Adam Neumann Buying Back WeWork? & Eli Lilly Worth More than Tesla

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0:26Good morning, Brewed Daily Show. I'm Neil Fryman. And I'm Toby Howell. Today, Adam Newman just couldn't stay away from the cucumber water. He is trying to buy back WeWork. Then Taylor Swift's legal team is coming for the guy who publicly tracks the movements of her private jet. It's Wednesday, February 7th. Let's ride.

0:51We have a major announcement to start the show today, ladies and gentlemen. Our first Morning Brew Daily merch drop is live. By the time you're listening to this episode, you will be able to head to the Morning Brew shop and pick up your very own Morning Brew daily hoodie. I'm so excited. We put together this drop because it's still cold outside, and these hoodies are comfy, cozy as can be. It's also the perfect gift for the MBD superfan in your life, especially if that superfan is you. Yeah, whether you've been with us since the very beginning or if this is your first ever episode, these hoodies are sick.

1:26Neil and I rock them constantly. Also, Valentine's Day is coming up. And what is more romantic than giving the gift of Morning Brew Daily Show? I truly can't think of anything. Okay, Toby, where can people buy this hoodie? Okay, a few ways. You can go to shop.morningbrew.com or you can head to the show description wherever you listen to your podcast. Or we'll also link it on YouTube. By the way, if you want to see what the sweatshirts look like, head to the YouTube because Neil and I are rocking them right now. We'll also platter the link all over our socials at MBDailyShow so you can find it there too.

1:59One final note, this is like one of those streetwear limited drop vibes. So please, please go snag one ASAP because supplies are limited. Neil, I'm just so excited to see this out in the wild. Before we jump into the show, we have a quick word from our good friends over at Veeam. Neil, scale of one to Veeam, how are you feeling about the show today? Like a seven? I'm confused about the parameters of the scale. Well, one is you're feeling bad, and Veeam is you're feeling confident and secure and resilient. I guess still a seven. All right, well, I am feeling Veeam today, and yes, Veeam is an adjective, as well as the number one global market leader in data protection and ransomware recovery.

2:38Check out Veeam.com today to learn more. That's V-E-E-A-M.com today. Raise the runners. Raise the sails. Raise the sails. Captain, an unidentified ship is approaching. Over. Roger. Wait, is that an enterprise sales solution? Reach sales professionals, not professional sailors. With LinkedIn ads, you can target the right people by industry, job title, and more. Start converting your B2B audience today. Spend$250 on your first campaign and get a free$250 credit for the next one. Get started today at linkedin.com slash campaign. Terms and conditions apply. So I want to put a sequel on everyone's radar.

3:17WeWork episode six, Return of the Newman. And it's not out of the realm of possibility after Adam Newman, the WeWork founder, went public with his attempt to buy his former company out of bankruptcy yesterday. Newman's lawyer sent a letter to WeWork's advisors asking them to consider his takeover approach, which he's been lining up for months with financing help from hedge fund Third Point. If this happens, it'd be one of the most dramatic executive comebacks in business history, up there with Steve Jobs' return to Apple in 1997 after getting booted 12 years before. But this is the part of the story where I remind everyone there is a long way to go.

3:55WeWork does not appear to be rolling out the red carpet for Newman because Newman said he's been stonewalled for months as he's tried to get information. Plus, he'd have to win the support of the senior creditors who are poised to gain control of the company following bankruptcy proceedings. Toby, I have to give you credit. You know, a few months ago, you predicted this would happen. This would happen. And now that it has, or at least it's moving in that direction, what is going through your mind? I mean, let's freaking go. You and I were sitting waiting for some smoothies yesterday when the notification for this story hit our phones and we both just celebrated.

4:28It was as if the news gods had smiled upon us and sent us this new Greek comedy or Greek tragedy of epic proportions. Of course, it is just a headline for now. The closer you look, the more the cracks begin to appear. I mean, even Third Point, the hedge fund that he was getting the financing from, said it had made no commitments as of now and it was still only in preliminary talks. And then also WeWork responded and says, hey, we get a lot of offers like this on a week-to-week basis. So this is just another one. So, but whatever, for one blissful moment, we were as excited as could be. Well, I think this is a serious offer because he, in the letter, they detailed how he's tried to buy WeWork for months now.

