Cava Crushes In IPO, Has Pixar Lost It's Fastball? & Ticketmaster Gets Honest

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'm Neil Freiman. And I'm back as not Toby. Let's go. It is a summer Friday and we got a great show for you.

0:38There finally was a big IPO on Wall Street. We'll discuss whether more are coming. And did Ticketmaster do something not horrible? We have a phenomenal show today. We're also going to talk about is Pixar washed up and why you shouldn't go to the Harvard morgue. Today is Friday, June 16th. Neil, let's ride.

1:02He's back. Not so. Not Toby. The artist formerly known as Kyle Haggy is filling in for the real Toby, who is hanging out with his bros at a bachelor party in Big Sky, Montana. Kyle, always great to have you back here. Super pumped to be here, and Toby kind of stole my spot. I love Big Sky, Montana. You're such a Big Sky guy. Yeah. If you were to plan his itinerary, what would you do? You've got to go to Ouzel Falls for a hike. It's a beautiful waterfall hike. You've got to go golfing on their course. You've got to go to Beehive Basin Brewery for a beer, and then you have to randomly see Tom Brady just roaming around the streets.

1:37All right, Toby, if you're listening to this, which you better be, definitely follow Kyle's advice, but I'm sure you have some awesome stuff planned. I'm not concerned about the golf. I'm sure that many rounds are booked. Yeah, I'm sure he's got that covered. Toby and not Toby can never be in the same spot. We'll see because I'm planning actually on taking a day off. This is the craziest thing next month. So we're going to see whether Toby and not Toby. Does Morning Brew know this? I don't think you're allowed to take a day off. We'll figure it out. All right, let's go to our first story. Wall Street was just drowning in tzatziki and hot honey chicken yesterday as Kava, the Mediterranean fast casual chain, went public.

2:14This IPO was seen as a milestone for an IPO market that had been as dry as the Atacama. And Kava did not disappoint. Shares popped 99 % in its first day of trading, reminding us of those IPO golden days just a few years ago. So this successful IPO could really open the floodgates for a bunch of companies that had been waiting in the wings, but were too afraid to go public because of tough market conditions. But after seeing Kava double its value on the first day, get ready, because I think there could be a parade of IPOs hitting Wall Street over the remainder of the year. Kyle, you spent the entire night reading Kava's public filing.

2:52What are your main takeaways about this company? That's probably the saddest thing I've ever heard is actually having fun reading an S1. But if you've never read an S1 before, definitely check it out. The S1 is the— You have to file it to go public with the SEC. It's about 1 ,000 pages. But the first 100 are really all you need to pay attention to. Before I go into some fun stuff in the S1, I've got to say I've never had a good Kava meal. I'll be honest. So if the audience wants to tell me what I need to order to get on the Kava train, please let me know because I've been a bit of a Kava hater.

3:22But shout out to them for their IPO. But five interesting things from the S1, Neil. The first is how every business, not just a restaurant, but they have CPG. They're selling stuff in store. And their app, they had the third fastest growing restaurant app year over year. So much of the restaurant experience is now moving to apps for delivery or for pickup. The second is them talking about the threats of social media. TikTok might be banned. They have an active presence there. And they're like, if we partner with celebrity influencers and then they do something bad, this could hurt our brand. It's like anybody who partners with influencers, though.

3:59Maybe the funniest thing they said was, we have a history of losses, and especially if we continue to grow at an accelerator rate, we may not achieve or maintain profitability in the future. So one of the risks is they don't make money. And then it really talked about just how hard running a business is. Labor shortage, cybersecurity tax, pandemics, and they even mentioned the failure of a bank that they banked with is a threat. But the last thing I want to shout out is their marketing department. They spun having 38 ingredients as meaning they have 17.4 billion combinations of food. Give it up to the marketing department there.

4:30That is incredible. And of those 17.4 billion combos, you can't find one you like. Yeah, I've only tried three. So I have a 17.3999 billion left to go. So, yeah. So this is a very interesting IPO because it's in the restaurant sector. And you can look at some various comps to see how Cava may go in the future. On the top end of the spectrum is obviously Chipotle. This is the industry standard. It went public back in 2006, and its stock has grown 4 ,700 % since then. So if you invested$1 ,000 in Chipotle's IPO, you'd have almost$50 ,000 now. Its market value is$57 billion. This is a behemoth. On the other hand, you have Sweetgreen, which went public in 2021 and has been kind of treading water.

