Your Uber is here

MARKETS

• Corporate earnings: Ladies and gentlemen...start your projections. This morning, JPMorgan, Wells Fargo, and PNC kick off what should be an intriguing earnings season.

RIDE-HAILING

A Weekend Getaway with Uber's IPO

Reading a company's S-1 is like going away with a special someone for the first time. You find out their major risks, detailed financials, and how much they hog the covers.

The Brew’s office morphed into an upstate B&B yesterday when Uber made its IPO docs public. It plans to list on the NYSE under the ticker “UBER” next month.

What wasn’t totally new

Uber has self-reported unaudited financials for a while now, so the S-1 filing was more about details and context than groundbreaking stats. For good measure:

• In 2018, Uber reported an adjusted loss of $1.85 billion on revenue of $11.27 billion.
• Compare that to a net loss of $4.03 billion on $7.93 billion in 2017 revenue.

Uber didn’t disclose the valuation it’s seeking, but Wall Street whispers have suggested $100 billion is the magic number. It was last privately valued at $76 billion.

What we did learn

• Uber isn’t prepared to turn a profit anytime soon. So it says: “We expect our operating expenses to increase significantly...and we may not achieve profitability.”
• Uber is burning through cash as it cuts prices and spends gobs on recruiting to “remain competitive in certain markets.”

Bottom line: Uber’s once-phenomenal growth is slowing. But it’s also investing in ancillary businesses like food delivery, scooters, and driverless cars. And when it does go public in (what looks like) early May, it’ll probably be the biggest IPO since Alibaba in 2014.

ENTERTAINMENT

Think of Disney+ as the Live-Action Remake of Disney

Less cuddly, a little jarring, but...strategic.

At a 2+ hour investor meeting yesterday, the company unveiled Disney+, the cornerstone of its plan to reassert dominance over the entertainment kingdom.

The block-centric interface looks pretty similar to Netflix’s, but there's one crucial difference: It costs $6.99 a month, or $70 a year. Netflix's most popular plan costs $12.99 a month.

The Disney+ lineup is the ultimate flex

• A High School Musical series to serve all your karaoke needs.
• The Mandalorian, a live-action show set in the Star Wars universe. Its huge budget rivals that of early Game of Thrones seasons.
• Two live-action projects from Marvel ft. Loki and Hawkeye.
• The entire Simpsons catalog.
• And we’re not sure what levels of nostalgia a body can handle, but Hannah Montana, Lizzie McGuire, and at least 5,000 episodes of other Disney-branded classics will put that to the test.

Still, as Disney aggressively promotes its own streaming platform, it’ll shrink its presence on Netflix. As it does that, Disney stands to lose about $150 million a year in licensing income.

Bottom line: Disney+ may have been announced on the West Coast, but the target audience was on Wall Street. Given Disney’s firepower, analysts have high hopes for the service. Pressure’s on to add subscribers when it arrives Nov. 12.

SPACE

10/10

It took one extra day, but SpaceX's Falcon Heavy successfully completed its first commercial mission last night. To add to the excitement, its rocket cores landed safely on Earth as if they were Olympic synchronized divers.

• And that video would be #oddlysatisfying...but we know exactly why it’s satisfying: SpaceX recovered three rocket stages at once for the first time ever.

Not as satisfying, but something to build on: Israeli spacecraft Beresheet crashed as it attempted to land on the moon yesterday. “I think the achievement of getting to where we got is really tremendous. I think we can be proud,” said SpaceIL president Morris Kahn.

AVIATION

JetBlue Goes Transatlantic

The carrier announced plans this week to add “multiple daily flights” to London from its major U.S. hubs in NYC and Boston. The routes won’t go airborne until 2021, but JetBlue promised “affordable fares.”

Which are kind of its thing. JetBlue (+1.30%) is known for its low fares almost as much as it’s known for its array of take-whatever-you-want snacks.

• Per JetBlue’s Joanna Geraghty, “The fares being charged today by airlines on these routes...are enough to make you blush.”

Your move, Delta, American, and United. JetBlue’s British invasion (a phrase we are required by law to include) could lead to even more international expansion. Amsterdam and Paris are already on the shortlist.

But there’s one big hurdle, and it’s not that emotional support falcon that just fell into the aisle. To make overseas service work, JetBlue needs slots, or permission from airport owners to land and take off. CEO Robin Hayes yesterday urged regulators to force incumbents to cede some of their slots in the name of healthy competition.

AGRICULTURE

No More Counting Dollars, We'll Be Counting Farms

The U.S. Census of Agriculture—820 loamy pages of glory released yesterday for the first time in five years—showed consolidation is still the name of the farming game.

• Numbers of quite large and quite small farms increased, saddling mid-sized operations with most of a record $427 billion in grower debt.
• Today, the industry’s debt-to-income ratio is at its highest since the mid-1980s, Bloomberg reports.

The average farm size grew to 441 acres in 2017 from 434 acres in 2012. Ag Dept. economist Jim MacDonald (his dream job) said big farms have become scale machines, which lets them increase purchasing power and spread costs.

And cost management is...critical. During the census period, ag incomes tumbled 22%. And the average amount of land on farms dipped 1.6%.

But what happened from ‘12-‘17 is continuing today. The demise of the farming middle class is exacerbated by the trade war with China, which has hamstrung buyers in a bumper crop year. (Don’t feel left out when listening to Nebraska radio: learn what a bumper crop is.)

+ Where U.S. farms are located:

WHAT ELSE IS BREWING

• J. Crew is exploring an IPO for its Madewell brand.
• Hulu is creating a limited series about disgraced Theranos founder Elizabeth Holmes—who will be played by SNL star Kate McKinnon.
• Sen. Elizabeth Warren, 2020 hopeful, has proposed a new tax on corporations: a 7% surcharge on those making more than $100 million.
• Amazon (-0.18%) CEO Jeff Bezos challenged “top retail competitors” to raise wages in his annual letter to shareholders. Then Walmart’s (+1.20%) Dan Bartlett tweeted the Bezos story and said, “How about paying your taxes?”
• Marijuana use among U.S. workers has increased 16% since 2014 as more states legalize it, per Quest Diagnostics.

BREAKROOM

Friday Puzzle
We heard this fun puzzle on NPR a few weeks ago and thought you’d enjoy it. We’ll give you some famous marketing slogans (past and present). Each contains the brand name, but it’s anagrammed. See if you can figure out the name of the brand.

Example: This DUB's for you --> BUD

1. Please don't squeeze the RICH MAN
2. You're in good hands with A TALL SET
3. The best part of waking up is GOLFERS in your cup
4. This is not your father's IDLE BLOOMS
5. Pardon me — Do you have any YOUNGER POP?
6. Nobody doesn't like A RESALE

Breakroom Answers

1) Charmin
2) Allstate
3) Folgers
4) Oldsmobile
5) Grey Poupon
6) Sara Lee