The Best One Yet - ☠️ “Portnoy’s pirates” – Barstool’s $1 buyback. WeWork’s worth $0. Cannabis’ beer-quisition.

Episode Date: August 10, 2023

Dave Portnoy sold Barstool Sports to a gambling company for $550M, but just allegedly got it back for free — Because pirates don’t wear ties. WeWork just warned Wall Street that it might go bankrupt — So we did the math, and WeWork is actually worth $0. And Tilray, the $2B cannabis giant, just randomly bought 8 has-been beer brands from Budweiser — Shocktoberfest came early because weed legalization is late. $WE $PENN $TLRY $BUD $UL Want merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.com Follow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypod And now watch us on Youtube Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Thursday, the new Friday, August 10th, and today's pod is the best one yet. Today's pod is actually Knuff because I'm finally going to Barbie tonight. I cannot believe it took you this long, Jack. We're going to a drive-in. I'm getting a bunch of fried food before. Alex is getting a milkshake.

I'm dressed in pink from waist to toe. No, head to waist. I'm not wearing lower body pink. Yeah, he's a family-friendly show. Easy on the milkshakes over there. In the meantime, can you hit the first story first, Jack? WeWork CEO just said there's substantial doubt that WeWork can survive without going bankrupt. Yides, we did the math.

We work is worth $0. We calculated it. It really is. For our second story, Tillray, the Cannabis Giant, just bought eight beer brands from Budweiser? Shocktoberfest came early because legalization came late. And our third and final story is Dave Portnoy. The founder of Barstool. Sports sold the company for half a billion dollars a few years ago.

But it looks like he just got the company back for free. Because pirates don't wear ties. And Ken don't wear shirts. I don't know about that one. Clearly someone hasn't seen the movie yet. But Yeties, before we hit that wonderful mix of stars. I do Beach, Jack. What I do is beach.

It is still so hot outside. Oh, Yeties. The summer of sweat. But you want to know how hot it really is this summer? Jack, can you tell us how hot it really is this summer? It is so hot, it's too hot for ice cream. Jack, can we sprinkle on a little context to this one? There's actually a correlation between how hot it is outside and ice cream sales.

What we're saying is higher temperature, higher ice cream sales. If you're swallering hot air, you're eating soft sir. More temperature, more mint chip. But for the first time ever, the world's biggest ice cream. The world's biggest ice cream company just confirmed, there is a limit to that reality. It can be too hot oh for gelato. It can be too hot oh for gelato. Unilever, they own Ben and Jerry's, good humor, briars, Klondyke bar, all of the ice cream.

The CEO of Unilever just said that it is so hot out this summer that it's hurting sales. Yeties, what we're looking at is the first ever midsummer ice cream sales slowdown. Because for Unilever, ice cream sales during the first half of the year jumped by 6%. Because it was so hot. But the amount of ice cream they've sold this summer is actually declining. Because it's too hot. At a certain point, it's simply too hot for ice cream to be enjoyable. At a certain point, that cookies and cream is a little uncomfortable.

When it's 100 degrees outside, you don't want an ice cream cone. That thing's going to melt all over your hands no matter how quick you're licking. A hundred degrees outside, you're grabbing an H-2-O. You got a hydrate, not dairy draught. You want a cold drink, not a cold ice cream cone. We're looking at the situation. Global warming. It is melting glaciers.

But it's also melting your banana split. So, Jack, what's the takeaway for our buddies out there not enjoying an ice cream? It turns out there's a sweet spot for ice cream sales. Literally. And it's somewhere below, eh, 112 degrees. Ice cream, you scream. But I am way too hot for ice cream, Jack. Excuse me, I'd like an ice cream cone.

Hold the cream. Just give me ice, please. Three cubes with hot fudge on us. It's Teuhato for Jolada. Yetis, let's sit our three stories. 15 years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm.

It's the 50% that's a fat tip. Tea Boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more, so just start the show. For our first story, WeWork just warned us that it could go bankrupt really soon. We did some extra mat and discovered that WeWork is technically worth $0. right now. Zero dollars.

