The Best One Yet - 👛 “The ROI on the IRS” — America’s 12x tax return. Alani Nu’s $2B hot girl drink. Alibaba’s new religion.

Episode Date: February 24, 2025

Energy drink Alani Nu sold to Celsius for $1.8B… so we explain how to pick an acquisition price.Alibaba is the Amazon of China & its stock has doubled… because AI is its new religion.We just found the ROI on the IRS… For every $1 we put into the IRS, we get $12 back.Plus, Birkenstock just argued to a judge that its sandals should legally be art…$CELH $BABA $BIRKWant more business storytelling from us? Check out the latest episode of our new weekly deepdive show: The untold origin story of… the Patagonia Fleece 🐑. Subscribe to The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinks to listen.“The Best Idea Yet”: The untold origin stories of the products you’re obsessed with — From the McDonald’s Happy Meal to Birkenstock’s sandal to Nintendo’s Super Mario Brothers to Sriracha. New 45-minute episodes drop weekly.—-----------------------------------------------------Subscribe to our new (2nd) show… The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinksEpisodes drop weekly. It’s The Best Idea Yet.GET ON THE POD: Submit a shoutout or fact: https://tboypod.com/shoutouts FOR MORE NICK & JACK: Newsletter: https://tboypod.com/newsletter Connect with Nick: https://www.linkedin.com/in/nicolas-martell/ Connect with Jack: https://www.linkedin.com/in/jack-crivici-kramer/ SOCIALS:Instagram: https://www.instagram.com/tboypod TikTok: https://www.tiktok.com/@tboypodYouTube: https://www.youtube.com/@tboypod Anything else: https://tboypod.com/ Subscribe to our new (2nd) show… The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinksEpisodes drop weekly. It’s The Best Idea Yet. Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. Welcome back. It is Monday, February 24th. And today's pod. At all the pods is the best one yet. The top three pop business news stories you need to know today. Day 54 of Apple not doing our smart toilet idea. I can't believe it, Jack. Oh, I thought you were going to say day 54 of me still being here. Still don't have the eye toilet. Still don't have Jack's third kid. Jack, three stories for today's show. What do we got on the pod, man? For our first story, Alani New is the Cardassadown. of energy drinks. And Alani was just acquired for $1.8 billion by Celsius, so we'll explain how they got that very specific number. For our second story, Alibaba is the Amazon of China, and its stock has doubled in the last year. But their founder disappeared for years, and now he's back. And that detail tells you everything you need to know, Jack. And our third and final story. Since the IRS has been targeted by Doge for job cuts, we just calculated the ROI on the IRS. For every $1 we put into the tax agency, we'll tell you what we actually get paid.

But, Yeties, before we hit that wonderful mix of stories. Oh, what a mix of stories. Love the mix. What is art? What is art, Jack? Is it a painting, a sculpture, a song, a film? Or is art a Birkenstock? Because here's the news, Yeties. Burkinstock legally filed for its sandal to be a classified work of art. Yeah, they claim their footwear should legally be protected just like a Jackson Pollock painting. Why are they doing this? Because of dupes. Cheap Birkenstock knockoffs are everywhere. Reddors have gone rabid with recommendations for knockoff Birkenstock brands every single day. And Birkenstock is sick of it. So they want artistic copyright protection to stop the copycats. However, here, here, a German judge disagrees. As fashionable as Birkenstock may be, they say sandals are legally not

art. However, here here, we respectfully disagree with that judge. Your honor, may I approach the bench? Because the cork footbread, is it not a collage? Your honor is the brass buckle not a sculpture? If art is the expression of human skill, is not the Birkenstock sandal, but the Mona Lisa of the foot? I mean, honestly, art touches the human soul. But the Birkenstock touches your literal soul. Yeah, he's Nick and I didn't go to law school. No. We didn't go to art school either. But we're pretty sure that Birkenstock is the new Bada Chow. If you know, you know, Jack, let's sit on three stories. Fifteen years before this song, two boys from the Northeast met in the dorm.

