Buzzfeed News Shuts Down, SpaceX Rocket Explosion, Ikea's $2-Billion US Investment

0:00Stocks? ETFs? Or what about mutual funds? Choosing your investments is easier with Fidelity. Our step-by-step experience can help you pick out the right investments for you. Plus, with recurring investments, you can decide how much and how often to invest. Lastly, there's 24-7 help if and when you need it. To find your next investment, head to fidelity.com slash trading. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSC SIPC. Good morning, Brew Daily Show. I am Neil Freiman. And I am Toby Howell. Today on this Friday show, why Starship exploding into a fireball only four minutes into its mission was not a total disaster.

0:41And there could be more Swedish meatballs in your future. Then we'll check in on an elite esports athlete from Ohio who also happens to be a mom of three. Then finish up the show with a couple of nature stories ahead of Earth Day tomorrow. Neil, it's Friday, April 21st. Let's ride.

1:03Neil, this is a blue checklist show. We lost our verification on Twitter yesterday. I don't even know if people can trust that it's us anymore. Nope, this is actually not me. This is a Neil impersonator. This is my evil twin. I was actually sad because Elon took away a lot of verifications yesterday. And I, for some reason, had deep down in my heart, like, what if he forgets mine and I'll just stay verified? Didn't happen. You're not paying for Twitter blue? I'm not paying for Twitter blue. I might, though, because I miss it. I miss my checkmark. I could not care less about my checkmark. I'm just going to quote Ice-T here.

1:34The fact that we're even discussing blue checkmarks is a sad moment in society. SMH LOL. I've never seen an SMH LOL together. I love that. All right. Before we get into the show, we got to do this every Friday. It's fast week, slow week. Toby? Neil, lightning fast week for me. I can't really put a finger on it, but this week absolutely flew by. The only slow day was yesterday, so I contemplated changing to a slow day, but I don't know what it is. I think summer's in the air, spring's in the air, and the week's flying by. Fast week for me, too. Yeah, I'm like, it's almost May. I have to get a house, you know, want to plan something for Memorial Day, and I've got to get a beach house on the Jersey Shore to do something this summer or else it's going to fly by.

2:15Just for everyone keeping track at home, I'm collecting these stats, our statistician. Six fast weeks for me versus two slow weeks. Toby has five fast weeks, three slow weeks, and we're encouraging side betting here. I'm taking the over on fast weeks for the summer. I think I'm living life faster than you. I'm gonna die earlier. All right, let's get into the news yesterday BuzzFeed announced it was cutting 50 % of staff and shutting down its news division Which is a landmark moment that sort of represents the end to a particular era in digital media And I know we've been saying end of an era a lot this week for various news stories But this really is it and so many listeners are probably wondering I didn't know BuzzFeed did actual news I thought they were just listicles and quizzes and things like that.

2:59Well, that's what BuzzFeed was when they started in 2006. But in 2011, BuzzFeed decided to aim at the big boys like The Wall Street Journal and The New York Times by launching BuzzFeed News. They initially got laughed out of the room, but this team did some serious reporting. And in 2021, won a Pulitzer for using satellite imagery to expose Chinese detention of Uyghur Muslims in Xinjiang province. So but making money from news is really hard, downright impossible. And hiring reporters around the world is super expensive. And BuzzFeed News cannot make its way to profitability. It's kind of crazy to say it now, but BuzzFeed was supposed to be the grand disruptor of media.

3:41When it first came on stage, legacy media outlets were quaking in their boots because BuzzFeed nailed the social media era of news distribution. in the sense that they knew how to get their content to go viral on these social media platforms. And so back in the day, in like the mid-2000s, BuzzFeed was the hot thing. It got a ton of VC investment, over$700 million in 10 funding rounds. It peaked at a valuation of over$1.5 billion. And yet now it's a shell of its former self. It shut down its newsroom. And yeah, it goes to show that sometimes the future of media is not always like a new trendy thing.

4:19If you build your traffic on these kind of platforms, you can get the rug sweeped out from underneath you really quickly. Yeah, they lived by social media and they died by social media because these social media companies don't care about you. They care about what's bringing in eyeballs. And right now, eyeballs are creators and vertical video. And Facebook changed its algorithm in 2022 to demote news and links from news publishers. So they put all their bets on social media distribution and that was taken from them. And now they can't get anybody to look at their content. News is not great in general because advertisers don't like to put their toothbrushes or T-shirts against Chinese detention camps.

