Crazy day

MARKETS

• U.S. markets: Investors took the tens of billions that changed hands on Merger Monday as a good sign for the economy, cranking up stocks to record highs. Also: optimism over a U.S.-China trade deal.

DEALS

EBay Sells Tickets

For newsletter writers, a Merger Monday on which companies announce more than $60 billion worth of deals is like when they close the door to the plane and your row is still empty.

So where to start? Let’s go with the most under-the-radar deal of the day: eBay’s sale of online ticketing company StubHub to Swiss ticket reseller Viagogo for $4.1 billion cash.

Mama, I’m coming home

Viagogo CEO Eric Baker cofounded StubHub in 2000 while at Stanford business school. But after being fired by his business partner, Baker left to start Viagogo in 2006. The next year, StubHub sold to eBay for $310 million.

Baker may not recognize his baby. StubHub has become a huge player in the U.S. ticket market, doing $4.8 billion in ticket sales last year. In Q3, it accounted for about 14% of eBay revenue.

But StubHub had been on the chopping block for months. In January, activist investors Starboard Value and Elliott Management called on eBay to sell its Classifieds business and StubHub.

Viagogo, you’re up

The company is a force in the U.K. and continental Europe, offering tickets to popular sports like cricket, rugby, and soccer. But Viagogo keeps finding itself in a scrum of regulatory scrutiny.

• Last November, the U.K.’s Competition and Markets Authority (CMA) secured a court order against Viagogo over concerns it was violating consumer protection law.
• Ahead of last year's World Cup in Russia, FIFA field a criminal complaint against the company for “opaque and deceptive business conduct.”

Big picture: Viagogo will need to become squeaky clean considering the market power it’s about to inherit with StubHub (moving hundreds of thousands of tickets per day across 70+ countries). As for eBay, shedding StubHub is step 1 of 100 in resolving a yearslong identity crisis.

LUXURY

LVMH Says Au Revoir, Bezos

An incomplete body of proof that the French are not known for subtlety: Camembert, Roquefort, and Bernard Arnault.

The one that won’t assail your tastebuds is the CEO, chairman, and biggest shareholder of LVMH, the world’s largest luxury conglomerate. Yesterday, Arnault brokered the biggest-ever deal in luxury when LVMH agreed to buy Tiffany & Co. for $16.2 billion.

• With a post-Tiffany-deal net worth of more than $106 billion, Arnault is within striking distance of Jeff Bezos and Bill Gates for the title of the world’s richest person.

Money does seem to grow on trees when you’re “the godfather of the modern luxury industry,” per the NYT. LVMH is the parent to a whopping 75 brands, from Dior to Dom Pérignon. LVMH has 3x the market cap of its nearest rival, Kering, and it’s the No. 2 most valuable company in Europe behind Shell.

Big picture: Consider Tiffany a starter ring. With Arnault at the head and roughly $50 billion in annual revenue, LVMH has moats wide enough to 1) insulate it from potential economic ennui and 2) make mega-dealmaking the new norm.

BROKERAGE

Schwab and TD May Have to Wait for Forever

Charles Schwab confirmed Monday it’s buying fellow online brokerage TD Ameritrade for $26 billion. But making it official brings hard questions: Where will we spend Thanksgiving? And will consumers suffer because of our union?

Sure enough, the “behemoth” Schwab/Ameritrade deal is already generating antitrust chatter—after all, the new firm would have $5+ trillion in client assets.

• Execs quickly pointed out that the combined entity would have ~11% of assets in the U.S. retail wealth management industry and only 6% of revenues.
• And the industry's race to no-fee trading is (theoretically) good for everyday consumers.

But this isn’t just about consumers. Schwab and TD Ameritrade both offer “custodian” services, such as record keeping, to registered investment advisers (RIAs). Schwab owns roughly half the market, and TD Ameritrade would tack on another 15%–20% share, per KBW.

Zoom out: You can count on antitrust regulators looking into the deal. But the $26 billion question is whether officials decide Schwab/Ameritrade’s competition is online brokers or giant Wall St. banks.

SUSTAINABILITY

Allbirds, Amazon, and the Public Private Label Feud

“We are flattered at the similarities that your private label shoe shares with ours.”

In an open letter to Jeff Bezos yesterday, Joey Zwillinger, cofounder of sustainable shoe startup Allbirds, called out Amazon for copying every part of Allbirds’s Wool Runner shoe—every part but the sustainability.

The backstory: Amazon recently released the Canal Street version of Allbirds’s Wool Runner for less than half the price. It swears that “offering products inspired by the trends to which customers are responding is a common practice across the retail industry.”

But Allbirds says something’s missing: Amazon isn't using the open-sourced, sustainable tech Allbirds has shared with 100+ brands.

Zwillinger to Bezos: “You can use it. We want you to use it...With the help of your immense scale, the cost of this material will come down for all users.”
Zoom out: Trying to convince Amazon and its sprawling collection of 1,000+ private label successes to adopt Allbirds’s sustainable habits won’t be easy, but neither is avoiding a tech bro joke in an Allbirds story.

ART

Historic Museum Heist in Germany

Around 5am local time yesterday, at least two burglars broke into Dresden’s Green Vault, home to some of Europe’s greatest treasures, and made off with at least three sets of "priceless" 18th century jewelry.

“It’s as if someone broke into the Louvre and had taken the Mona Lisa,” a jewelry historian told the WSJ.

• Officials are mourning it as not only a material loss but also a devastating cultural blow to the state of Saxony.
• Plus, it’s impossible to estimate the material loss because these items cannot be sold on the open market, German officials told the AP.

A team of 20 specialists is on the case.

PODCAST

Digital Gold: Crypto, Libra, and the Future of Blockchain

No matter how many times you’ve unsuccessfully explained bitcoin to your friends, you probably don’t even *really* know yourself. And then you pretend to be distracted by your phone when they ask how blockchain technology works.

Let’s fix that.

This week on Morning Brew’s weekly podcast, Business Casual, we’re breaking down everything crypto—from bitcoin’s ride up to $20,000 to Facebook’s misadventures in “reinventing money and transforming the global economy.”

Because while crypto memes are big, crypto’s influence on the worldwide financial system could be bigger.

• Is bitcoin really the favored currency of the black market, and if so, does that matter?
• Can Mark Zuckerberg and Facebook deliver on their promise of a new digital currency with Libra, and if so, can we trust it?
• Is “blockchain tech” overhyped, and if so, why do we still fall for the headlines?

For all the answers, Business Casual spoke with Arianna Simpson of Autonomous Partners, an investment fund focused on crypto and digital assets.

WHAT ELSE IS BREWING

• Uber lost its license to operate in London. The company is appealing the decision and will still be active in the city for the time being.
• A Ford VP challenged Elon Musk to a F-150/Tesla Cybertruck “apples to apples” tow test. Musk said, "Bring it on."
• Impossible Foods, a plant-based meat startup, could more than double its valuation in its next fundraising round, reports Reuters.
• Sen. Bernie Sanders criticized an MLB plan that would result in the elimination of dozens of minor league baseball teams.

FILL IN THE BLANK

Fill in the missing word to complete the full organization name.

1. NASA: National ________ and Space Administration
2. IBM: International Business ________
3. 3M: Minnesota ______ and Manufacturing
4. GEICO: ________ Employees Insurance Company
5. FIAT: Fabbrica ______ Automobili Torino

Breakroom Answers