But yet,ies, before we jump into that, emergency team meeting by the water cooler, everyone. Quick, someone grabbed the succulents. Yeties, earlier this year, we talked about the WeWork comeback. It looked like it was really happening. Yeah, work from homers were sick and tired of working from home, and there were book in space at WeWork. It was looking good.

This was just like what Alfred told Batman to get Batman back, wasn't it, Jack? Yeah. After Adam Newman knocked WeWorks down to the ground, WeWorks Learned to pick itself back up again. It did Master Wayne. And when we saw the earnings reports from WeWork, it looked like the WeWork comeback was working. 72% of WeWork desks were occupied by paying customers. Not too shabby, Jack.

Sit down, stand up, and sit back down to the WeWork again. But WeWork CEO just gave us a new update. And it's not a good one. WeWork CEO just said they have substantial doubts they can survive without having to declare bankruptcy. which sounds a lot like close to bankruptcy. Yeah. So people who own WeWork stock, they sold their WeWork stock yesterday. WeWork stock fell 40% on the news.

Masa. Jamie isn't there to save you. But yet he's here's what Jack and I found fascinating about this story. Sometimes the numbers tell the story. And in this case, WeWork's numbers tell quite a story. WeWork was once valued at $47 billion. Today, it's worth $200. million. Yeti's stock of WeWork is down 99% since the company went public. The stock is trading at

13 cents per share. And it's not just the financials. Jack, can we talk about the business itself? How are the membership's doing over a WeWork? Membership is actually shrinking for the company. The number of members fell by 1% compared to last year. WeWork has stopped growing. WeWork is now a shrinking company. There is no plausible growth store you can even tell about WeWork. But Yetis, there's actually one number that we think is the craziest number. at all these WeWork numbers. And that's the amount of cash they have. WeWork has $200 million of cash, but there's more to the story.

Here's why that's scary. WeWork's valuation, according to their stock price, is also $200 million. It's so facto, investors think WeWork's business is actually worth $0. And why is that, Jack? The $200 million they've assigned to all the stock is just representing the $200 million of cash WeWork has in their bank account. The company's cash is the same as the company's value. Therefore, the company isn't worth anything more than its cash.

It's worth zero. WeWork's brand. It's buildings. It's offices. It's chairs. It's all worth zero dollars in Wall Street size. The kombucha is worth more than the company. And the reason Wall Street thinks WeWork is worthless.

It's that the business loses money year after year, quarter after quarter. The only thing we work has, apparently, is the cash. And that is probably going to run out pretty soon. Yeties. Over the last 10 years, WeWork has lost more money than any company we can think of. Pound for pound, dollar for dollar, WeWork may actually be the most money losing company in corporate history. Somewhere in a Manhattan boardroom right now, Adam Newman is trying to buy it back for $1. Jamie?

Sounds like a sequel. So, Jack, what's the takeaway for our buddies over at WeWork? WeWork shows the importance of economies of scale. Yeties here is the reason why investors think WeWork is. is worth $0. The business model doesn't work. Specifically, the business model has no economies of scale. Economies of scale.

Yet these many industries get economies of scale. The bigger they get, the more efficient they run. For example, Facebook, when it launches its app in a new country, it benefits from economies of scale. Facebook adds more users so it can make more money, but with few new costs. All it has to do is turn the app on in a new country. On the other hand, sub-leasing office space has zero.

economies of scale. Every new building that WeWork expands to is another huge and costly lease that they have to pay. The most recent WeWork City was no more profitable than the very first WeWork City. The last building WeWork at it was just as hard to make money as the first building we work added. And that is why WeWorks Fall shows the importance of economies of scale. For our second story, Tillray, one of the big four Canadian cannabis companies just bought, get this, Eight beer brands from Budweiser. Why are they doing that? Because Tilray can't hold its breath any longer. Oh, Jack. Remember what was going on in 2018?

Back when cannabis was like crypto, it was crazy out there. Remember those four cannabis stock companies sprouted up like crabgrass on Wall Street? They were like weeds all about weed. It was wild in the stock markets. One of those Canadian cannabis stocks was Tilret based just outside Detroit. Yes, it was. Tillay, they grow and they sell weed. That's the business. But here's the news. Till Ray, the cannabis company, just acquired Shock Top and seven other beer brands from the owner of Budweiser.

