Why Ketamine Startups are Struggling & Travis Kelce is King of Game-Day Ads

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0:28Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Matthew Perry's death from ketamine highlights the risks of a booming treatment for depression. Then Uber is joining the S &P 500 index. We'll tell you what that means for you in just a bit. It's Monday, December 18th. Let's ride.

0:52Toby, I'm feeling extra devious this Monday morning and I want to break everyone's brain with a philosophical riddle. So there's this thought experiment called the Ship of Theseus, and it raises the question, if all of the components of an original object are gradually replaced, is it still the same object? The ancient Greeks first pondered this after a ship belonging to Theseus was replaced part by part over centuries until none of the original material was left. Well, how's this for a meta twist? The Wikipedia page for The Ship of Theseus, which first appeared in 2003 and has been edited over time, now contains none of the phrases from the original article.

1:33So, Toby, is it still the same Wikipedia article? My brain has been in a pickle all morning thinking about this, but I think it is the same because the nature of a Wikipedia article is to be ever-changing. That's the very essence of it, that people can come in and edit it. So I think the fact that the essence or the thing that makes it it hasn't changed, that means it's still the same article. What's your perspective, though? I agree with that. I was going to go something a little more technical in that it's the same URL. It's the same title. So you're going to the code. I'm just going straight to the code base.

2:07If it's the same code base, then we say it's the same article. I looked up, and I think Aristotle has the same position that I do. And I arrived at that same conclusion independently. independently so some are saying that i'm the modern day air cell some some okay before we jump into the news quick shout out to our friends over at yahoo finance so christmas is coming up and if you're like me and leave your christmas present shopping till the last minute i have an idea for you if you say give the gift of yahoo finance what if you gave the gift of yahoo finance you mean to tell me you're going to get a loved one access to the internet's number one finance platform trusted by over 150 million visitors globally each month.

2:48Yep. But it's free. Even better. Help people secure their financial freedom without breaking the bank. I pity your family, Toby. But I guess head on over to finance.yahoo.com if you need a last minute Christmas gift or download the Yahoo Finance mobile app to get it directly on your phone. Tonight on NBC, Jimmy Fallon and Bozema St. John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They 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.

3:24We'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. Everyone's favorite cash-burning startup has finally grown up. Uber is officially joining the big kids table and will be added to the S &P 500 index as of today. Joining the index isn't just symbolic. First of all, you need to meet certain stringent criteria from market cap size to trading volume amongst others. It's earned, not given. But the big ripple effect that you all should care about is that Uber will now more than likely appear in your portfolio.

4:02Most of the retirement accounts, 401ks, Roth IRAs, etc., etc., have some sort of index fund that tracks the S &P 500. So now that Uber has joined the S &P party, it means it's probably joined your retirement fund too. Now, whatever preconceived notions you may have of the company famous for burning through cash in the early days, I would recalibrate them. Uber has reached a 52-week high earlier this month and is fresh off two consecutive profitable quarters this year. Neil, sitting at a$127 billion market cap, this is not exactly a small fry getting added to the index. I would say you said it wasn't symbolic, and I get why you said that, but I think it is symbolic.

4:42To be in the S &P 500, Uber, we know for years has been, as you said, has been losing money. But, I mean, now it's a huge company. It's been profitable. Last quarter, it's been profitable over the past year. It's secured a bunch of regulatory wins in the U.S. and the U.K. It's put a ton of distance between itself and Lyft. It has a booming eats business and delivery business outside of its standard ride hailing business. So I think so much credit has to be given to the CEO, Dara Khazr-Shahi, which I nailed his name. And so, yeah, coming from all the ways from Travis Kalanick. I mean, you saw WeWork get removed from its founder and completely founder.