5:19I mean, I think it's only worth$1.2 billion right now. Its stock is up 25 % this year, but it still just hasn't seen much growth in the public markets. Where do you see Cava fitting in on this spectrum from Chipotle to Sweetgreen? I got to say, I'm going to call it now closer to a Sweetgreen stock. Why? Because you don't like it? I don't like it. I don't know enough about it. So I'm going with sweet green here. And Chipotle is just, it's harder to throw in Chipotle. They're a classic. So you hope that this, so I talked about this at the beginning, but this is kind of seen as a milestone event for an IPO market that had been so dry.

5:57Last year, there were only 71 US IPOs that raised$7.7 billion. Go back to 2021, the SPAC heyday. There were 397 listings that raised$142.4 billion. So we'll see whether there are other restaurant chains like Panera and Fogo de Chow that are thinking about going public. And then you have other tech companies like Reddit, Instacart, and Stripe that have also been putting off IPOs as the Fed raised interest rates. And the market kind of tumbled. But the market is raging right now. So we'll see whether they come forward. It'll be cool to see if we have more IPOs. And I think I'm going to SPAC my local pizza place, Gotham Pizza.

6:39They need to go public. They're crushing it. Neil, let's move on to an interesting story here, which is the quote-unquote Pixar slump. So Pixar, owned by Disney, is the world-renowned animation studio that has brought us all the hits, Toy Story, Incredibles, Coco, and The Often Slept on Bugs Life. Hashtag Bugs Life Nation. That is a great film. But recently, Pixar and Disney kind of in general have been perceived as having a slump. Their new film, Elemental, is hitting the box office this weekend, projected to just take in$31 to$41 million. That would actually be among the lowest debuts ever for the animation studio.

7:16And it cost$200 million to make and tens of millions more to market. And then zooming out, it's kind of like their last four films have been duds in terms of monetization. They had Onwards, which was actually hit by the pandemic. Probably my least favorite movie ever. Yeah, maybe we'll talk about that. Soul, Luca, Turning Red were all on Disney+. And then Lightyear, it did$226.7 million in international box office, but it also made us look at a semi-human Buzz Lightyear. So that was just a big no. To top it all off, they're delaying major releases like Star Wars and Avengers. So Bob Iger, the return as CEO, it's not going super smooth.

7:55Neil, can they turn it around? And is the Pixar slump real? Well, I Googled Pixar slump because this is honestly the first I've heard of, you know, Pixar kind of losing its fastball a little bit. Turns out people have been writing off Pixar for 10 years. If you Google Pixar slump, you will see articles going back to 2011 saying, you know, as Pixar lost its mojo, Cars 2 was the worst thing I've ever seen. And then there are an equal amount of articles rebutting those claims, being like Pixar is doing just fine. Like, don't believe the narrative of a Pixar slump. Toy Story 4, released in 2019, brought in$1.1 billion.

8:34That's like the second highest grossing Pixar movie ever. So it's shown a lot of resilience. Like you mentioned, I think the pandemic was really, really bad for it. Those movies that were released did not do well on Disney+. They weren't widely viewed, even if they were critically acclaimed. So I don't know. It feels like Pixar is a little bit in its Instant Pot era. I don't think and what are the instant car instant pot CEO say he was like you can't be a phenom forever It just doesn't happen. Like that's not the way the world works So, you know Pixar may just be now just one of a stable of really good animation studios It's it just won't be what it was in the late 90s and early 2000s with Finding Nemo WALL-E Monsters.

9:19It's heyday. I I think I agree like I think they're just like to quote DJ Khaled suffering from success Like we're comparing them to the post Pixar. They're the LeBron James of this industry Like you keep saying they're they're gonna be washed up. It never actually happens and there's some incredible stats from from Pixar the studio's 11th film Toy Story 3 first film animated film to make over a billion dollars In 2011 picture revealed it sold over ten billion dollars of cars merchandise So this isn't just films they have incredible IP that can go to different sectors It's won 11 of the past 18 awards when it comes to best animated film.