They had an idea that caused a cultural storm. It's the best one yet, but the best is a norm. That's it. I don't even think they need to practice. 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. Start the show. First, a quick word from our sponsor. For our first story, Celsius Energy is buying energy drink icon Alani New for $1.8 billion. Alani is the Kim K of energy drinks, so we'll explain its acquisition price. Jack, let's go back to 2023. Do you remember we did a story on Celsius? And what was Celsius energy stock doing at the time? It was the top performing stock of the last five years. Celsius stock,

was up 4,000% and energy drink stock. Now, since then, Celsius has cooled down. Yeah, literally. Yeah, their North American sales shrank for the last two quarters, and the stock has fallen 75%. But not anymore,

because on Friday, Celsius stock surged for its best day on the stock market in years. And why was that, Jack? Hot girl energy. Boom, here's the news. Celsius acquired fast-growing energy drink startup Alani Nu for $1.8 billion. If you can't beat them, buy them.

Alani knew, the female-focused energy drink slash supplement slash protein powder brand, baby. It's monster energy if it only had X chromosome. Alani knew. The cans are pink and the cans are poppy. If Barbie did SoulCy, she'd pound in Alani afterwards. It's basically the Fifth Kardashian, but it can do Pilates and a triathlon in the same day. Now, here's what Nick and I found fascinating about this story.

Despite all the attention recently on liquor, beer, sparkling water, spike seltzer, prebiotic sodas, one beverage category is beating all the others. Energy drinks. It turns out 12 ounce energy drinks are outpaced in coffee these days. That's why every influencer has launched their own energy drink. It's a booming market. We've been even told we should launch an energy drink because we hit the takeaways pretty hard. It's a good amount of energy we got in

the show. Because Gen Z has ditched double-digit lattes for single-digit red But here's the interesting detail Jack and I want to focus on. Jack, what's the stat? There are twice as many men buying energy drinks as women. Yeah, your buddy, Timmy, is the one who's pounded in a 10-hour power these days. So there's two ways to interpret that data. One is that women don't like energy drinks. Okay.

Or maybe there's just no energy drinks marketed to women. Well, Katie Hearn, the fitness influencer, bet on the latter of those two interpretations. And she created a brand that has become the skims of softs. supplements. And now her Alani new sales are up 80% in the last year, and she just sold the brand for 1.8 billion bucks. Like we said, hot girl energy. She realized basically that the problem wasn't the demand of energy drinks among women. It was the supply of energy drinks for women. Nobody was supplying the market with lady-focused energy drinks. But Bessie's Jack and I were studying this story, and we thought, you know what, Alani knew is actually the perfect case study here. Because

Because how did the two sides decide $1.8 billion was the price for this deal? Well, the answer is our takeaway. So, Jack, what's the takeaway for our buddies over at Alani Nu? The way that Wall Street decides price tags is money follows multiples. Yeah, it is. Why did a fast-growing women's energy drink with $600 million in sales get acquired for $1.8 billion? Every deal has its own negotiation. True, true, true.

But that number wasn't random. In fact, we could have predicted the $1.8 billion price. And that is because one classic way to determine a company's value is to look at multiples in the industry. Multiples. When you look at the acquisition prices of other recent exits in the food and beverage industry, and then compare it to your deal. Yeah, what's the math? What's the formula on that exactly, Jack?

You look at the sales price of the acquisition, divided by the revenue of the company, and that's your multiple. So, for example, Simple Mills sold for a price that was three and a half times its sales. Ghost Energy sold for a price that was three times at sales. And Siette Foods sold for a price that was two and a half times in sales. So the average exit for a fast-growing food and beverage company is at a valuation that is three times as big as the company's annual sales. Well, Jack, let's look at the whiteboard. Alani was doing $600 million in energy drink sales, so multiply that by three. and you get $1.8 billion.