5:21And now Uber is having this coming out party. It's like it's bar mitzvah, I think. Yeah, it has come a long way since the millennial lifestyle subsidy of offering very cheap rides, but burning through tons of cash. And let's just zoom out a little bit to even a year ago. Leadership was under fire. They were fighting unions to block its services. Then the company was unprofitable. Its stock fell by about 52 % in 2022 alone. So it really has been a much quicker turnaround than anyone expected. And yes, it is certainly symbolic that I feel like I grew up alongside Uber that now they're finally making money.

6:02Now they're finally joining the S &P 500. Speaking of the S &P 500, the Wall Street Journal had this really shocking article out this weekend talking about how much the S &P 500 is heavily weighted towards seven stocks known as the Magnificent Seven. I should have this memorized by now, but it's Apple, Microsoft, NVIDIA, Tesla, Alphabet, and Meta, and Amazon. they have jumped 75 % in 2023, and the other 493 companies have just increased 12%, while the index on the whole is up 23%. So you really have seven companies bringing the whole thing up. They account for nearly 30 % of its value. So Uber is coming in to a very top-weighted index that may not have so much impact because you have these trillion-dollar companies riding the AI wave to incredible new all-time highs.

6:52Yeah, if we look at the all-country world index, which is exactly what it sounds, it takes the indexes of every single country and puts them into one big one. The combined weighting of the Magnificent Seven is larger than all of the stocks from Japan, France, China, and the UK. It's unbelievable how concentrated the market is and just the global market is in these seven magnificent companies. And you pointed out to me that Apple, I think it's worth about$3 trillion now, is worth the same amount as the entire French stock market. Those poor French, man. They just got Krispy Kreme, though, so they're not doing too badly over there.

7:28Let's bring it back to Uber. Can Uber pierce the Magnificent Seven? I mean, I don't think so. I don't, well, if they get autonomous driving figured out, which has always been the promise of a company like Tesla, who is also part of the Magnificent Seven, saying that this is going to be this massive productivity unlock. I think if they can go down that path, they have a partnership with Waymo, that is potentially their path towards a trillion-dollar company. But it's hard to see them doing it in their current iteration as just a delivery of people and foods business. I see a lot of opportunity in the advertising business for Uber.

8:02I think they're about to do an annual run rate of a billion dollars a year in advertising. They have people in cars staring at screens the whole time. They can do it pretty targeted as well. So that is an area of growth for Uber. I'm not sure if they're going to get anywhere near a trillion dollar market cap or anything. But$127 billion, this is a big company. It's not nothing. On Friday, we found out from an autopsy that the late Friends star Matthew Perry died in November due to the effects of ketamine. And that discovery has led to greater scrutiny of a drug that has boomed in popularity in recent years as a treatment for severe depression and as a recreational drug at parties because of its hallucinogenic qualities.

8:40Perry, like many others, used ketamine as part of his treatment for depression and anxiety. But the autopsy report found that the ketamine in his system, which was at an extremely high level, could not have come from his last known ketamine therapy session, which was about a week and a half before he died. This renewed attention to the use of ketamine at home outside of a professional setting as it's become more popular during COVID and a bunch of online startups have emerged that ship ketamine treatments straight to your door. Ketamine has come a long way from its origins as a battlefield anesthetic in the 1960s.

9:12It's been legal for use in both people and animals since the 70s. And in 2019, the FDA approved a nasal spray version for treatment-resistant depression. But experts warn that it should only be used in supervised settings with a healthcare professional. And Perry's death at his home is a wake-up call that has sort of dimmed ketamine's rapid glow-up. Yeah, it's definitely one of those double-edged swords where, with the proper safeguards, It has been shown to help a lot of people with a variety of things. But then obviously, I think what happened was during COVID, the expansion or the relaxation of rules that allowed certain drugs to be prescribed via telehealth.

9:50It was it actually mirrors the conversation we had last week about Mifepristone, about the expanded access of certain drugs via telehealth. And ketamine was one of those that kind of got a much wider and more lax ability to be prescribed to people. And so now I think kind of this huge, huge boom times happened around ketamine. But now people are taking a step back. And this obviously puts it back into perspective again. Yeah, I should say it's really rare to overdose on ketamine. Like doesn't really, it's very rare. It doesn't usually happen. But it is an anesthetic. It is considered a general anesthetic.