9:59At the Oscars. And at the Oscars, correct. No other studio has claimed more than three victories. And then this is a mic drop. Pixar director Pete Docter has personally won the award three times. No other animated studio has more than three victories. I think he did Elemental. They're incredible. All right. Before we leave Pixar, so both of us are not writing off Pixar. I think that is the takeaway here. What is your favorite Pixar movie? And you kind of hinted at it, but I think the most underrated is Bugs Life. My favorite, Ratatouille. Yeah, I was going to say the I mean, I was going to say the same thing.

10:32Yeah, I would say the best movie is Toy Story. Just the best movie. Yeah. Just judging it as a movie. My favorite is definitely Ratatouille. I mean, a rat there in Paris. You got to love that. OK, I just I could talk about Pixar for the whole show, but we have to move on. And Kyle, buying concert tickets is going to suck just a little bit less now. Yesterday, executives from Live Nation, Airbnb, SeatGeek, and other companies were at the White House meeting with President Biden. And they announced a big change for consumers. They're going to make the fees you pay way more transparent. They're not dropping the fees.

11:08Don't get that idea. But at least you'll know them ahead of time, which I guess takes the sting off a bit. So what does this mean in practice? So no more buying a concert ticket, only to find out that the price jumped by$75 as you're about to check out. The price will just be$75 higher when you first look at the ticket, which is great. Let's talk Ticketmaster, public enemy number one because it botched the Taylor Swift ticket roll out last November. So starting in September, a few months from now, Ticketmaster's parent Live Nation will display all-in pricing up front at its more than 200 venues in the U.S.

11:42Of course, this transparency push is not because these companies are feeling sorry that they misled us for the past couple of years to get on the good side of the president, who's made getting rid of junk fees a main part of his agenda. He even brought up junk fees at a state of the union address in February and pushed for legislation, curbing this super sketchy practice of tacking on extra costs every time you buy you try to buy something online. So this is a win for his war on junk fees. Yeah, I think this is a great, honestly, consumer regulation. Breaking news. People just want to know what the actual cost is.

12:15I know Airbnb has also rolled out some tools where you see the actual cost, you know, including the cleaning fees, service fees, take out the trash fee, et cetera, et cetera. So this is great. And I think it's because also so many people are going back to events now that we're all seeing it. The Wall Street Journal dubbed 2023 the year of the thousand dollar concert ticket. I know you were wearing your Taylor Swift sweatshirt earlier. And event attendance has been up 24 percent in 2022 compared to 2019. So there's more eyeballs on these practices now. And they're finally turning the corner. I didn't think.

12:44Yeah. Like in the past, we weren't talking about concert tickets as much as we are. Every every other news story is like, yeah, what's going on with concert tickets? This stadium, this tour, blah, blah, blah. It's just like it's kind of all new. Yeah. Something something that's just. We just all like the forefront of the consciousness started liking art more or something like that. Or maybe this is all comes back to Taylor Swift. You know, Ticketmaster is not out of the doghouse, though. It's got investigations into it, not over transparency fees, but over its monopoly status. And new analysis shows that 64 percent of the top 100 amphitheaters in the U.S.

13:20are operated by Live Nation and 77 percent use Ticketmaster as their sole ticket provider. So this is a little PR win for them, but I mean, they're still getting probed by many different regulators and we'll see whether any antitrust action is leveled against them. Yeah, they're definitely not in the clear yet. All right. After this, we'll take a quick break. 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.

13:56I 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. Allowing my son to see the flight deck will stick with us forever. That's how good leads the way. Shopping is hard, right? But I found a better way. Stitch Fix online personal styling makes it easy. I just give my stylist my size, style, and budget preferences. I order boxes when I want and how I want. No subscription required. And he sends just for me pieces, plus outfit recommendations and styling tips.

