🍋 Sweetgreen Gets Soggy
Good Morning! NYC Mayor Eric Adams announced that Chipotle will pay $20 million to 13,000 workers in a settlement for violating their right to predictable schedules and paid sick leave. Y'all are getting paid for having an unpredictable schedule? College endowments are having a year to forget, posting a median loss of 10.2% in the 12 months through June. On the bright side, July CPI drops today, and it could show that inflation has come off its peak.
With the public markets in flux, diversifying your portfolio with an asset class that provides the opportunity for outsized returns makes sense. Download the Sweater app to add venture capital to your portfolio.
1. Story of the Day: Sweetgreen Gets Soggy
(Note: Above picture is not inflation adjusted 🤡)
Sweetgreen stock was down bad yesterday after the salad slingers lowered their 2022 forecast. The outlook also included another tough bite: 5% of its support center workforce has been laid off, and it will downsize to a smaller office space to lower operating expenses.
The Kale Caesar has gone bad fast, as the company's stock is down 37% since its IPO in November. Revenues missed expectations at $124.9 million vs $130.2 million, but on the bright (?) side, the loss per share was right on the money at 36 cents.
Sales have been soggy since Memorial Day. Executives have mentioned a slow return to the office, a new wave of COVID, and "unprecedented levels of summer travel," as reasons for the disappointing performance.
The new annual revenue forecasts sit at $480-500 million, down from $515-535 million. Same-store sales growth predictions have also gone bad, with the new range at 13-19%, compared to a previous range of 20-26%.
CFO Mitch Reback said, "We think that it's a conservative estimate, but looking back, we've just been wrong on so many of these calls." Love the confidence, Mitch. You get those investors pumped!
Short Squeez Takeaway: "Unprecedented levels of summer travel," loosely translates to all the finance bros are vacationing in Europe, who are our most loyal customers. The pressure is on for restaurants. Last week Shake Shack also cut its full-year guidance, while Chipotle and McDonald’s have reported strong sales but noted that diners are trading down to more affordable options.
2. Markets Rundown
Disappointing tech earnings caused a pullback in equities and crypto alike.
Movers & Shakers
- (+) Nielsen ($NLSN) +21% after it postponed its court meeting and special meeting of shareholders, where an agreement between a PE consortium and WindAcre was to be finalized.
- (+) Principal Financial Group ($PFG) +7% thanks to strong quarterly results.
- (–) Allbirds ($BIRD) -19% because the shoe company cut its financial forecast for the year.
- Overtime, a Gen-Z sports media company, raised $100 million
- Facebook parent Meta set to raise $10 billion in bond debut
- Indonesia says Tesla strikes $5 billion deal to buy nickel products
- Whirlpool to buy InSinkErator for $3 billion to beef up kitchen presence
- Mitsui Sumitomo Insurance to buy U.S. reinsurance broker Transverse for $400 million
- Genoa Ventures, a life sciences investor, raises $84 million
3. Top Reads
- Elon sells $6.9 billion of Tesla stock (YF)
- Fed could approve 100-basis point interest rate hike after jobs shocker (Fox)
- Is America's strong dollar hurting everyone else? (CNN)
- How Wall Street wooed Sinema and preserved its multi-billion dollar tax break (CNBC)
- Airline CEO over-hiring to beat staff exodus (BBC)
- Climate change is making some homes costly to insure (CNBC)
- Deutsche Bank ex-trader's conviction thrown out in U.S. Libor-rigging probe (Reuters)
- How fast-food chains are changing value deals (CNBC)
- Why the banks financing Musk’s Twitter deal are unlikely to help him (Reuters)
- Home listings surge at record rate as market starts to cool (Fox)
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4. Book of the Day: Mathletics: How Gamblers, Managers, and Fans Use Mathematics
Mathletics reveals the mathematical methods top coaches and managers use to evaluate players and improve team performance, and gives math enthusiasts the practical skills they need to enhance their understanding and enjoyment of their favorite sports―and maybe even gain the outside edge to winning bets.
This second edition features new data, new players and teams, and new chapters on soccer, e-sports, golf, volleyball, gambling Calcuttas, analysis of camera data, Bayesian inference, ridge regression, and other statistical techniques.
After reading Mathletics, you will understand why baseball teams should almost never bunt; why football overtime systems are unfair; why points, rebounds, and assists aren’t enough to determine who’s the NBA’s best player; and more.
“You will learn how to use math to improve performance and predict outcomes in professional sports.”
5. Short Squeez Picks
A Message from Benzinga
If you’ve been looking at the market for the last few months, you might be thinking “This is a terrible time to trade and invest and I’m going to wait for the crash.”
“Fortunes are made in bear markets”
Smart investors find opportunities to profit in any market condition and the current conditions arguably make it easier to find opportunities than before.
No better way to get better at investing than learning all about options.
Full-time trader Nic Chahine has been helping new traders to find these opportunities with Benzinga Options. Nic climbed the ranks of the corporate finance world, and in 2000, branched out with an internet venture as CFO/COO. Since then he has started his own fund to pursue his passion for the stock market.
6. Daily Visual: Digital Media Comps
Source: Axios & Short Squeez Intern
7. Daily Acumen: Unhappy
“Between 1972 and 2018, the percentage of Americans who described themselves as very happy ranged from 29% to 38%. The number for 2021 was recently released: Just 19% of us said we’re very happy—10 percentage points lower than any prior survey.
Our happiness, it seems, is another victim of the pandemic. Indeed, COVID-19 and the resulting social isolation has delivered a bigger blow to our collective happiness than 2008-09’s Great Recession, 2001’s terrorist attacks and countless other distressing events from the past half-century.
These results come from the General Social Survey (GSS), which is the go-to source for data on American happiness. The survey is often used to highlight the negligible impact of rising standards of living on our happiness.
For instance, in 2018, 31% of Americans described themselves as very happy, barely different from the 30% who gave that response in 1972, the first year that the survey was conducted. Over the intervening 46 years, U.S. inflation-adjusted per-capita disposable income climbed 131%.
More money, it seems, hasn’t bought happiness. One reason: We care less about our absolute standard of living, and more about how our financial lot in life compares to that of others.
That suggests that the past few years, with a rocky economy that’s affected most of us, wouldn’t necessarily send us into a funk—and, indeed, if the recent decline in reported happiness was solely about money, you’d have expected all those stimulus checks and other federal government goodies to have softened the blow.
The GSS slices its data by age, education, political affiliation and so on. No matter which group you look at, happiness was down in 2021 compared to 2018, though the size of the decline often varied.
For instance, while the percentage of men saying they’re very happy dropped from 31% to 21% over the past three years, the decline among women was notably larger, from 31% in 2018 to 18% in 2021. One possible explanation: With children forced to learn remotely, mom ended up shouldering a large part of the resulting burden.”
Source: Humble Dollar
8. Crypto Corner by Bonkalytics.com
- Lawyers get specific on the "decentralization" of crypto projects
- A quiet NFT project with a unique model turns 1-year old
- Crypto platform Zipmex to start releasing Bitcoin, Ether for customers
- Blockchain bridges fall into troubled waters
- Coinbase may have a savior in BlackRock, but crypto concerns remain
- Crypto firms raised over $30 billion in first half of 2022 despite market slowdown
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9. Memes of the Day
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