Boom. That's the deal price. Yes, it is. Alani New shows how Wall Street uses multiples to calculate billion dollar price tags. For our second story, Alibaba is back, baby. But the Chinese e-commerce titan has converted religions to AI.

And we'll tell you why Americans have been buying up stock in Alibaba. But Yetis, in order to tell the story of Ali Baba. Jack, I just texted you something. Can you please describe what I just texted you on your phone? I'm looking at a custom gorilla sofa living room furniture set available on Alibaba to ship to my home. It's a gigantic gorilla whose arms are enveloping a love seat sofa. Yeah, so that's the kind of thing you buy on Alibaba. A seven-foot gorilla-shaped sofa for $1,000. The head of this gorilla is huge, and it sits above your head because you're sitting on the sofa.

Can't buy that on Amazon. Yet he's Alibaba. We used to own the stock because back in 2014, Alibaba had the biggest IPO in New York Stock Exchange history. By far. By far. Now, you may not know Alibaba, but everyone in China does, that's a guarantee. Because Alibaba is China's Amazon. And Alibaba was led by China's Steve Jobs, a man named Jack Ma. Alibaba was once worth nearly $1 trillion until that man, Nick just mentioned. Jack Ma, disappeared. A true story.

Disappeared? We didn't know where he was. Here's what happened. Jack Ma said something that the Chinese government didn't like, and then he disappeared, and no one knew what happened to him. After Alibaba's CEO criticized financial regulators,

the stock fell 80% and he just went missing. We honestly thought he had been killed. No idea where it was. But now he's back in President Xi's good graces. As we say, what president she wants, she gets. And so since Jack Ma is back, so is Alibaba stock. It's up 70% just so far in 2025.

But Jack, let's pause the pod for a second and dig into that one a little more. Why is Alibaba back, baby? Because Alibaba found a new religion which President She worships. It's called Artificial General Intelligence. Artificial General Intelligence. We'll explain that in a second. But in the meantime, Jack, let's share that hero stat that says, that's all of this up. Last week, Microsoft CEO, Satchinadella, said that artificial general intelligence

would triple the world's GDP growth from 3% today to 10% tomorrow. And since leading that is China's priority, their crackdown on tech is over and Alibaba's Jack Ma is back in their good graces. And now that tech is blessed by the government again, Jack Ma's Alibaba announced a new mission for his company. And here it is. Our first and foremost goal is the person. of artificial general intelligence. It's shortened to AGI. AGI is when artificial intelligence is so powerful that it is equal or greater than human intelligence. You will be speaking with computers in such a way you will have no idea if it's your buddy Timmy or if it's bought Timmy. Here's the crazy part though. With AGI, Jack Ma could tell his AI model, hey, run the company to maximize

profits. Then he could just retire, sit back, and watch as AI performed his CEO job better than he would have. That's why AGI is Alibaba's new religion. It could let humans just stop working, assuming they have like a desk job, because your desk job will be performed better by your AI chatbot. And China's so excited about that new religion. They're supporting Alibaba, and the stock is nearly doubled. Side note, Alibaba was also in the news last week because they partnered with Apple. All iPhones in China are going to be powered by Alibaba's AI. Siri is kind of an Alibaba employee, too. So Jack, what's the takeaway for our buddies over at Alibaba? From an investing perspective, Alibaba is a hedge on American everything. Yeti's, Alibaba is the Amazon of China. It's worth

$400 billion. Its core business is huge. It is profitable. And it is e-commerce. But it also wants to become the Open AI of China, pursuing the highest form of artificial. official intelligence. Well, right now, America's economy is bigger and growing faster and is more tech advanced than China. But investors always want to hedge. And Alibaba, a stock traded on the New York Stock Exchange could be that hedge. This is not investment advice. We used to own the stock. We don't even really own it anymore. But this is just really interesting to imagine. What if China wins the trade war? What if China wins the AI race? If those things happen, then Alibaba would win too. So from an investing perspective, Alibaba is really the hedge on American everything.