14:30I keep what works and send back the rest. It's so easy. Make style easy. Get started today at stitchfix.com slash Spotify. That's stitchfix.com slash Spotify. All right, Neil, let's move on to our famous segment, Stock of the Week and Dog of the Week. But before we do that, let me preface so we don't get sued. We are not financial advisors. This is not financial advice. In fact, this is not even general advice. Don't listen to me. I have a philosophy major. I'm about to talk about money. I don't know what I'm talking about. With that being said, let's get into it. Breaking news. Toyotathon is back, baby.

15:07Toyotathon, maybe it's always been here, but Toyota stock is absolutely ripping. It's having its best week since 2009, following the company disclosing plans for its next generation electric vehicles. and shareholders voting in favor of new leadership. Shares of Toyota on the New York Stock Exchange hit a new 52-week high Thursday of just about$169 per share. Part of the excitement about this is the company getting more aggressive with its EVs, coming out with some solid state batteries, which I don't know what they are. They're like just better than lithium-ion batteries, which EVs use now, and they're prone to like blow up and stuff.

15:44So this is seen as the next gen battery for EVs. And the fact that Toyota is going to release cars with it is hype. This is why we have Neil around. He knows everything. So they got better batteries coming out. And I also think this is great because, like, the Toyota Prius was like the OG. I feel like they should be leading this. And so that's my winner of the week. It's also quite interesting looking at how much stocks have been up this year. Tesla is still by far the best. They're up 108%. Toyota is up 23%. So they have some catching up to do, but they're ripping right now. Toyota is seen as a very boring stock.

16:19Yeah. And you're not like, oh, I need to go buy some Toyota shares. And no one's like trading Toyota stock. Very calm. So the fact that we're even talking about Toyota stock means that they're doing something relatively exciting. Yeah, they kind of, you know, they released the Prius, which is this hybrid and super, obviously, the model for all hybrids. And then they did not push aggressively into electric vehicles like virtually every other automaker. Their investors were saying, what are you guys doing? Like this is the way the this is the way the industry is moving and you're kind of just sitting on your hands So the fact that they are investing all this money and R &D into producing new batteries and new vehicles is super exciting for investors And I also read that they are Making like fake gear shifts and in their new EVs trying to make it feel like a manual transmission And that got a lot of blowback actually because they're saying people were like just embrace an EV EV doesn't have gears.

17:16It's a completely different car than an internal combustion engine. And you're trying to, you know, try to tow the line between pushing forward and still having people feel like it was a manual transmission or it's an old car. And they even, what else did they do? They're blasting in the sound of engines. Right, sound of engines. People are used to that. And I think they're trying to make consumers comfortable with, you know, what they've come to expect from a car, even though it is an EV. And they even what I was going to say is you can even pretend to stall out in these companies or in these EVs.

17:50I love it. I don't know. That was a little cringy. Let's go to our dog of the week, which is Twitter. Even though it's not a public company, you'd have to think its stock would be down after the week. It just had here are just a couple of things that happened. Twitter is refusing to pay its office rents. And finally, that's catching up with it. it's going to be evicted from its Boulder, Colorado office because it's behind on rent for three months. First of all, I did not know that Twitter had a Boulder office to begin with. Apparently there were 300 people working there, probably a lot less now with remote work and layoffs.

18:24But still, it is not going to be having its office there. And it's still not paying rents on a bunch of other offices in San Francisco and New York. So we'll see what happens with that. The other piece of rough news is that Twitter is getting sued for more than 250 million dollars for by major music publishers who are accusing it of fostering massive copyright infringement. According to the publishers, Twitter is allowing unlicensed music to spread freely on its platform, citing specific songs such as Hey Ya, Uptown Funk and All I Want for Christmas is You. This is not legal. And other social media companies don't allow unlicensed music to be posted on their platforms.

18:59that's the reason that we can't play you know hey yeah on this podcast right now we would love to but we would love to but youtube would take it down and twitter has not been taking it down so new ceo linda yaccarino has been on this job for less than two weeks and just the her job just keeps getting tougher every every day yeah i'm also going to have to sue twitter mainly elon for plagiarism because he said on a meeting he would only pay rent quote over his dead body and that's also what I just texted my landlord the other day. I don't know. How do you get away with not paying rent? I guess you don't.