5:08He said he put up a billion dollars in financing. He offered$200 million. And another reason why I think this has some legs is because WeWork's creditors and landlords are frustrated with the company for not turning itself around when it should have. I mean, there was a hearing yesterday where the creditors and landlords went up and just complained nonstop about how there wasn't enough liquidity. WeWork wasn't doing enough, quickly enough, to get out of bankruptcy. So I think there is pressure on management at the company now to make moves to get an influx of capital. And so that, I think, is one factor that could help Newman's bid because the people who are owed money by WeWork are getting very frustrated right now.

5:51Yeah. And let's just entertain the idea that we've entertained on this show before is that this is also weirdly a perfect time, in our opinion, for WeWork to thrive in the current environment. Remember, office rents and office prices are kind of falling off a cliff as the rise of remote work has led to higher vacancies than ever. But also this new class of kind of hybrid remote worker kind of needs exactly what WeWork provides, which is this flexible short-term desk rental situation. And there's also other companies out there that are kind of doing what WeWork set out to do very well. IWG is a company that's growing in this space.

6:26As of September last year, it had 3 ,455 locations. This is a really big co-working company. So I still think that there is a world in which WeWork can work, whether it's under Adam Newman or someone else. Yeah, but we should remind everyone that Newman didn't exactly crown himself in glory when he ran WeWork. He ran it up to a$47 billion valuation, which was impressive, but that all collapsed when they tried to IPO back in 2018. And when you looked under the hood of this company, there was very shady corporate governance. There were accusations that Newman was self-dealing. So he's gonna have to win support of these senior creditors, one of them including SoftBank, who poured$16 billion into Newman's WeWork and lost a lot of money, more than$10 billion worth of that.

7:13So you can understand why they might be hesitant to welcome Newman back. Yeah, remember the good old days of community-adjusted EBITDA. That was just one of the craziest financial metrics of all time. Let's move on. The world of sports on TV just got yet another shakeup in what was already a very shaken up industry. Fox, Warner Bros. Discovery, and Disney are combining forces like the Power Rangers to launch a new streaming joint venture that will move all their sports content under a single brand. That means content from ESPN, TNT, and Fox Sports will all live on a new standalone app called Cable.

7:49Just kidding. We don't know the name of this new thing right now, but you can make all the cable jokes you want because gosh dang it, if this doesn't sound a lot like what freaking cable is, pricing will be announced at a later date, but estimates put it in the$75 to$80 per month range, which is right around what services like YouTube TV or Hulu Live costs. What we do know is that each company would own one-third of the new outlet and they'll license their sports content to it on a non-exclusive basis. And we're going to get a new brand name too. Okay, a lot of info there, Neil. Thoughts on this new venture?

8:21I know you and other people are making jokes about how streaming is just turning back to cable. But I think what really is happening is cable is turning into streaming with this new joint venture. This isn't the cable of old. You can't surf channels. You have to go into various apps and click on a particular game you want to watch. But it is just another sign that the last bastion of the cable bundle, the only thing that the cable bundle had left was live sports rights. And we've seen just in the past few months with Netflix getting WWE, with that exclusive game, NFL playoff game on Peacock, that this is just a tidal wave of sports moving to streaming platforms.

9:00And I think it's not fair. It's not crazy to say that at least by far next year, you know, 90 90 percent of the sports you watch are you're going to be clicking into a streaming app to watch it. Yeah, absolutely. The concentration of top sports under kind of one singular roof, if you will, is very significant. I mean, between them, they own ESPN. Warner has most of the rights to NHL and NBA, while Fox and ESPN control a majority of the rights to Major League Baseball right now. So you've got hockey, basketball, baseball right there. Football is obviously the crown jewel of everything. And while Fox and ESPN do have deals with the NFL, the NFL is more distributed than most.

9:39Remember, Sunday night football, it lives on NBCUniversal. Thursday night football is on Amazon. CBS owns a lot of the Sunday afternoon games. So that is still the one thing that isn't being concentrated under this new power structure. so I do think that you're missing a little bit of the the crown jewel here let's talk just quickly about the intended audience maybe it's the the sports the big sports fan who doesn't want to pay for the YouTube TVs of the world that's$80 but also has cut the cord so finding that middle ground where someone's like I just really want to watch a ton of sports and that's only what I want to watch on TV and they're trying to find this is for that particular person we don't know how much it's going to cost yet, but CNBC reported that a logical starting price point would be$45 to$50 a month.