Shock Top. You remember Shock Top, the beer. It's the beer you ordered to prove your palate was more refined than a freshman. Shock Top, the beer that awkwardly came with a slice of orange floating on top. Shock Top, the poor man's blue moon. Yeah, a lot of questions about Shock Top. But why Tilray? The $2 billion publicly traded weed company.

Why are they buying a small portfolio of craft breweries? Shocktop! The beer you buy because you can't pronounce half of Icing. Well, the initial reason we think Tulare is buying Shocktop is the Franken drink trend. The Franken drink trend. That was our first thought. These new drink concoctions that all include enhancements. Look at the drink menu.

You got spike shelters, caffeinated cocktails, hard kombuchas, combination drinks are all over the menu. Another example, the owner of Corona. They make a CBD. water, why not make a CBDIPA. So, Nick, Tillray owns Montauk Brewing. Interesting. And Jack, how would we describe Montauk brewing exactly? The Spike Seltzer of choice for anyone partying at the sloppy tuna. Well, if you're Tilray, the cannabis company, and now you own these breweries, you could do some stuff with that. Maybe you can infuse Montauk brewing with cannabis for your buddy Timmy's Bachelorette party out on Montauk. Timmy, you like craft logger? You're going to love the craft

logger with a hint of weed. But we think there's another reason, a more desperate reason. This cannabis company is acquiring all these has-been beer brands. Yes, we do. So, Jack, what's the takeaway for our buddies over in the cannabis industry? These beers are an oxygen tank because the cannabis industry is running out of breath. Yadis, the future of Tilray's cannabis opportunity. It depends on one thing and one thing only. Federal legalization. Yep, the CEO of Tilray, he's been saying it for years. We have tremendous opportunities upon legalization. But the way Jack and I see it, we hope he's not holding his breath

because there is no sign of federal legalization of cannabis in America right now. And Tilray is not going to profit selling weed just up north in Canada. Tillray wishes it could serve America's cravings by selling everyone cannabis. But it can't. So until it can, it's going to sell them old brea brands that we forgot we're still around. And that's why we think this beer deal is really an oxygen tank. Because Tillray is running out of breath. Shoktoberfest came early because legalization is coming too late.

I was hoping you did that. I was hoping you in Excel. It just felt right. It just felt right. For our third and final story, Barstool Sports just got unacquired by founder Dave Portnoy. He's taking it back. The acquisition of Barstool Sports failed because pirates don't wear ties. Yet he's Jack and I used to work in the finance industry.

And we've told you about the dirty little secret we noticed about mergers and acquisitions. The dirty little secret is that two thirds of deals fail. Two out of three M&A deals just don't work out. And here's one to add to the list. Barstool Sports getting acquired by Penn Gaming. Three years ago, Barstool Sports was sold to a gambling company for half a billion dollars. It was the biggest financial moment for a blog since Pedro Bean, Don Zimmer. Hey, no, ma!

But this week, we learned that Penn wants a refurb. Yeah, they do. Unfortunately for Penn, there's no refunds and mergers and acquisitions. Just called our banker. Goldman says, uh-uh, on the refunds, Jack. So Penn Entertainment just sold back Barstool Sports to Dave Portnoy for an undisclosed amount. And Jack, do we have an idea of what that undisclosed amount was, my friend? Our guess is that the gambling company gave Barstow back to its founder for nothing. Nothing. Jack, we've got to pause the pot and recap that for a quick moment for the Eddies. Dave Portnoy sold his company three years.

ago for $500 million, but just got it back for free. Yates, can you sit down, stand up and just sit with this for a moment? Imagine you built a house with your bare hands and then sold that house to somebody for $500 million, and then that buyer gives the keys back to you for free. Not only that, Jack, it's like the buyer made renovations to improve the house and then they gave you the keys back. For free. For free.

That's what just happened to Dave Bortnoy and Barcelona Sports. Now, Yeties, Jack and I should sprinkle on a little more context here. Because there are some strings attached to the deal. As it turns out, Dave Portnoy has to sign a non-compete, meaning Barstool Sports can't ever, ever again partner with another betting app. And sports betting is the biggest advertiser for a sports media company like Barstool. Oh, another string? Dave Portnoy had to promise that he will never ever launch his own sports betting app. There will not be a part-my-take betting app. And finally, if Barstool Sports were to ever sell itself again, then Penn Gabing would get 50% of the proceeds.