5:02Right. It's not exactly the easiest thing to sell. And then also we've got to talk about the elephant in the room, which is AI. So in January, BuzzFeed announced that it was going to start using AI to start producing content for its website. That sent the stock spiking 150 % at the time. So people clearly thought like, wow, AI and BuzzFeed go together like peanut butter and jelly. And so they didn't really mention that in this shutting down of the newsroom. Insider actually also laid off part of its newsroom. They have recently started investing in AI, but they didn't mention it either. So it's kind of like this, is it AI?

5:37Is it not AI? Who knows how much of a role it actually played, but you've got to think it played a certain factor in these decisions to lay off reporters. We're just going to start seeing these news organizations become trying to lean into more lifestyle content and different revenue sources to subsidize news, which is not profitable. So there's this famous stat that the New York Times gets more than 40 % of its new subscribers from games, cooking, and audio. So it's and then Washington Post, I go to the Washington Post for my own research. Half of the articles, it seems, are like lifestyle stuff like cooking tips, life tips.

6:14When should I exercise six things you should do with your tax refund? That type of content is really what people are looking for. As Morning Brew knows, because we try to make the news as little as possible. You know, we try to make it consumable in five minutes or less. And on this podcast, 20 minutes. we know that like lifestyle content is what really brings in people and that's what is more safe for advertisers so i think buzzfeed news shutting down just shows how hard it is to actually run a business or a news business model in today's landscape neil you summed it up well but the only thing harder than running a business news publication is launching a rocket into space so we're going to go on to our next story uh which is the spacex launch that happened yesterday So I'm just going to paint the picture for our audience.

7:02Yesterday, after taping the show, me and you rushed out to our desks. You tossed on the SpaceX YouTube live stream, and we watched the 390-foot Starship rocket, the most powerful rocket ever bit, gleaming in the Texas sunlight. So after a few false starts, the countdown started in earnest. We got really excited. The 33 Raptor engines fired. The rocket slowly, painfully began climbing into the air. on the stream you heard people cheering we were cheering we're like oh my gosh this is so awesome for two glorious minutes it was flying through the air and then came the second moment of truth starship was about to separate from its booster and continue its journey into space but that moment came and went it kept doing somersaults in the air and after about 30 seconds it exploded into a fiery ball of stainless steel rocket fuel and elon musk's hopes and dreams yeah this was super exciting.

7:56I think what's funny is they are saying this is actually a great success. The fact that it just got off the ground in the first place. I know it was supposed to go to space and detach from the booster and land near Hawaii. But, you know, the fact that it got off the launch pad in the first place is Elon Musk's benchmark, right? He was like, as long as this thing doesn't gets into the air and doesn't melt the crap out of this cement base that we're, you know, Definitely. Basically, they were saying like, this is how science works. You need, this is a data treasure trove for us. We're going to go look through, see what went wrong.

8:33You know what I think is funny, though, is that NASA was there watching, obviously, because NASA has their fingers crossed because Starship is supposed to carry live human astronauts to the moon around 2025. So you got to think that they were at least a little bit nervous to see this thing just blow up in midair. so even though everyone's saying like yes this was part of the plan it's part of the process you just know that jarring nasa was like oh no like did we really mess up here but yeah they considered it a success and why is starship so important it's really like this huge we've talked about this earlier this week but i want to reiterate like how much of an unlock this is for space and maybe this is an exaggeration but i was thinking about the 19th century and you want to go west you're living on the east coast and you're like well i can only well i got this horse and carriage i can only take this much stuff with me it's going to take me forever that's pretty perilous journey and then all of a sudden you get this train coming along can take so much more stuff it comes back and forth it's reusable so you don't have to build a new train from scratch every time and that's really what starship will do for space travel you can take so much bigger payloads you can take so much more cargo you can reuse them so it's so much cheaper so maybe this is space's train moment and maybe i'm exaggerating the crap out of this but no i think that the this seems what what like this is the moment that space travel has been waiting for for a long time i think the analogy plays neil that that worked quite well um finally we just have to talk about the space lingo because this is what everyone was making fun of on the internet yesterday how they say the explosion was a rapid unscheduled disassembly i know and so you gotta love how the scientists i don't know if it's spin zone because everything has a technical term right right and so that we all know now that explosion is a rapid unscheduled disassembly and as it was kind of doing these somersaults and looking bad with the guy on the live stream the technical engineer was like obviously this is not a nominal situation so these are two new vocab you can apply that to your dating life you didn't break up you just actually had a rapid unscheduled disassembly of your relationship all right uh so the takeaway here starship performed admirably in its first orbital launch and they're hoping to do another one in a few months, but the time is ticking to 2025.

