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THE HEADLINES

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PUFF, PUFF, PATH TO DIVERSIFICATION

Altria plans to shell out $1.8B for a 45% stake in Cronos, a Canada-based cannabinoid company. Or for those less in tune with the “kids these days,” Cronos is a Canadian pot peddler.

The investment will help Altria rely less heavily on its US-cigarette business which has been been on the decline (thanks a lot, truth!) and will allow the company to be at the forefront of devil’s lettuce distribution if and when the Uncle Sam legalizes the sticky-icky federally.

For Cronos, besides the obvious upside of a $1.8B investment (additional R&D funding, infrastructure and distribution footprint expansion … and in-office cigarette vending machines) the deal could allow the company to out duel competition like Canopy and Aurora.

Having a stable of heartless Altria lawyers and soulless lobbyists at its disposal will also help fight the good fight in the US. And the tobacco company formerly known as Philip Morris brings e-cig and vape knowledge to the table.

As part of the deal Altria will discontinue its MarkTen and Green Smoke e-cig brands. The Marlboro Man has an option to increase the deal to a 55% stake at $19 per share … or roughly the price of a pack of cigarettes.

Water Cooler Talking Point: “The FDA’s collective heads are going to explode should Altria also invest in Juul.”

 

SERIOUSLY, CUT IT OUT

OPEC and Russia have agreed to help curb the oil price drop that has been pummeling the market in recent months by cutting oil production. That’s f*cking teamwork.

OPEC nations and Russia will combine for a 1.2M barrels per day decrease, with OPEC nations cutting two-thirds of the total (800k). This move is aimed at mopping up a growing global supply glut and reversing the 30% drop in oil prices.

Iran, Libya, Venezuela, and Nigeria were all given exemptions thanks to economic strife occurring in their respective countries, with Russia and Saudi Arabia taking the brunt of the pain as the two largest oil producers in the world. Brent crude was up as much as 5.2% to $63.11 per barrel on London’s Intercontinental Exchange on the news.

Water Cooler Talking Point: “Lead negotiator? Joey Gladstone.”

 

HEARD IT THROUGH THE GRAPEVINE

Uber has finally filed its S-1 to go public in 2019. Following rival Lyft’s Thursday filing, Uber is planning one of the largest IPO’s of 2019 (and all time), with a valuation expected to reach as high as $120B. The filing suggests that Uber could IPO as early as Q1, keeping pace with Lyft’s March or April timeline.

Along with Uber and Lyft, companies like Airbnb and Slack are expected to go public in 2019 as well. The year of our Lord 2019 could rival those at the peak of the dot-com bubble.

Uber has codenamed discussions around the plan “Project Liberty,” likely in reference to early investors finally being able to cash out their stakes for a profit.

Speaking of Uber investors, one guy who stands to make a pretty penny is Lance Armstrong. The cyclist, known for both cheating to win 7 Tour de France’s and having one testicle, was an early investor of Uber via investment in a venture capital fund. According to sources, his initial $100k investment could now be worth upwards of $20M.

Water Cooler Talking Point: “I’ll be honest, since Uber debuted I’ve been riding my bike a lot less too.”

 

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IN OTHER NEWS

• Hey Moderna, it could be worse, you could’ve chosen to go public in October 2008. Despite selling more shares than expected at a price in line with expectations on the way to raising $604M at a $7.5B valuation, Moderna’s IPO was a proverbial bloodbath. The stock ran into a buzzsaw in the form of an epic selloff. To give some perspective, the S&P 500 fell 4% between when Moderna’s roadshow started and the public offering. Shares fell almost 20% during its much-anticipated debut on Friday.

 

• If your friendly neighborhood economist looked worried on Friday, there was good reason. Although the jobs report signaled continued growth in non-farm payrolls, November’s figure missed consensus expectations and reflected the lowest growth rate in a year. An additional 155k jobs was enough to worry some. Unemployment remained the same at 3.7%.

 

• Meanwhile in shares that are totally f*cked … Apple and Alphabet have officially erased their gains for the year and Facebook is planning a $9B stock buyback after having fallen more than 40% since July. I love the smell of desperation in the morning.

 

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