But Dave went on Instagram yesterday to announce the deal and promised he would never, ever, ever sell Barstool again. Yeti's gaining independence did cost Dave Portnoy some things, but independence can be priceless. If you know, you know. So Jack, what's the takeaway for our buddies over at Barstool Sports? Pirates don't wear ties. Yeties, would Penn Gambling want to?

when it bought Barstool Sports was a huge base of sports betting customers. But what it got was someone in the boardroom who would constantly interrupt meetings with Yankee's suck chance. No ma! No ma! Who's with me? Yankee's suck, right? Because yet he's the controversial stuff Barstool published in its podcast kept getting its owner Penn in trouble. Penn operates in the gambling industry, an industry so regulated, you want to avoid controversy

like that. Great point. Like the Kansas Gaming Commission, it could cancel Penn's gambling license just because of some barstool drama. And that's the kind of stuff that was happening after it acquired barstool. The only way that barstool would have worked is if they put a tie on it. But pirates don't wear ties. Jack, can you whip up the takeaways for the new Friday? We work just warned Wall Street that bankruptcy could be coming because it's running out of money. The fundamental problem, no economies of scale. For our second story, Till Ray now owns shocktop beer. What? Because it's an

oxygen tank. The cannabis industry is holding its breath for legalization. And our third and final story is Barstool. It's 100% owned by Dave Portnoy after Penn gave it back to him for free. The acquisition didn't work because pirates don't wear ties. But yet is this pod's not over yet? Here's what else you need to know today. First, UPS just reported that its top drivers are going to make, get this, $170,000 a year at the end of their new contract. And it's all thanks to that new deal that the union struck last week. And second, President Biden just signed a new executive order banning investments in some particular Chinese industries. The U.S. cannot support China in artificial intelligence, semiconductor chips, or quantum computing. And finally, Disney is raising prices for Disney

Plus and cracking down on password sharing. Disney Plus was seven bucks a month when it launched in 2019. It's 14 bucks a month starting in October. Now time for the best fact. Yet, this one's sent in by Stephen Horwitz in lovely Silver Spring, Maryland. Remember the Linda shortage we told you about? Linda Shortch. Jack, I haven't seen a Linda in weeks now. They're anywhere. They're nowhere. Turns out Stephen's wife's name is Linda. And so are lots of songs named Linda.

This, it's an endangered species, but not in the music industry. There are a whopping 579 songs with the name Linda. Barry Manilow, Bruce Springsteen, the Beach Boys. They've all written songs with Linda. in the title. There's even a rock band called the Linda Lindos. They doubled down on the Linda Jack. Linda, turns out it's the 13th most popular

name used in music. Sorry, Susan. Layla is way behind. Yeties, you look fantastic today. And the best way you can help us grow the show every day, turn to that buddy next to you and say, H-Y-H-D-B-O-I. Have you had the best

one yet? Send them a link to the show. Let him have a chance. Extra credit if that person's a Linda. Nick and I, we'll see you tomorrow. If she is, buy her a shocktop. And before we go, happy birthday to Yeti, Fred Frambund, who's turning 39 while climbing Machu Picchu. Fred, send us some picks from up there. Happy birthday to Ayla Anamee Wong in Colorado. And Brandon Littles is celebrating that birthday on a run through Buffalo.

Happy first birthday to Abhay Jane in Irvine, California. And Ari Bell, happy 28th birthday down and boogie down in Nashville. And happy birthday to Linda, Linda Cruz, who's celebrating all. Santa Cruz. That's Arlinda. And congratulations to Leanne Dallin and Aman Cunningham, who just got engaged in Porto, Portugal. Let's see some ring picks, not too shabby. And a big congratulations to Cause and Nikki Kaye, who just adopted a rescue puppy. Troy Boy of Seattle. Congratulations on your new home. Because puppy. Yeah. This is Jack, Islandstock of Unilever, Disney, and Netflix. Quick. Someone will grab the succulents.