10:26So if you take it in certain doses outside of a healthcare professional setting, then it can just really mess you up and cause your heart rate to go through the roof and cause potential heart attacks. There's also certainly this kind of Silicon Valley culture around ketamine and hallucinogens like LSD. I mean, Elon Musk broadcasts to the world that he takes ketamine and that there's almost become normalized to the fact that you forget that there's these still dangerous side effects and Matthew Perry is an example of one of those. There's also been a lot of money flooding into this space. In January, there was this company called Transcend Therapeutics that raised$40 million.

11:02Two other companies have raised over$100 million. Since November of last year, that kind of addresses the same category that addresses depression and PTSD and other sorts of ailments. Yeah, I think there's an appetite for depression treatments that aren't these SSRIs. I mean, Elon Musk has attacked them as zombifying you. And there's a lot of excitement over MDMA and psilocybin, which is the component in magic mushrooms, to treat mental illness. So you're seeing an actual, you know, startups are going crazy by creating these. And so we'll see. I don't know if this will stop that rapid growth, but it definitely shines a spotlight on the fact that these need to be taken in professional settings and that at-home use can be super risky.

11:49OK, in its earnings report, Costco revealed its hottest selling item. It is not honey wheat pretzel twists, although those are delicious, but 24 karat one ounce gold bars. Costco said it sold 100 million dollars worth of gold bars last quarter. Let me repeat that. 100 million dollars in gold bars. Ever since Costco began selling gold online in September, they have been in huge demand. Customers can only buy two bars, which went for about two thousand dollars a piece on Friday. and they sell out just hours after being posted on the website. And beyond gold bars, Costco is firing on all cylinders.

12:24Revenue jumped last quarter, membership rose to all-time highs, and it said it's not facing similar headwinds in consumer spending that other retailers like Walmart reported. It also sold 4 million pies over Thanksgiving weekend alone. Toby, find me a retailer who can do both. 4 million Thanksgiving pies and 100 million in gold bars. I mean, I'm from Florida and Publix is my retailer of choice, but they're not sniffing either the either the pie stat or the gold bar stats i think for costco it was a case of perfect timing i mean the price of gold reached an all-time high reached two thousand one hundred dollars an ounce for the first time ever earlier this month so i do think that gold has just been the news whenever it's peaking costco just kind of rode this wave to perfection and everyone i don't know if it's a gag or i don't know if people are just saying oh what an easy way to get my hands on gold, but for whatever reason, they sold a lot of gold bars.

13:16The narrative around gold is that when geopolitics, times are tense, people stock up on gold as this safe haven asset. I mean, only a few weeks ago, we talked about how geopolitics was the number one concern for investors. But if you want to sound smart at a party, there's really another reason that drives the price of gold higher, and that's interest rate cuts or the prospect of interest rate cuts, because investors seeing that rates are going down might say, well, why put my why put my cash where it's going to yield less when I can just throw it in gold, which holds its value over time, and it doesn't yield anyway.

13:50So it becomes more attractive in a lower interest rate environment. And that's what it appears to be happening in 2024. I'm definitely going to drop that at my next Christmas party. I was digging into it though. So they sold 100 million, which sounds like a lot on paper, but for around$2 ,000 a pop, that's only 50 ,000 bars sold. And technically you can buy up to two bars. So maybe only 25 ,000 or 30 ,000 people actually bought it. Costco has 72 million members. So if they could increase their supply more, it is feasible that they could sell$500 million, a billion dollars of gold. And I was trying to Google who is the biggest gold retailer in the world.