10:43All right, next story. For anyone who loves to complain, why isn't there an IKEA in my city? Well, there could be one soon. The Swedish furniture giant, which by the way, is the largest furniture retailer in the world, is planning a 2.2 billion expansion in the next three years in the United States. That's its largest ever investment in any country and will lead to 17 more stores opening. The idea here is Ikea senses blood in the U.S. furniture market, and it thinks it can gain market share in the States right now. In a few years, it expects that U.S. will overtake Germany as its largest country in terms of sales.

11:16That tidbit was really surprising to me that Germany is their biggest market right now. I mean, it's one of the larger economies in the world, but that kind of took me by surprise. Also, what took me by surprise is that ikea already has 51 stores here which is kind of a lot considering just how big they are like they're very they're very noticeable you mean like uh the where you mean like their size of their store their literal size of their stores are gigantic it's like the size of rhode island and we honestly learned an interesting fact about the corporate structure of ikea ikea is technically a franchise and so where it gets complicated is that one franchisee called the inca group is represents 90 % of IKEA sales.

11:58So it's basically like one company is franchising most of IKEA's. But technically, you and me, Neil, could pull some funds together, open a little IKEA store. And I don't know if there's a lot of room in Manhattan, but we could find a good spot somewhere. I'm surprised you figured that out because we were looking to IKEA's organizational structure. It is so complex. My little brain could not comprehend it. If any of you want some homework this weekend, just Google Ikea's organizational structure. And it is so confusing and complex. Yeah. I can't understand it. It's kind of like their stores. You can get lost in it forever.

12:33But the key here is that it is not a publicly traded company and they are very conservative with their cash. They do not take on debt. This is like the Dave Ramsey of companies. They are very conservative. They don't spend more than they can make. So the fact that they are spending 2.2 billion is actually a big deal. And they're looking at what's happening in the U.S. furniture market right now. Wayfair lost 1.3 billion last year and lost 5 million customers. Home Depot misses sales expectations for the first time in Q and since 2019 last quarter. So people, Americans are pulling back their spending on, you know, the great furniture revolution, home furnishing revolution of COVID is kind of over, but, and there's maybe recession fears that people are pulling back their spending, but Ikea says, okay, you can, you can get this nice little lamp for a little bit.

13:18So you're going to come to Ikea and maybe not more expensive options. I'm excited. I love Ikea. I can't wait to see them popping up more. Okay, before we jump into our next story, we're going to take a quick break. The holidays mean more travel, more shopping, more time online, and more personal info in more places that could expose you more to identity theft. But LifeLock monitors millions of data points per second. If your identity is stolen, our U.S.-based restoration specialists will fix it, guaranteed, or your money back. Don't face drained accounts, fraudulent loans, or financial losses alone.

13:52Get more holiday fun and less holiday worry with LifeLock. Save up to 40 % your first year. Visit LifeLock.com slash podcast. Terms apply. This is a real good story about Bronx and his dad, Ryan, real United Airlines customers. We were returning home, and one of the flight attendants asked Bronx if he wanted to see the flight deck and meet Captain Andrew. I got to sit in the driver's seat. I grew up in an aviation family, and seeing Bronx kind of reminded me of myself when I was that age. That's Andrew, a real United pilot. These small interactions can shape a kid's future. It felt like I was the captain.

14:26Allowing my son to see the flight deck will stick with us forever. That's how good leads the way. Okay, Neil, we're back with our favorite Friday segment, Stock of the Week and Dog of the Week, where we take you through one company that performed really well in the last week and one company that performed not so well. And as always, I have to give our little financial advice disclosure. This is not financial advice. We are simply humble podcasters. Not so humble. But we are podcasters. And we're not financial advisors. And we're not verified either. Okay, I have Stock of the Week this week. I get to tell you about something, a company that did very well.

15:02And today's Stock of the Week is Las Vegas Sands Corporation. Now, you can probably tell from the name, but Sands is a casino and resort operator. that has properties all the way from Las Vegas to the Far East. Its stock is up nearly 8 % over the last five days as it's ridden the bounce back from COVID quite nicely. So the real moneymaker has actually been the revival of Macau. So Macau is this autonomous region located on the south coast of China. It's basically like Las Vegas on steroids. The casinos are bigger, more ornate. The gambling there is even bigger, and it's a major moneymaker for companies like SANS.

15:39So here's the kicker, though. SANS revenue jumped 125 % in the first quarter, and Macau isn't even close to fully open yet. 31 % of Macau hotel rooms are still out of service. The ferry capacity is still not fully to the region. And then the Macau airport passenger volume is still at just 39 % of 2019 levels. So it's got a long way to run. It does, but there's always this cloud hanging over Macau that Chinese authorities are going to crack down and extract more revenue from them. I remember there was this ruckus a couple of years ago, even before COVID, that, you know, they clamped down on all of these casinos and it caused all of these casino companies to go poof.

