We like esports and we don’t care who knows

QUOTE OF THE DAY

There’s a high demand for reliable, independent measurement of value in esports.”

Market Snapshot

• U.S. indexes ended down with all 30 Dow stocks finishing lower.
• The VIX jumped 30% following the attacks in Barcelona.
• Bitcoin rose to $4,500.
• Palladium hit a 16-year high, lifted by industrial metals.



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Called Up to the Majors

We’re moving towards a world where the 40-yard dash is being replaced by the 40-button mash—so why not get on board with esports?

Market research firm Nielsen (-1.14%) introduced a new esports vertical to provide quality data and analytics to help teams, advertisers and tournament organizers navigate the fast-growing $696 million industry.

And at a time when 43 million people are tuning in to watch the League of Legends World Championship, while only 19.4 million watched Game 1 of the World Series, it might be onto something.

Nielsen has been a pioneer from the start

Back in 1923, good ol’ Arthur C. Nielsen dusted off his knickerbockers, got to work and developed the gold standard for gathering and measuring sales data, introducing the idea of “market share” into the global economy.

And by collecting data for nearly 100 years, across 100 countries and covering ~90% of the world’s population, Nielsen has become the go-to source for understanding spending habits.

It’s how Pepsi knows everyone buys more Coke and why the Super Bowl brings in more advertising revenue than Survivor: Milwaukee.

But when new trends emerge…

…the challenge becomes how to measure them.

Nielsen’s venture into esports is just one of the ways it’s responding to a changing media landscape. After realizing that people stopped watching TV on TV, Nielsen implemented software to measure data across digital platforms (like YouTube TV) to paint a true picture of television viewership.

And esports is in need of a similar picture. Currently, the industry’s most trusted metric is Justin’s Red Bull-to-Doritos ratio (Brewified Term coming soon). But now, as Nielsen teams up with high-profile stakeholders like Facebook, Activision Blizzard and Disney to develop standard consumer analytics, it looks as if esports is finally growing up.

Good news for the industry, bad news for Justin.

Jack of All Trades

Following Tencent’s (+1.92%) big day in the spotlight, Alibaba’s (+2.77%) Q1 earnings report showed there’s more than one ~$400 billion powerhouse in the world’s second biggest economy.

With revenue surging 56% to $7.4 billion (up from $2.5 billion two years ago), and profits doubling to $2.2 billion, Alibaba has stronger middle-class consumption and its growing cloud business to thank.

But this joy ride is far from over. While CEO Jack Ma and Alibaba chase down Amazon’s $474 billion market cap, consider that 85% of the traditional Chinese retail market remains untapped.

See Jack shoot. See Jack score. See Jack Ma.

Pharmageddon

$465 million is one hefty parking ticket.

But it’s the price pharmaceutical company Mylan (+0.30%) agreed to pay as it finalized a settlement with the U.S. Department of Justice.

The crime? Mylan was accused of intentionally mislabeling the EpiPen as a "generic" product instead of a “branded” one. Think about ibuprofen as the generic version of Advil—more difficult to say but both fix the hangover.

The distinction is a big deal because pharmaceutical companies pay Medicaid a far lower rebate on generic drugs (13%) than they do for brand names (23%). Meanwhile, last year Mylan increased the price of a pair of EpiPens from $100 to around $600, raising even more eyebrows about the accuracy of the "generic" label.

Now it’s time to pay up—and properly label the EpiPen.

What Else Is Happening..

• Tesla (-3.03%) is working with GE (-1.39%) to install solar panels on the rooftops of 50 Home Depot (-1.69%) locations.
• Syria held its first international business fair since 2011.
• L.L.Bean unveiled a new manufacturing facility for its iconic “duck boot.”
• Fortune released its list of the "40 under 40." Get a load of these overachievers.

Economic Calendar

• Monday     Earnings: No Events Today

                    Economic Events: No Events Today

• Tuesday    Earnings: Coach (+), Home Depot (+), Dicks Sporting Goods (-), Urban Outfitters (+), TJX (+)

                  Economic Events: Retail Sales (+), Housing Market Index (+)

• Wednesday    Earnings: Cisco (+), Target (+)

                        Economic Events: MBA Mortgage Applications (+), FOMC Minutes (+/-)

• Thursday   Earnings: Alibaba (+), Gap (+), Wal-Mart (+)

                   Economic Events: Jobless Claims (-), Industrial Production (-)

• Friday       Earnings: Deere & Co, Estee Lauder, Foot Locker

                 Economic Events: Consumer Sentiment, Baker-Hughes Rig Count

Buy/Sell/Hold

Buy

An $80 million house in Beverly Hills

We know it’s a lot of money…but submit your offer now because the price on Albert Elkouby’s mansion won’t stop rising. Elkouby, the CEO of large apparel company JH Design, first listed his (unfinished) house in 2012 for $29.9 million. When it didn’t sell, he added more features to the house in 2015, including a 15-car garage, and threw it back on the market for $72 million. Still no takers, but of course, that’s because it was far too cheap. Now it’s finished and listed at $80 million. Finally, a bargain!

Sell

Drumstick Debacle

It’s that time of year again…football season! And food vendors across Atlanta have grabbed precious real estate in the Falcons’ brand new Mercedes-Benz Stadium. It’s a curious business decision for Chick-Fil-A, in particular. Sundays, the primary day for NFL games, happens to also be the only day of the week that Chick-Fil-A is closed to observe the Christian Sabbath. We thought that the whole point of business was to…you know…sell things. But what do we know? We just write a newsletter.

Hold

Rent-a-baby

Underground markets pop up everywhere: social security numbers in Ukraine, pirating movies in a college freshman's dorm room and in Kenya, they’re finding ways to skip long election lines. How? Renting babies. Kenya’s longstanding rule of letting parents with infants skip lines has been exploited for years by the "babies-for-rent" scheme. But law enforcement is wising up. For the most recent presidential race, election officials inked the fingers of babies to enforce a one-baby-per-parent rule. The jig is up for now, but we’re sure someone will find a workaround.

Question of the Day

At a picnic there were 3 times as many adults as children and twice as many women as men. If there was a total of x men, women and children at the picnic, how many men were there, in terms of x?
A. x/2
B. x/3
C. x/4
D. x/5
E. x/6

(Give up?)

Who Am I?

I started as a student at General Motors Institute when I was 18 years old.
I am the first female CEO of General Motors.
I was the world’s top-paid auto CEO in 2016.
I am ranked number five on Forbes’ list of the World’s Most Powerful Women.

(Who am I?)

Stat of the Day

$74 billion

Bitcoin’s new market cap. It now has a higher valuation than Netflix, Adobe and PayPal.