14:27It's not really a thing. Like there's not a ton of gold retailers that you can describe as you can just go online and buy gold bars there. So Costco made accidentally through kind of a quasi-marketing stunt and become the biggest gold distributor, gold retailer in the world, which is just a classic Costco thing. Yeah, if anyone listening knows of a larger gold retailer, let us know. But the shipping and logistics of moving gold must be a nightmare. If anyone can do it, I think it's Costco. Okay, before we make any rash decisions and splurge for a gold bar on air, let's take a quick break.

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16:14Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with EPCLIS. Before starting EPCLIS, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EPCLIS and visit ePCLIS.lily.com or call 1-800-LILY-RX or 1-800-545-5979. I hope everyone listening had a fantastic weekend. We should say that at the beginning of the show, Neil. But I'm saying it now because we're getting into our winners of the weekend segment where we look at two stories who had especially awesome weekends.

16:46Neil, you won the pre-show game of Cat and Mouse. So you're up first. Who's your winner? My winner is weight loss drugs with Govi, Ozempic, and all the rest because they just received maybe the most powerful endorsement of all, Oprah. Ahead of the premiere for The Color Purple last week, Oprah revealed she now takes weight loss medication. Oprah talked about how her weight and the constant scrutiny of it has occupied five decades of space in her brain, reminding everyone that it was a, quote, public sport to make fun of her for 25 years. So she says she's finally done with a shaming from other people and herself and called weight loss drugs a gift.

17:21Meanwhile, the Oprah, the company Oprah sits on the board of Weight Watchers, dove even deeper into the weight loss game by announcing a new$99 monthly membership that's intended to provide support and guidance to people who want to lose weight using these new class of drugs. It's called the GLP-1 program for the scientific name of these medications. And it comes after the company acquired a prescriber of GLP-1 drugs for about$100 million earlier this year. Weight Watchers is pivoting hard to these drugs because its business has otherwise cratered. Its subscriber base has dropped from 5 million a few years ago to$3.5 million now, and its stock price is hovering around$7.

17:59At its peak, it was above$100 a share. We thought Weight Watchers was for sure going to be a loser when this class of GLP-1 drugs came out, but credit to them, they kind of saw the writing on the wall and quickly mobilized to make this class of drugs available to their subscribers. I don't know, the economics of it are a little weird, though, because you pay that$99 monthly fee on top of the$23 existing Weight Watchers fee, but that doesn't actually cover any of the costs of medications. So it does seem like all you're getting is access to someone who can prescribe you the drug. And support guidance, because the whole point of these drugs is it's not just medication.

18:39It doesn't just change your physiology. It changes your behavior too, right? You don't eat certain things and you crave other things, or you don't crave anything at all. So I think that it's a more significant behavioral change that people might want support with. I'm wondering, though, if that additional financial burden on top of the cost of this already sometimes prohibitively expensive drug, are people going to spurge for that? So I'm interested to see if this ends up being a winner or not. But, I mean, credit to Oprah, too, for kind of coming out and saying she is a major shareholder of Weight Watchers.

19:13So being just honest and saying, yes, I'm on these drugs as well, it was probably, I would say, decently planned out. Like she doesn't just say that without maybe consulting with Weight Watchers first. So it is kind of this new era that they're both entering, and I think they're navigating it pretty well. My winner of the weekend is Travis Kelsey, because I don't know if any of you guys heard, but he's dating Taylor Swift. Seriously, the Times person of the year. I'm just joking. He's my winner of the weekend because he is the new king of game day advertising in the NFL. He has appeared on screen in 375 commercials aired during NFL games this season, which is more than any other athlete, actor, or gecko.

19:54Rounding out the top three are his teammate Patrick Mahomes and, of course, Jake from State Farm. Neil, the Wall Street Journal put together a week-by-week graph tracking the amount of commercials everyone's appeared in. And there is a distinct acceleration after week three when Taylor Swift first came into his first game. So you're not crazy people. The brands have been milking Travis ever since he started dating Taylor. Yeah, I guess if you had to craft a spokesperson in a lab, it would come out a lot looking like Travis Kelsey and acting like Travis Kelsey. He is just he's got that authentic, entertaining, comedic air to him that advertisers love.