Now a quick word from our sponsor. For our third and final story, Doge has turned its chainsaw toward the IRS. Last week, they cut 6,700 jobs at the tax agency. So we calculated the ROI on the IRS, and it may actually be the best investment America can do. Okay, we'll hit the numbers yeties. But in the meantime, Jack, one of the most poetic descriptions of a government agency we have ever heard, can you please share it with us? John Oliver once compared the Internal Revenue Service to our butts. Yes, to our butts.

They're dirty, nobody likes it. Boy, are we glad that we have them? Well, Donald Trump thinks that there's also waste, fraud, and money to be saved in the IRS Internal Revenue Service. So Elon's Doge jumped in last week. Elon axed 6,700 IRS workers on Thursday, just as we're all preparing to file our taxes. Some more of those numbers, that represents 8% of the 83,000 people working full-time on taxes at the IRS. Now, there is a huge efficiency opportunity at the IRS. Yeah, there is if we cut waste or if we could file taxes online, like someone deserves an award if we could make that happen.

The IRS has a $16 billion annual budget. If we can match these job cuts, with some kind of tech automation, that would be a huge efficiency win for everyone. I don't want to double down on this, but again, there were rumors last year, Doge would create a free tax app and you could file online. Again, huge opportunity. Because in America, you basically have to pay 100 bucks to one of those two tax filing companies so they can file taxes for you. That doesn't have to be the way it is. Not to play Carmen San Diego here, but over in Estonia, they do all their taxes online and it takes three minutes in Estonia. Well, so far, the IRS cuts have only focused on cutting jobs. We don't

have a free tax app yet. So most of those firings, by the way, they happen to be the most junior employees at the IRS. So the biggest efficiency gain to our tax system, it's actually one clear answer. Simplifying the tax code. Jack and I are in accountants, but 70,000 pages of tax code feels kind of long for the tax code. We should point out, though, that simplifying the tax code would require Congress. But the best investment in our our tax system also happens to be very, very clear. More tax enforcement. Because Yetis, regardless of how long, how short, how much you like or dislike taxes are, how do we actually make sure the people who owe the taxes actually pay them? Answer is our takeaway. Yes,

it is. So Jaggle, what's the takeaway for our buddies who are everyone paying taxes? The IRS has the biggest ROI in all of government. We got the receipts. Yeties, here. is the hero stat. For every $1 that we spend in tax enforcement, we collect $12 in tax revenue. That is a 12x return. The amount we spend on tax enforcement gets 12 times as much back to America.

And the flip side of that is that every $1 we cut from tax enforcement, we end up losing $12 from people who don't pay the taxes they owe. Because yet is the reality about the American tax system is that people cheat. And the likeliest to cheat happens. to usually be the wealthy. Because most

taxpayers' taxes are paid automatically by their employer. We see the withholding taxes line on our W-2. That's taxes automatically paid. But the rich make most of their income through investments, so they mostly self-report the taxes they are. So follow us here.

Without tax enforcement from the IRS, it's easier to cheat. Because if there's no fear of being audited, then there's basically no consequences to cheat it. So add it all up, besties, and cutting waste at the IRS, simplifying the tax code? Yeah, those are huge wins by Doge and Congress if they happen. Fantastic. But cutting enforcement would be a huge mistake. We wouldn't save money. We'd

actually lose 12 times as much money. Because of the IRS ROI. Every $1 spent on enforcement yields $12 in tax revenue. Jack, could you whip up the takeaways for us to kick off the week? Celsius acquired Alani New, the leading energy drink for women, for $1.8 billion. How did they decide on that price tag? Well, it was three-time sales, because money follows multiples. For our second story, Alibaba is back in the government's good graces now that it's pursuing AGI. From an investment perspective, again, not investment advice.

