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THE HEADLINES

 

KING OF THE CASTLE

In what is basically the plot line to ‘Entourage’s’ “One Day in the Valley” ep, it looks like the heatwave in the Northeast helped bolster Disney’s release of ‘The Lion King.’ The remake of the classic animated film finished with $185M in box office sales in North America, supporting the film industry’s attempt get back on track for 2019.

Live-action remakes have been all the rage this year as big names like Donald Glover, Seth Rogen, and Queen Bey lent their voices and star power to the reboot. Despite less than stellar reviews, ‘The Lion King’ sales helped Disney continue its domination of the big screen this year.

Hakuna Matata

Disney is flying higher than the 14-year-old OD’ing on Dippin Dots and Swedish Fish after playing 7 minutes in heaven in the back row of the movie theatre. You see, ‘Avengers: Endgame’ is continuing its run in cineplexes throughout the world. And after this weekend, the superhero movie should eclipse 2009’s ‘Avatar’ as the highest-grossing movie of all time.

Released in April, Disney put out an extended version of the film that put gross sales at $2.79B globally. Spoiler alert: that’s a sh*t ton of money … and kind of a sketchy way to take the crown. Big titles like ‘Toy Story 4,’ ‘Aladdin,’ ‘Captain Marvel,’ and ‘Avengers: Endgame,’ have vaulted Disney into its rightful seat atop the throne of the box office this year.

 

PIMPIN’ ALL OVER THE WORLD

Anheuser Busch InBev is selling its Australian unit to Japanese drink company Asahi Group Holdings. The $11.3B deal comes just one week after AB announced its decision to pull its Asian IPO due to lack of interest.

Bud’s shares jumped 5.53% Friday during trading hours as investors were smitten over the selling price, which will be used to pay down its $100B+ in debt. The $11.3B price tag is even higher than the anticipated $10B haul that the company was targeting to raise via its IPO.

And now, it’s time for something completely different

PepsiCo is expanding to Africa with its $1.7B purchase of Johannesburg based Pioneer Food Groups. Pepsi is paying $7.93 USD per share, a 42% premium to Thursday’s closing price.

Pioneer Foods is one of Africa’s largest producers and distributors of branded foods and beverages. Pepsi’s newly appointed chief executive of sub-Saharan Africa, Eugene Willemsen, stated the company believes this is a tremendous opportunity due to Africa’s population and expanding economies.

 

“I’VE BEEN EARNING AND BURNING …”

“… snapping necks and cashing checks.” – (most) major US banks this earnings szn

Earnings season kicked off with a flurry of big bank data last week. The verdict? Consumer banks put the team on its back (yes, even at Wells Fargo) while trading and dealmaking groups (looking at you, Chad) weighed on bank’s earnings. For now, that is.

Who is on deck this week?

The European banks. To say the banking sector in Europe is a sh*tshow would be an understatement. Deals have dried up quicker than Becky at the bar when you tell her your finance job is with NW Mutual, due in large part to US-China trade fears and negative interest rates.

And then there’s Deutsche Bank. If European banks were the 1986 Mets, DB would be Doc Gooden … and Lenny Dykstra combined. DB has already set expectations (… low), warning of a large quarterly loss.

Tech on deck

After Netflix got beaten to within an inch of becoming Blockbuster last week and Microsoft reminded us it’s that kid who always ruins the curve on a test, we’ve got a slew of tech companies reporting this week. Facebook, Alphabet, Twitter, and Amazon will headline.

While it’s unclear what to exactly to expect, there are some things to watch out for, like the ongoing China-US trade war and how it’s impacting hardware manufacturing in APAC, and privacy fines and concerns (we see you FB).

 

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IN OTHER NEWS

• Amazon is calling its lawyers, as it’s accusing Surescripts of barring PillPack, Amazon’s prescription delivery service, from accessing customer prescription data. According to reports, PillPack has already sent a cease and desist to Surescripts, who has yet to cease, nor desist. Surescripts already manages about 80% of all US prescriptions, a number that’s gotten it sued once before by the FTC for the “illegal monopolization of e-prescription markets.” This may be the first and only time that Jeffrey Commerce is on the right side of an ethical debate.

 

• After losing the rights to Christiano Ronaldo’s Juventus squad for its FIFA line of video games, EA shares fell 3.5% last week. Losing the right to use the club’s name cost EA more than $750M in market cap, which isn’t a great look considering more than 14% of EA’s revenue over the last 3 years has come from the FIFA franchise. The player’s names and appearances will be present in FIFA 2020, but they’ll be playing under the fictitious Piemonte Calcio moniker. Hear that? It’s Player #99 of NBA LIVE fame laughing from atop his pile of money.

 

• Our bad. Boeing is setting aside more than $5B to pay airlines that were hurt by its grounded 737 MAX planes earlier this year. Boeing also might need to pay the families of the more than 346 people who died in two 737 MAX crashes. The company is expected to report sales of about $20B for the second quarter. Not too shabby considering it went an entire month without making a sale.

 

• In what turned out to be one of the worst performances in more than two decades, Bridgewater Associates’ Pure Alpha fund lost 4.9% in the first half. The fund was hurt by global stock and bond markets rebounding on the hopes of looser monetary policy. According to the Financial Times, more than 4.5% of losses came in January, inferring the company went into 2019 planning for the worst in global markets. Maybe if Ray spent more time focusing on the biz than selling his ‘Principles’ this wouldn’t have happened.

 

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