

We'll explain: Just like you would with a hot new IPO, you can buy stock in a car on Rally Rd—like the '95 BMW M3 Lightweight for $59.25 per share.

Why we're buying (in one chart)

Why we're pumping the brakes

One word: liquidity. There's only a small window each month when you can buy and sell shares.

But hey, there may be something to this. Rally Rd has raised $2.9 million and plans on expanding into art and memorabilia. Time to take that Honus Wagner baseball card out of the attic.

Enough from us. Would you invest with Rally Rd? Yes or no?

PHARMA

Alzheimer's R&D Faces a Major Setback

Yesterday, drugmakers Eli Lilly (-0.41%) and AstraZeneca (-0.58%) pulled the plug on late-stage Alzheimer's medications. The announcement knocked the wind out of researchers, who are quickly losing faith in finding a solution.

Why that's important:

• Every 66 seconds, a new case of Alzheimer's is diagnosed in the U.S.
• Analysts project medical costs to reach $1 trillion this year.
• There are five subpar treatments available to slow Alzheimer's disease—a new medication hasn't been approved since 2003.

So why'd they cut the funding?

Bottom line: Drug R&D runs up the monthly bill. And if the industry's biggest players aren't seeing results, there could be major setbacks for Alzheimer's treatments.

WHAT ELSE IS BREWING

• The Senate is working to reverse the Trump administration's deal to revive ZTE.
• Hawaiian Airlines' (-4.42%) parent company said bookings and revenue were down this quarter. Turns out, active volcanoes aren't great for sales.
• Nintendo's biggest announcements from E3.
• Seattle officials said the city will repeal its new tax on large businesses after pressure from Amazon and Starbucks.

BREAKROOM

WHAT WE'RE WATCHING
The King of Kong: A Fistful of Quarters—If you haven't spent an hour and a half immersed in the world of competitive arcade games...now's your chance. This classic documentary will introduce you to a unique cast of characters all vying for one goal: to become the Donkey Kong champion of the world. It's on YouTube.

GUESS THE LOGO

(Answer located at bottom of newsletter)

Breakroom Answers

Guess The Logo
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