10:26Do you think that is attractive for people? I want a sports super app so badly. I do not want to have to watch the Premier League on Peacock and then go to find the NBA on this app. I just genuinely do want one single app. If you call it Cable Plus, then send me some royalties, Fox and everybody, but I do want this super app. Moving on. I've got another in and out for 22. 24. Hope it's not too late for that. Last names out, two first names in. And that's because pharma giant Eli Lilly has now surpassed Tesla in market valuation, leading some to argue that it should replace the automaker among the magnificent seven stocks that rule over Wall Street.

11:05Eli Lilly only strengthened its case yesterday when it reported earnings that showed why it has investors foaming at the mouth. Its obesity and diabetes drugs Zepbound and Manjaro are selling even more than expected, and there were already sky-high expectations. Manjaro booked$2.1 billion in sales in the fourth quarter, up from just$279 million a year ago. Not only that, a study found that Lilly's drugs appear to improve fatty liver disease known as MASH, adding to the wide list of health problems these diabetes drugs seem to help treat. Meanwhile, Eli Lilly rivaled Novo Nordisk, the maker of Wegovi, also reported blockbuster results last week.

11:44So if we take a step back and look at these two major revolutions going on right now, I'd argue Microsoft and NVIDIA are the early winners of AI, and Eli Lilly and Novo Nordisk are the early winners for weight loss drugs. Yeah, a lot of the pieces we were seeing yesterday was the fact that Eli Lilly passed Tesla in market cap for the first time, or not for the first time, but for the first time in a while. And so that, to me, is kind of like a passing of the baton. And a lot of these pieces kind of drew parallels between Tesla's EV revolution and what's going on at Eli Lilly right now. I mean, these are two companies that are being traded at valuations that you don't see in their industries.

12:21I mean, Tesla trades at 50 times its earnings. Eli Lilly trades at 55 times its earnings. There is technically a justification. Both these are big dominant players in markets with huge growth potential. But also, it is so interesting to see where you got Ford Motor at a 6.6 multiple. Johnson & Johnson has a 15 times multiple. And yet you have these two golden children being valued way, way above their peers because they think that they have such great growth potential. Yeah, I mean, ZepBound is expected to be, if the forecasts are true, it's going to be the best-selling drug of all time. This weight loss drug market is supposed to be a$100 billion market.

12:59Like, the growth potential is endless. And the only thing tripping up Novo Nordisk and Eli Lilly right now is production. And a very interesting development last week when Novo Nordisk bought a contract drug manufacturer, Catalent, which makes drugs for a variety of manufacturers of drug developers. and that shows it's a very unusual deal and it shows just how important expanding production capacity to fill demand is for for norvo nordis and eli lily it's the limiting factor right now on their sales yeah again it's a very like tesla-esque story arc where the limiting factor for tesla for a long time was their production capabilities which is something that they nailed so i do think we are seeing a similar like production uh race to to try to see who wins this market okay before we jump into the next part of our show we're going to take a quick break Eczema isn't always obvious, but it's real.

13:55And so is the relief from EBCLIS. After an initial dosing phase, about 4 in 10 people taking EBCLIS achieved itch relief and clear or almost clear skin at 16 weeks. And most of those people maintain skin that's still more clear at one year with monthly dosing. EbGliss, LibriKizumab, LBKZ, a 250 milligram per two milliliter injection is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema. Also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies.

14:27EbGliss can be used with or without topical corticosteroids. Don't use if you're allergic to EbGliss. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with Epglis. Before starting Epglis, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about Epglis and visit epglis.lily.com or call 1-800-LILY-RX or 1-800-545-5979. Tonight on NBC, Jimmy Fallon and Bozema St. John host a highly anticipated new competition show. I hired 10 creatives from all walks of life.

15:01They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On brand with Jimmy Fallon. Series premiere tonight on NBC. The name Jack Sweeney probably doesn't mean much to you all listening, but one person definitely knows who the UCF junior is, Taylor Swift. You see, Jack Sweeney has been running accounts for years that track the takeoffs and landings of the private aircrafts of everyone from billionaire tech CEOs and Russian oligarchs to, well, billionaire global singers as well.