19:32Like, you literally have to pay. Real estate isn't free. So they're going to have to evict this whole office. Like, practically, I'm very interested to see how that goes down. I mean. They're just going to come in, like, take a bunch of computers out. Just like a normal eviction process. I don't think anyone's working there anyway. Yeah. All right, let's move on to baseball. There's been a lot of momentum for the Oakland A's to relocate to Las Vegas. That move just got a major boost this week. Nevada's governor signed a package that tees up$380 million of public funding to help build the new stadium for the athletics on the Vegas Strip.

20:07A's fans are not happy about their team leaving and mounted a last-ditch attempt to keep the team in Oakland on Tuesday. This was super interesting. They staged what's called a reverse boycott. They packed their usually empty stadium in Oakland with more than 27 ,000 people. The point was to pressure the team's owner, John Fisher, to sell the team and keep it in the East Bay. From what I understand, though, the forces pushing the A's to Las Vegas are just too powerful. There's too much money at stake. So it appears this train has left the station now that Vegas has the public money to spend on the stadium.

20:40That's what I want to focus here, actually. Taxpayer money used for sports stadium is a raging debate in cities across the country. There's a lot of division about whether this is a good investment. Is it smart economically to invest public funds into sports stadiums? Do you actually see a return on your investment from all the activity generated during game day? Or is it instead just like a vanity play? You see your city's name on TV and you do the whole rah-rah thing. But actually those funds could be spent better elsewhere than subsidizing billionaire sports owners. Right. Yeah, I do. The research I have seen, it's like it's not super.

21:14It's not a big boom economically. It is a bit of a vanity play. Totally. I do feel for these like smaller market teams, though, that have all of this pressure of like, hey, we'll leave unless you fund this stadium. So I do feel for the Oakland A's. The Vegas market, though, is so interesting. There was a stat in this article where they expect to bring an average of 27 ,000 fans per game for the new A's stadium in Las Vegas, with 30 percent of those tickets going to out of towners. And so Vegas has this unbelievable ability to bring people from all over and then funnel them into stadiums. Obviously, they've gotten a WNBA team.

21:51They've gotten the NHL team. They just won the championship. So this Vegas sports play is really booming. And I think it's maybe working out for Vegas, but that's a particularly interesting market because it's known for gambling. Yeah. The economic literature on using public funds to subsidize stadiums is pretty – there's a consensus in that it is not worth it. You do not see a boost in local incomes. And one of the analysis was saying that for Vegas, for this to work out, they would have to bring in people from out of town to come to a Las Vegas athletics game to spend money there. And only in that situation where you're bringing people from out of the area does this make economic sense.

22:33And then, you know, when you look at all of the other entertainment options in Las Vegas. Should I go to Cirque du Soleil or the athletics game? Just going to a baseball game kind of win out versus all the stuff you can only do in Las Vegas, like Cirque du Soleil or lose all your money at Caesars. Right. So that's the only way it'll work out. But they paid, you know, they have there's a precedent here. They spent seven hundred and fifty million dollars in taxpayer funds on the new Las Vegas Raiders stadium. And then in Tennessee, Tennessee Titans and Buffalo Bills also just are they are building new stadiums with taxpayer funds.

23:10The one stadium recently that did not use any taxpayer money, SoFi Stadium in Las Vegas. The owner of the L.A. Rams, Stan Kroenke, paid for it himself, cost more than$5 billion. And he's having himself also a hell of a year. So let's move on to the last story here, Neil. I want to end the show on a light note. It's just some good vibes to get going into the weekend. So let's talk about the Harvard morgue manager that was selling body parts that had been donated to science. So a former manager at the Harvard Medical School morgue, his wife and three other people were indicted in the theft and sale of human body parts.

23:51Federal prosecutors in Pennsylvania announced Wednesday this guy has basically been taking some body parts, heads, brains, skin and bones, back to his home where he lived, selling them to people. also letting buyers come to the morgue to check out. So we had some multi-channel. You got to have a brick and mortar presence. Yeah. So, you know, good entrepreneur, I suppose. But one of the people buying the body parts owns this place called Cat's Creepy Creation. So in terms of like who saw this coming, okay, red flag number one. Red flag number two is while they were making these transactions, they were paying for it over PayPal with memos like head number seven and brains.