A cannabis CEO gets fired by a beer CEO
Hey Snackers,
71 down in 10 minutes. The Nathan's Famous Hot Dog Eating Contest winner didn't boost the fast food chain's stock and didn't set a new devour record.
But markets did. All 3 major US stock indexes hit fresh record highs before closing early for the 4th. Now they're back in action for the June jobs report.
PS: Happy 25th birthday, Amazon.
Walmart vs. Jet.com: The old guard is now clashing with its ecommerce newbies
The "Sam Walton College of Business"... That's where Walmart CEO Doug McMillon got his BA. It's named after Walmart's founder, and the dress code is business pleated, not Silicon Valley untucked. And deep reporting by Recode has revealed that profit-focused retail types at Walmart are annoyed with its new ecommerce darlings.
Jet.com got acquired in 2016 for $3.3B... and it's appeared to put up big results. But it turns out many at Walmart resent Jet.com and the new techies on the block.
- The positive PR spin: Walmart's got its mojo back. It's putting up a legit fight against Amazon and is even beating Bezos in some spots (it was first to offer free 1-day shipping).
- The stone cold sober truth: Walmart's ecommerce efforts lose $1B per year. And Walmart only owns 5% of total online shopping in the US, behind Amazon's 38% (according to Recode).
- The latest: CEO McMillan is telling Jet.com's Marc Lore to cut costs. But Jet.com founder-turned-Walmart-ecommerce-guru says they must actually increase spending if Walmart's serious about beating Amazon.
Growth vs. Profit... With tech changing so many industries, you find situations where companies have old-and-profitable divisions squabbling with new-and-growing ones. Managers need the profits now to fuel growth for tomorrow. But the clash of culture can kill morale (and make the old guard feel un-loved). That tension is playing out in plenty of places:
- Walmart: Its physical stores made nearly $7B in profit last year, but we all know the future is online and omni-channel commerce (a combo of online and in-store).
- Automotive: Gas-guzzling trucks/SUVs are making all the money, but management loves to talk about self-driving tech and electric cars.
- News: Fox News and CNN are making bank on TV (political ads are their profit puppies), but the growth is in digital and mobile.
Canopy Growth fires its Co-CEO — and it’s got Corona fingerprints all over it
Good thing he's Canadian, or this holiday would be sad... Bruce Linton, co-CEO of the world's largest cannabis company, Canopy Growth, told the world Wednesday that he got fired. Correction: The Company said he “stepped down.” But he was fired. And it looks like liquor legend and Corona-owner Constellation Brands was behind the big move.
Modelo lager. High West whiskey. Robert Mondavi merlot... Now pot. Constellation has already got the bar covered, so in 2018 it expanded beyond alcohol by spending $4B to acquire 37% of Canopy. This was the strategic vision: CBD-infused drinks. Canopy brings the marijuana-know-how, Constellation brings the beverage creation/distribution expertise. Then strategies stopped aligning:
- Linton: The co-CEO was busy forging A-list partnerships with Martha Stewart and Snoop.
- Canopy: The cannabis company is focusing on medical marijuana, with plans in 30 countries since the legal situation is easier than recreational.
- Constellation: The alcohol company wants CBD-infused and profit-making drinks ASAP — but under Linton's leadership of Canopy, that wasn't priority #1.
It's all about the Board... The CEO may be boss, but he or she has to answer to the Board of Directors. Canopy has 6 seats on its Board, and 3 are execs at Constellation while a 4th is on Constellation's board, too (the alcohol empire managed to get board control with its $4B investment). Only 2 of Canopy's board members are independent from Constellation. Last week, Constellation's CEO was "not pleased with Canopy’s recent reported year-end results,” and it seems he and his board buddies did something about it.
What else we’re Snackin’
- Wasted: Jim Beam's Kentucky warehouse packed with bourbon catches fire, destroying 45K barrels and creating a local environmental hazard
- Hangry: Uber Eats is testing "dine-in," aka ordering online then showing up for a seat when your food's ready
- Secured: Symantec jumps 14% on reports Broadcom's getting ready to acquire the anti-virus software legend
- Support: Boeing sets aside $100M in a fund for those affected by the 737 Max crashes
- Pause: MoviePass (whose parent company is HMNY) temporarily stops its services so it can improve its mobile app
Friday
- The big June jobs and unemployment report