16:18But it is really interesting just to look at Macau. And I think it does three times the amount of gambling revenue as Las Vegas because you have these high rollers coming in from China with really high intent to gamble. Yeah. Because I think, you know, they're kind of the same size. But Las Vegas, you have a lot of families coming in. You go see a show. You go see Cirque du Soleil. You do all these other things and gambling might be a side option for you at this point. And Macau, it's like you're going there and you hit the back rat table. No, you're totally right. I watch poker online a lot and some of the biggest games happen in Macau.

16:51So I've been very familiar with the Macau poker scene for a while. It's a wild, wild place with incredible characters for sure. I got to go. I'm not good at gambling anyway. My dog of the week, the stock that did not perform very well is WeWork. God, WeWork. The co-working company is facing delisting on the New York Stock Exchange with its stock closing below$1 on average over a 30-day trading period. Its stock is currently at$0.48. That is not good. WeWork shares are down 65 % this year, and its market cap has fallen to$361 million. To put that in perspective, right before founder Adam Neumann tried to take it public in 2019, it was valued at$47 billion, which I know no one actually believed it was worth$47 billion, but someone paid to invest in it.

17:37SoftBank, at a$47 billion valuation. Meanwhile, Adam Neumann, long gone from the company, raised$350 million for his new real estate adventure. So he raised about as much as WeWork is valued at now. You can't write headlines like that. You gotta love that. The news gods shine upon us sometimes. Honestly, WeWork is kind of the anti-IKEA in the sense that it is just loaded with debt. So last month, it closed on a deal to restructure more than$3 billion in outstanding debt. So it just spent so much money on these office buildings. It plowed money into them to give it the WeWork aesthetic that we all know and love.

18:14And it just is being weighed down by that. And SoftBank, man, they're still plowing money into it. Really? They lent the company$250 million in January. So they've increased. They basically have totaled the amount of money that they put into it is$10 billion at this point. It's basically gone to zero. It's really tough for them. I was, I have to admit, I was extremely bullish on WeWork when all this pandemic stuff happened. I was like, all these companies are going to pay their employees WeWork to have their employees go to WeWork's in these satellite offices. And people who are in their bedrooms are going to be like, I don't want to work here anymore.

18:51Oh, I can just go to a place where there's coffee and cucumber water and people around that I can see. So I was like, oh, WeWork's going to capitalize on this. This is great for them. And you're kind of right. Just the final point on this is it has 682 ,000 memberships at the end of last year, which is the most in its history. So it actually is riding that wave that you described. It just has too much debt to get out of. So I think there's light at the end of the tunnel because they have a ton of members. But we'll see if they can get out from the weight of the debt. They might not be a public company for longer.

19:22Okay, Neil, we're going to totally shift gears here. And I want to tell you about someone named Erin Rodin. She's an ordinary person from Columbus, Ohio. She works at a roofing company. She's a mom of three kids. And she's also the top-ranked player in the semifinals of the largest Candy Crush tournament in history, which she entered by accident. So there's a lot going on in that story. But basically, she is this mom who loves playing Candy Crush. She accidentally hit enter on one of those tournaments. You get this pop-up all the time on Candy Crush asking if you want to join a tournament. She pressed it, and now she is absolutely demolishing the competition.

19:55her son actually posted a tweet on twitter that went viral saying my mom is this incredible candy crush player and now it's being picked up and covered by a lot of these outlets amazing story i love her yeah i don't really know much about candy crush but i'm curious about when you your candy crush peak happens because i know that chess players peak at like 19 you know like early 20s late teens yeah and you kind of lose your skills as you go along but maybe as you maybe your candy crush skills grow as you get a little older she's played she's been playing for the last 10 years she said and so she's clearly put a ton of hours in and she grew up a gamer she used to play the funny quote from these articles is that she grew up playing like player versus player games and she used to love her words demolishing players but now as she's aged and has become a mom she's like i like candy crush more because i don't get that rage in me that that happens from playing against other players she said that wordle was too easy i know i love her she's great and then And I just want to talk about how big Candy Crush still is because I know everyone knows Candy Crush, but it still currently has 270 million players.

