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THE HEADLINES

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GO HOME, YOU’RE DRUNK

Diageo is divesting 19 of its “value” brands. You know, the ones best served in plastic bottles and consumed before 10 AM under a bridge. The lower end brands (read: the Camel cigarettes of booze) including Seagram’s Canadian whiskey and Goldschlager schnapps will fetch roughly $550M in cash. The buyer? Privately held US spirit maker, Sazerac.

But the London-based liquor maker may have been negotiating under the influence, selling its Seagram’s and Goldschlager brands for approximately three times annual sales. To put things in perspective, the company paid close to $1B, or 20 times annual sales, for George Clooney’s Casamigos tequila brand.

Diageo reports that consumers in developed markets are drinking less and opting for more premium brands when they do. The owner of the unofficial blackout agent of US college students (Popov) has been pummeled by its exposure to vodka in an environment where gin and tequila are en vogue.

The UK-listed spirit maker’s shares were little changed on the news.

Water Cooler Talking Point: “Apparently, €0.46 EUR worth of gold flakes doesn’t score you a premium designation.”

 

IT’S THE END OF THE WORLD AS WE KNOW IT

Think you had a bad Monday? Think again. Apple, GE, Goldman Sachs, and the Dow all took their lumps on the first day of the work week.

GE dropped 6.9%, closing below $8 for the first time since March 2009. Thomas Edison’s power business, which is allegedly getting close to “finding a bottom,” has been plagued by issues like dropping global demand and turbine blade failures.

Goldman Sachs had a rough day of its own. Malaysia’s finance minister demanded a full refund for Lloyd’s handy-work on the 1MDB debacle that earned the company roughly $600M. News of the Malaysian government pouring proverbial gasoline on the dumpster fire sent shares to their lowest point since 2011 (down 7.46% on the day).

More broadly, the Dow was also battling a weekend hangover. Fears about big tech sparked a sell-off that sent the Dow tumbling 600 points. Two of Apple’s suppliers lowered outlooks, sending shares of Steve Jobs’ brainchild down 5% on the day.

Water Cooler Talking Point: “I don’t need to worry about losing money in stocks because I already lost it all in bitcoin earlier this year. That’s what we like to call ‘foresight’ in the biz.”

 

THE YANKEES BID, THHHEEE YANKEES BID

This offseason, the New York Yankees may look to sign top MLB players Manny Machado or Bryce Harper, but their biggest acquisition could actually be off the field. In a report from an unnamed leaked source (the most credible of all sources), the Pinstriped 20% owners are said to be buying back all outstanding shares of the YES television network from Fox.

Rupert Murdoch inked the initial deal to buy 80% of the Yankees’ network for roughly $3.9B in 2014. But, as part of Fox’s merger with Disney, Fox agreed to offload its Regional Sports Networks (RSNs) in order to comply with the merger stipulations.

The Yankees don’t get carte blanche on the sale from Fox, though they are batting leadoff. Disney’s new kid brother has to provide the Bronx Bombers with a 60-day notice prior to putting the network on the trading block. No price has been listed but Fox’s suite of RSNs is said to be valued at $22B. It’s unclear if YES can be broken out individually or if it must be a package deal.

Water Cooler Talking Point: “I wonder how many 3lb buckets of chicken finger baskets it’s going to take to come up with all that money.”

 

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IN OTHER NEWS

• The Wall Street Journal is reporting (again, for some reason) that Long Island City and Northern Virginia will be the home of Amazon HQ2 and HQ3. The news that dropped last week may be confirmed by Jeffrey Commerce as soon as today.

 

• Who is the only person more thirsty to spend other people’s money than [insert ANY Instagram model/gold digger here]? That’s right, Masayoshi Son. The founder of SoftBank is targeting a $20B+ IPO for his company’s mobile unit in order to bolster the coffers for his $100B Vision Fund. Japan’s second-biggest IPO (behind Alibaba) combined with the sale of Sprint to T-Mobile in the US, should do the trick.

 

• Moody’s is discussing options for building the risk of a catastrophic hack (i.e. Equifax) into its credit ratings, thus giving investors a clearer line of sight into a company’s cyber attack risk.

 

• Can you say dank earnings? Aurora Cannabis, a devil’s lettuce grower and distributor listed on the Toronto Stock Exchange announced massive earnings numbers. Revenue grew 260% year-over-year and profit was up 2,826% … but shares fell nearly 2% on the day. This, of course, is what happens when your product becomes legal overnight.

 

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