15:44The data Jack uses is publicly available from the FAA and can be utilized like hobbyists like himself, but that hasn't stopped the targets of Jack's accounts to take action against him. Taylor Swift's attorneys wrote a cease and desist letter back in December saying Jack's action have left her in a, quote, quote, constant state of fear for her personal safety. And Swift is not the only person who feels that way. When X was still Twitter, Sweeney's account was banned for sharing what Elon Musk called his assassination coordinates. Neil, these accounts have fueled all sorts of free speech and privacy debates, but especially when it comes to Taylor Swift, who routinely deals with stalkers.

16:21Free speech, privacy, and also pollution because he tracks the sort of carbon emissions from private jets, which are known to be, you know, much higher than the average commercial jet. So yeah, he's fighting back like he fought back against Elon Musk. He said, I'm not going to try to be bullied by billionaires here. I'm not putting a GPS tracker on someone or invading anyone's privacy. This is literally public information by the FAA. Any hobbyist with maybe a little extra time, maybe his classes don't start till 11 at UCF, so he has a little extra time can do this uh so he's pushing back and saying look look like i'm not violating any laws here i understand that taylor swift has stalkers and it must be very you know uncomfortable and scary but what i'm doing is not necessarily heightening the danger for her because she publishes her tour dates people know if she's going to the chief's game or not so this is a very interesting free speech thing but he's saying i'm really not violating any laws here He might not be violating any laws, but the lawyers who wrote the letter to him said, while this may be a game to you or an avenue that you hope will earn you wealth and fame, it is a life or death matter for our client.

17:30Which, I mean, it's very true in some sense. When you're as big a star as Taylor Swift or even Elon Musk, you attract everyone from across the craziness spectrum. And any little details about their location can represent a threat to their safety. There is steps that Sweeney's taken. He is now publishing the location of jets 24 hours later because he has to. It was Elon made it. So it violated the terms of service on X to publish the live locations of people. So it is just extremely interesting. This is such a combination of so many different storylines from the pollution to the privacy, to the public speech.

18:06Swift's carbon footprint from her private jet has definitely come under scrutiny over the past couple of years because she topped the list of the biggest carbon dioxide polluters of any celebrity in 2022. She emitted about 1 ,100 times more than the average person does, according to the digital sustainability consultant Yard. And her people fought back, saying she's loaning out her jets to other people. And before her Aeros tour, she bought carbon offsets. So she's, like, you know, offsetting her emissions. But she is number one. And so that's also put a target on her back. And everyone's, you know, definitely going to be tracking her flight if they can from Japan back to Las Vegas for the Super Bowl coming up on Sunday.

18:47So, yes, this is a wide thing. But I have to say, I know we were arguing a little before the show, but I'm totally on Sweeney's side. I think he's I think her flight, you know, hers and any billionaire or any public figures in the public interest. And if you're not, you know, doing any particular illegal snooping, then it should be fine to track her flights. people want to know it and you're providing a useful service. And that flight from Tokyo to the Super Bowl might be one of the most tracked flights of all time. Moving on, the shroom boom is upon us. And how do we know that? One metric you can look at is the number of busts executed by law enforcement officials.

19:23And a new report out yesterday showed those have skyrocketed in recent years. In 2022, officials confiscated 844 kilos of mushrooms containing psilocybin, aka magic mushrooms, which is a 273 % increase from 2017. And the jump reflects soaring demand for shrooms as more studies have come out showing that it can potentially treat a variety of psychiatric disorders. In 2018, the FDA gave psilocybin a special designation to accelerate research into its treatment for depression, which could lead to approval for clinical use. And that approval hasn't happened yet, but the hype is hyping and the money is flowing in from VCs to startups, hoping to capitalize on the increased interest.

20:0550 psychedelic companies now trade on U.S. stock exchanges, and some forecast call for the industry to grow to more than$10 billion within a decade. Still, shrooms are still considered an illegal substance federally, which is why you see these drug busts by law enforcement. But it's clearly a sign that we've entered the age of the shroom. Yeah, the shroom broom, the psychedelic renaissance, whatever you want to call it, it's definitely happening right now. I mean, Michael Blue Bay was just at the NHL All-Star Game at the podium saying, like, sorry, guys, I'm high on shrooms right now, which went very viral.