20:33I think one of other than the Taylor Swift aspect, he appeared on SNL and a lot of people were shocked with his kind of comedic timing. And I think brands started to take notice and go, wait a second, people really like this guy. He's got some charisma. The other thing that I think helped a lot, too, was his new heights podcast really started popping off once he started doing Taylor Swift as well. And you kind of saw more of his personality behind the scenes, which is something advertisers love, because it's actually very hard to connect to NFL players just via the game because they always have their helmets on.

21:03So having him kind of unmasked both on SNL and on his podcast, I think contributed to this big influx in advertisers. I'm just amazed at the Midwestern vibe of these spokespeople. Like Travis Kelsey and Patrick Mahomes play in Kansas City. That's not like a huge market or anything. They're not Jets players. They're not in LA. They're not in New York. They're in Kansas City. And then Jake from State Farm also seems to give off this Midwestern chill vibe. And so maybe that's what resonates with consumers. Oh, absolutely. I think they are the everyman you can appeal to them. I worry about burnout, though, because 375 commercials, people who watch the NFL have seen Travis Kelsey a lot recently.

21:45And there's a very fine line between giving people someone who they think they'll connect to and oversaturating them. So I do wonder if there's ever going to be a point where people are like, all right, Enough of this Travis Kelsey stuff. I still don't think Kelsey has the same comedic timing and air as Peyton Manning. You just got to give him time. I think Peyton Manning is so funny. He's had such a glow up recently. And so I would just put him in the power rankings ahead of Travis Kelsey. But I can see why you may want to buy a product seeing Travis Kelsey instead of Peyton Manning. All right.

22:15Let's move on. Neil, I'm ready to call it. Netflix has won the streaming wars. I'm not exactly the first one to say that, I know. But here's why I'm saying it now. There's been a flood of licensing deals hitting the streaming market, and nearly all of them are benefiting Netflix. It started with a trickle. Remember, Suits, which was originally a USA Network series, was licensed to the streaming service and ended up being one of Netflix's biggest shows of the summer. But now it's a flood. Disney is preparing to license 14 shows to Netflix, including This Is Us and Loss. And Netflix is happy to cosplay as cable for viewers.

22:51From January to June, 45 % of viewing on the service came from licensed shows and movies. Neil, this feels like a return to normalcy for the streaming industry as a whole, and it looks like Netflix is going to come out a winner. This is a full circle moment. Remember when Netflix started in 2007? They didn't have any original shows. It was all licensed content from other studios. And then when the streaming awards happened and every single media company said, okay, I got to release my plus thing. I got to release my Disney plus. I got to have my Peacock. I got to have my HBO Max. What they did was they pulled their entire libraries away from Netflix to make them exclusive to their platforms because they needed to juice their growth numbers and say, you need an actual reason to come to our platform.

23:34So NBC did this with The Office. They brought The Office to Peacock when they launched it. Same thing happened with Friends, with Warner Brothers to Max or HBO Max at the time. And then Netflix was left without all of these sort of this deep bench. But I think things have shaken out, like you said, in the streaming wars. These companies realize that they're not going to beat Netflix in terms of subscriber numbers. They need to turn a profit for their investors because they've been losing billions of dollars. And this is a pretty easy way and a normal way for TV companies to make money is to license your shows.

24:08Yeah, this has always been kind of the way the industry worked before everyone kind of, yeah, started tight fisting their own IP. But I think it's going to be good for studios in the long runs, too, because when Suits came back to Netflix, it became uber popular again. And now NBCUniversal is developing a new Suits series to kind of capitalize on that wave. So that happens relatively frequently under Netflix. So they paint themselves as a good guy for the entertainment industry. It is full circle, too, in the sense that Disney was kind of one of the big players to say we are pulling our full catalog off because they were launching Disney Plus in 2019.