🇺🇸 Springsteen and the Great Cash-Out
![Slopes next to the Saks store [bojanstory/E+ via Getty Images]](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/18LehY6muNoNpO7RGXySYh_1_GettyImages-1347201030.jpg)
Hey Snackers,
Happy preholiday-week Friday. Lay’s owner Pepsi is celebrating with a new Lay’s chips vodka distilled from Lay’s “proprietary potatoes.” We’re imagining Sour Cream & Onion spuds.
The tech-heavy Nasdaq index lost 2.1% yesterday as central banks in the UK and the EU moved to tighten their monetary policies.
Bruce Springsteen sells his tunes for a record $500M as the Great Cash-Out continues
Born to run… to the bank. Bruce “The Boss” Springsteen sold the rights to all his music to Sony for a reported $500M+, the largest music-rights deal ever. Sony will profit from your streams of classics like “Born in the U.S.A.” on platforms such as Spotify, YouTube, and TikTok.
- Music mega-deals have boomed this year: Sony spent $1.4B on music in just the first six months of 2021.
- Bob Dylan sold his catalog to Universal Music for an estimated $300M last December, and the Red Hot Chili Peppers and Paul Simon sold their catalogs for $140M+ this year.
#Flated tunes… The value of popular music catalogs soared this year as demand grew across social platforms (TikTok today, the metaverse tomorrow). Many musicians chose to cash out on the premium prices. And they weren’t the only ones:
- Stocks: Corporate execs sold a record number of shares this year. Elon Musk recently sold nearly $13B worth of Tesla stock, and last month Microsoft CEO Satya Nadella offloaded half his MSFT shares.
- Entertainment: Roald Dahl’s estate sold the rights to his beloved kids’ books to Netflix for $700M, and MGM is selling its films (and itself) to Amazon for $8.5B.
- Real estate: Home prices soared to fresh records in 2021, spurring the most home sales in 15 years.
This year was the Great Cash-Out... because next year is the great unknown. 2021 was a seller’s market because of high prices (thanks, inflation) and easy borrowing (thanks, low interest rates). 2022 may be different: The Fed is expected to raise interest rates three times to curb soaring prices. President Biden and Dem lawmakers plan to increase taxes on the wealthy, which could reduce gains from cashing out. Meanwhile, the fast-spreading Omicron variant is creating greater economic uncertainty.
Toys R Us makes a mega US comeback, as malls take the “anchor” approach
Jumbo slide in aisle six… not your regular toy store. Childhood legend Toys R Us is staging a major US rebirth. In 2017, the chain was sitting on $5B in debt as the “buy now” button on Amazon replaced shelf-browsing for the latest superhero figure. Toys R Us filed for bankruptcy and closed all US locations, leaving 900 international stores running. Until now:
- Toys R Us just opened its first standalone US flagship store featuring a two-story slide, an ice-cream parlor, and a Geoffrey the Giraffe café.
- Over the next year, Macy's also plans to open 400 Toys R Us shop-within-shops in its US department stores (#InceptionRetail).
Department store après-ski… Toys R Us isn’t the only one Disney-ifying its shopping experience. Its new store is nestled right outside the American Dream mall in New Jersey. And it’s wild:
- The mall features an indoor ski park, a water park, mini-golf courses, a Nickelodeon Universe, and even an aquarium. Oh, and hundreds of stores and restaurants.
- It’s the most expensive mall ever built in the US, and the second largest. The magical megamall is $3B in debt, and made only $139M in sales in the first half of this year.
To nail the mall, you must nail the anchor… The e-commerce-driven mall-pocalypse has turned many malls into tenant-less ghost towns. That’s why malls can’t just be malls anymore. They need an anchor to survive — whether that’s outdoor dining, a grocery store, or a full-on ski resort. Surprise: Landlords filled about 50% more real-estate space in open-air shopping centers last quarter than they did pre-pandemic. Anchors like grocery stores, fitness studios, and pharmacies led the mall revival. Food first, shopping second.
What else we’re Snackin’
- Rev: Rivian lost $1.2B on $1M in sales in its first quarterly earnings as a public company. Still, the electric-truck maker confirmed plans to build a $5B Georgia plant.
- Awk: H&R Block is trying to stop Block calling itself Block. The tax-prep company is suing fintech giant Square over its new name… Block.
- Repay: McDonald’s settled a lawsuit with disgraced former CEO Steve Easterbrook, forcing him to repay his severance of $105M.
- Mod: Reddit said it confidentially filed to go public (read: We can’t see its #s yet). In August, the social site raised $700M at a $10B+ valuation.
- Budly: While the hard-seltzer boom continues, Bud Light is launching a hard soda. It’s not the only one: Pepsi plans to roll out a boozy Mountain Dew next year.
- BNPL: The Consumer Financial Protection Bureau is probing “buy now, pay later” programs like Affirm, Klarna, and PayPal over concerns about how they affect consumer debt.
Friday
- Earnings expected from: Darden Restaurants and Winnebago
Authors of this Snacks own shares of: Square, Netflix, Starbucks, Spotify, Amazon, Microsoft, and Tesla
ID: 1962608