Alibaba is a hedge on American everything. And our third and final story. The IRS has cut 6,700 jobs. The big question is whether those cuts are waste or tax enforcers. Because for every $1 spent on tax. enforcement, we get $12 in taxes collected. That is the IRS ROI. By the way, that's according to a paper published this month in the quarterly journal of economics. Which Jack and I read every three months. But Yeties, this pod's not over yet. Here's what else you need to know today. First, we got an

update on the eggflation situation. Shake Shack's CEO says that high egg prices are driving people to chicken and beef now. Because egg prices rose again, last month, you're switching to burgers and wings to get your protein fixed. So that increased demand for meat is eventually going to increase meat prices. What we're saying is eggflation could lead to steakflation. I know you had a good one. Second, Disney World is reportedly going to change their pricing strategy when it comes to theme parks. Disney is going to shift over to dynamic pricing, just like airlines and hotels.

What we're saying is, as demand spikes for Disney tickets, Disney's going to jack up the prices. And as demand falls for Disney, Disney. world, they're going to drop the prices. They're already doing this over at Disney Paris. It's basically surge pricing just to see Tinkerbell. And finally, the New York Yankees owner, Hal Steinbrunner, announced a major policy change for anyone wearing pinstripes. Yeties, they are now ending the famous anti-beard policy of the New York Yankees.

Forever, it's been against the rules of the Yankees to have a beard if you're a player. If you're stepping up to Bad in Yankee Stadium, you better be clean-shaven. That was the rule. were the only thing that was allowed. I kind of loved this rule, to be honest. I loved the giant. It was a differentiator for the Yankees that I always appreciated. Yeah.

They also never had their names on the backs of their jerseys. Even if the Yankees were losing, we always just looked sharper than the competition. But now, well-groomed beards are permitted. Still should shave, though, guys. Even though I'm a beard guy. I'm sad to see it go. Well, they weren't drafting you anytime soon, Jack. Time for the best fact.

Yeah, this one sent in by Danielle Harris from lovely Berea. Kentucky. Last week, we told you that KFC was shockingly moving out of Kentucky into Texas. That's right. Kentucky Fried Chicken is now based in the state of Texas. But get this, Texas Roadhouse, another restaurant chain, is actually based in Kentucky. So KFC is based in Texas, but Texas Roadhouse is based in Kentucky. Kentucky Fried Chicken is in Texas. Texas Roadhouse is in Kentucky. Basically, balance has now been restored to the universe. Although, Jack, I don't want to break your heart as a former employee, but you know the Olive Garden isn't actually headquartered in Tuscanay. I'm going to act like you didn't say that.

Yeties, you look fantastic over there. Jack, the IPO, the initial baby offering could be any moment now. We're hoping for a girl because we already have two boys, but I'm the third boy in my family. So if we have a third boy, that'd be amazing. And of course, any healthy baby is a huge way. Now, besties, the best way you can help grow the show is turn to your buddy next to work and say, hey, H-Y-H-T-B-O-I. I love this pod. You're going to love it, too. Have you had the best one yet? If you know, you know, Jack and I will see you,

hopefully, for T-Boy Tuesday. Is that too much with the hopefully? Is that confusing? And before we go, a happy birthday to legendary little Yeti, Alexander Tunney, over in Greenwich, Connecticut. And happy birthday to Tam Shire in New York City. And Kevin Medrano down in Fort Worth, Texas, celebrating the birthday in,

Japan. Have fun over there, Kevin. And now a big, happy 11th birthday to Isaiah Alvarez in Long Beach. And Ui Snyder's turn in seven with a fantastic birthday in Spokane, Washington. Happy birthday to Vishnu Moral in Massachusetts, just outside Boston. And Crystal Mena Kaffati down in Honduras is launching a fragrance brand soon, but in the meantime, celebrating the birthday. And happy anniversary to Albert and Dr. Veronica Juarez in San Juan, Puerto Rico. Keep wearing those vans. and Bub's Quake Gloss down in D.C. have got a six-year anniversary celebrated fantastically.

And to anyone else celebrating something today, make it a T-boy. Celebrate the wins. This is Jack. I own stock in Amazon and Disney. Nick owned stock in Alibaba and ShakeShack. And we both own stock in Apple.