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THE HEADLINES

 

OPEN RELATIONSHIP

McDonald’s is ending its exclusive distribution contract with Uber Eats and testing the waters with DoorDash. Travis Kalanick’s (remember him?) brainchild has been the sole courier delivering delicious Big Macs (and apple pies) to cotton-mouthed, red-eyed customers since 2017.

The announcement is an obvious boon to DoorDash and a blow to Uber. The program will launch in Houston where DoorDash will have access to 200 Houston based Mickey D’s … which seems like entirely too many McDonalds for one city. If the program does well, it will likely expand to a national level.

DoorDash is strictly a delivery company that operates in all 50 states and reaches 80% of Americans, which is what makes it so attractive to the golden arches according to Chris Kempczinski, Mcdonald’s US President.

It be like that sometimes

Uber just got ham-burgled. Even though the technology company delivers for 9k McDonald’s throughout the country, representing more than half of the burger chain’s domestic locations, this news has got to sting considering Uber recently agreed to lower commissions on deliveries in order to appease Ronald.

And that’s not all, McDonald’s brass hinted that it would open up its delivery business to other services like GrubHub and Postmates.com

 

FAT CLOUDS

IBM and AT&T are joining forces for a cloud deal that those with inside baseball are saying is worth “billions.” According to IBM, the deal is multiyear and will allow AT&T to host business applications on the IBM cloud.

Sounds juicy …

While IBM has confirmed the deal is done, the exact value and length haven’t been revealed.

For IBM, the W marks the first deal since it closed a $34B agreement with Red Hat … last week. When that deal was initially being hammered out back in October, IBM said it was acquiring all of Red Hat’s stock for $190 each in cash It was the largest deal ever for IBM.

AT&T stands to benefit from that deal also, now that it’s in bed with IBM. It’ll gain access to Red Hat’s platform in order to manage workloads and applications for enterprise customers.

AT&T and IBM will also be developing edge computing platforms that leverage 5G networks and internet-connected devices. So. Many. Buzzwords.

 

PODDY TIME

Apple is taking a bigger bite of the podcast business, as the company plans to fund original podcasts that are exclusive to its sh*tty Podcasts app.

Apple first got into the biz back in 2005 but hasn’t made many (read: any) updates since. That’s starting to change, though, as the Podcast Analytics app was launched last year to give podcast makers insight into its listeners.

And that’s a f*ck ton of insight as approximately 50%to 70% of all podcast listeners utilize the Podcasts app. Even so, Apple doesn’t make any money off of it because it doesn’t run its own ads or charge for software. That was all well and good until iPhone sales started going the way of the Amazon Fire Phone.

It’s easy to see why the Mac mafia is making the move, as the number of monthly listeners has doubled over the past five years and sales in the podcast industry have grown 65% over the past three.

Spotify is seething

Spotify, which is the number two player in the game behind Apple, is investing heavily in the podcast industry this year. CEO Daniel Ek stated in February that the company planned to spend between $400M and $500M on original podcasts this year including the $230M it paid to purchase Gimlet Media.

Spotify’s stock fell nearly 2% yesterday on the news.

 

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IN OTHER NEWS

• Shocker … the masters of the universe are absolutely crushing it this earnings szn. That is, everyone except one bulge bracket bank. Wells Fargo and JPMorgan Chase joined Citi in besting 2018 profit figures, due in large part to swelling consumer businesses. Goldman’s bottom line, however, fell 6% vs. the same period last year thanks to underperforming underwriting and debt-trading segments.

 

• President Trump reminded us yesterday that if he was the kind of guy who wanted to impose tariffs on China, he definitely could. This, of course, sent investors heading for the exits. The three major US indices closed in the red. As markets await a Fed rate cut, Donny Politics played Buzz Killington, noting that China has not lived up to its promise, made at the G20, to buy a boatload of US farm exports.

 

• POTUS had a busy day moving markets. Oil futures fell nearly 4% on news that the Secretary of State, Mike Pompeo, indicated that Iran is ready to discuss its missile program. Of course, Pompeo didn’t specify if the discussions involved high ranking Iranian military officials threatening to kill every man, woman, and child on the eastern seaboard. It’s worth noting that Iran has indicated that its missile program is non-negotiable.

 

• “Leave Bill alone!” The publicly traded fund of famed activist investor, and Herbalife hater, Bill Ackman has an activist investor of its own. Define “irony.” AVI, which owns roughly 3% of The Ack Man’s publicly traded fund is pushing back on the proposed issuance of $400M in 20-year debt. AVI claims the Pershing Square Holdings fund is already over-leveraged.

 

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