21:02It generated 1.2 billion in 2021. And it's also just an absolute moneymaker for King, which I'll let you say the fact. But thank you. Yes. King is owned by Activision Blizzard and Microsoft. It wants to buy Activision Blizzard for$69 billion. and Xbox's CEO said that Candy Crush was the main reason why Microsoft wants to buy it. Unbelievable. And they make Call of Duty. Everyone was talking about Call of Duty as being the biggest thing here and there you have a Microsoft executive just saying it like, yeah, we're buying it for Candy Crush. These mobile games, man, they just rip. So congrats to Aaron.

21:41I hope she wins the whole damn thing. It's a$250 ,000 prize pool tournament. When is this happening? I mean, it's over like the next week. It's a long tournament. So hopefully we get a headline coming Probably crushing energy drinks. I know that Aaron took it down. All right. Finally, Earth Day is tomorrow. And as Lil Dicky says, we love the Earth. So let's run through some climate and environment headlines from some recent news. I want to start us off with the Great Pacific Garbage Patch that just underwent a snazzy rebrand. So the Great Pacific Garbage Patch typically refers to an area of the Pacific Ocean between California and Hawaii in which floating trash kind of concentrates due to factors like wind and current.

22:22So it's this big old trash soup, but a recent study has found that the garbage patch has actually become a thriving ecosystem where hundreds of sea creatures and marine organisms make their home. So scientists went and started taking pieces of trash from this and studying it. They found 46 different species of invertebrates living in the patch, many of which are typically only found in coastal areas and that previously were thought couldn't survive in the open ocean. So suddenly this bad thing, objectively bad thing, scientists are saying like, wow, it's actually created this totally new and unique ecosystem.

22:57That was the main takeaway that the fact that we're polluting is kind of changing the way that organisms interact with each other. So the fact that these coastal, these animals that lived near the ocean, lived in the middle of the ocean and the animals that lived near the coast had kind of developed their own ways of life for millions of years. And then all of a sudden we start throwing trash and microplastics into the ocean. And like millions of years of evolutionary biology is kind of just getting thrown out the window and they're coming together. This makes me so bullish on nature. It's ridiculous.

23:30They can adapt. Unbelievable. These are truly, you said it right. Like these have, in a million years, they will never, ever interact. And now they're co-living together. like these sponges, these oysters, these things that shouldn't be there have just totally adapted and can live in the open ocean now. Maybe it's survivor bias, though, and there's another garbage patch where the coastal marine organisms and the open ocean ones devoured each other, and we just don't know about it because they all died. But I do love this quote from the study author. He was like, they're having a blast. I know.

23:59They're having a blast. Scientists are having a blast, too, because they love this stuff. Garbage patch, not always a bad thing, but sometimes a bad thing all right finally let's discuss the california melt and i'm not talking about the avocado and swiss sandwich this winter while we were state while we stayed mostly dry over here on the east coast california got absolutely hammered by snow the snowpack there on april 1st was 233 above average you remember all those headlines about sierra nevadas getting like feet and feet and feet of snow were just snowed in yeah but spring has arrived and this snow is going to melt and it doesn't just evaporate.

24:37Unfortunately, there are trillions of gallons of water in the Sierra Nevadas right now that are going to rush into rivers and reservoirs and create potential flood conditions in areas that are already soaked to the brim from the winter. I mean, poor California. It goes through droughts and then it gets a ton of snow and now it's about to undergo floods like they cannot catch a break. The one thing that is catching a break is all these reservoirs that have been under drought pressure, Lake Mead being a big one, which is in kind of the Nevada desert area, they are expected to see a rise of 1 ,068 feet by the end of the year.

25:09And this is a lake that has been under a ton of pressure. The level dropped so low that bodies were being exposed, like volcanic rock that we haven't seen in years were being exposed. So hopefully it does kind of replenish those reservoirs, even though there's so much water that it's going to cause some mayhem and destruction as well. Yeah. You just hope this doesn't cause disruption to california's big agricultural economy uh you could we could be going to the store the grocery store in a few months from now and strawberry prices will be 11.99 and they'll be like we yeah we just got flooded sorry yikes so the winter snows like will have an impact throughout the next few months so this winter this crazy winter snow pack will just be living with us for a long time especially people in california that is our friday show you You can always reach us at Morning Brew Daily at morningbrew.com.

25:56We hope you have an amazing weekend. Let's roll these credits. The show's producer and editor is Emily Milliron. Our supervising producer is Bryce Beloff. Dodgeball champ Macy Gilliam and Raymond Liu are associate producers. Dan Bowser did something important for the show. I'm not 100 % sure what. Hair and makeup underwent a rapid, unscheduled disassembly and is floating somewhere in the Gulf of Mexico. Devin Emery is our chief content officer. Our show is a production of Morning Brew. Great show today, Neil. We wish you all well. Thank you.