20:37So it just goes to show you kind of the level of destigmatization that we've arrived at. Another thing that I think plays into this, too, is that it's kind of undergoing what happened after kind of marijuana got legalized. You started seeing all these, like, clinics pop up and also this elegant packaging. It kind of looks like a millennial branded, all these different gummies and whatnot. And shrooms are going through that same thing. You can buy shroom chocolates. You can buy these pills now. They come in these beautiful packaging. It doesn't feel like you're getting shrooms. You don't get a dime bag of fungi.

21:08Right, exactly. So I think that we're seeing kind of like this match, maturization of the industry, and it's evident in the packaging itself. Right, and certain states have decriminalized it, which I think has also led to increased demand. Most of the seizures, interestingly enough, happened out west, 43 % of the total. And I think that's an indication because a lot of or most of the decriminalization and sort of deprioritization of mushrooms has happened out West. And I think that's where you see more of the action happening, though. Also, the Midwest weirdly had a lot of seizures as well. So it's happening there.

21:42One, the Wall Street Journal did just recently publish an article, too, about how a lot of working moms are turning towards shrooms, micro dosing throughout the day. A lot of people have said it's replacing kind of the classic glass of wine and that when you go out to socialize, you might see people just popping in a pill of microdosing streams instead of pouring themselves a glass of wine. So you are seeing it infiltrate lots of different parts of society from Silicon Valley all the way down to the suburban mom. Experts do say that, you know, maybe the hype is getting ahead of the science, which not surprising and that people are self-medicating.

22:15And while it's not the most dangerous drugs, magic mushrooms can lead to seriously bad trips and kind of just scar you for a while. So they do caution, like, be careful when you do this. It's not approved. A lot of the studies are, you know, theoretical in nature. We still need a lot more research out there. So kind of just take it easy. Take it easy. Let's move on. State slogans are not a thing that you probably think about very often. But honestly, maybe it's time you start because there is some drama that goes around these things. Take Nebraska, for instance, who is retiring theirs just five years after introducing it.

22:49Here is what they are ditching. Nebraska. Honestly, it's not for everyone, which was funny and edgy five years ago, but now it just kind of calls attention to the fact that Nebraska doesn't really have the sparkling beaches or glorious mountains of other states. Technically, it was successful, though. The director of Nebraska Tourism Commission conducted a survey of tourists and found interest in Nebraska rose from 19 % in 2019 to 39 % more recently. Also in the Portrait of American Travelers report last fall, Nebraskan had risen all the way up from dead last to 41st as the state travelers were interested in visiting.

23:24But Nebraska Governor Jim Pillen called it nonsense in a recent address, and now it's up for replacement. Neil, this whole industry of state mottos and state marketing is actually super interesting. Yeah, I think Nebraska's was so bad it was good. Because I don't know if you remember when they released it five years ago, But everyone talked about it, essentially, how bad it was. And that, in turn, it functioned as exactly what it wanted it to be. It got$7 million in media exposure alone in the two months after because everyone from Stephen Colbert to Kelly and Ryan were talking about it. So it was so bad.

23:59It was good. And it reminds me of a bunch of other debacles in the past, if you want me to run through them. Yes, please run through them because, yeah, we went down the rabbit hole of state slogans, and there are some hilarious ones. The number one thing that comes to mind back in 2016, Rhode Island, a state you know very well, released cooler and warmer as its slogan. And that was actually a huge debacle. It got the chief marketing officer for the state fired. It was the governor's worst week, according to one paper. So and I think the reason is they paid, you know, five million dollars to this marketing firm to do this huge campaign.

24:34And then they launched cooler and warmer. and then the video they put out also contained pictures of Massachusetts and Iceland. So this was a complete chaos. That's the most bizarre statement I've ever heard. Rhode Island, cooler and warmer. That is just purely nonsensical. I do want to just clarify, state slogans are not the same as state mottos. Mottos are more of a unifying message. Those don't change. Those are kind of like written in the state constitution. A slogan is tied much closer to tourism. So in Florida, the current one is must be the sunshine, which I actually stand by. that's pretty good.