INVESTING

Can You Do This in 'Fortnite'? The PIF Thinks Not.

Saudi Arabia's sovereign wealth fund has acquired a 5.7% stake in concert promoter Live Nation worth $500 million, according to a new securities filing. Virtual concerts are all the rage right now, but the Saudis think nothing quite compares to the feeling of spilling $14 beer while telling your friend, "They're soooo good live." 

One fund, many names

A sovereign wealth fund is a state-owned investment fund that can invest in pretty much anything you can think of, from natural resources to public companies. Saudi Arabia’s is called the Public Investment Fund (PIF), and it's chaired by Crown Prince Mohammed bin Salman, whose name you’ve probably heard thrown around in conjunction with oil cuts in recent weeks. 

But if oil is bad business right now, live concerts might be worse. After booking $11.5 billion in revenue last year, Live Nation expects a 20% drop in Q1 sales. The company’s stock price has also performed a stage dive, dropping over 40% as physical concerts take the year off. 

The PIF’s play?

Focus on companies hit hardest by the coronavirus. Along with Live Nation, the PIF has made recent investments in battered cruise line operator Carnival as well as multiple European oil companies.

• Also in Europe: In a move supported by 97% of the club’s fans, the PIF is close to completing a $380 million deal to become a majority owner of the Premier League soccer club Newcastle United. 

Worth noting: While Knicks fans understand Newcastle’s excitement for a change in ownership, other companies have been less inclined to take money from a regime deemed responsible by U.S. intelligence for the murder of Washington Post journalist Jamal Khashoggi.

• Endeavor, the parent company of the UFC and Miss Universe, returned a $400 million investment from the PIF following Khashoggi’s death. 

Bottom line: After big money investments in Uber and SoftBank’s Vision Fund have yet to turn profitable, the PIF looks to be pursuing a different strategy—bargain hunting. 

FOOD

Breaking: The Food Supply Chain

So said Tyson Foods Chairman John Tyson in a letter published in several major U.S. newspapers on Sunday. Tyson, one of the country’s top meat producers, has shuttered several plants after workers fell ill with the coronavirus. With slaughterhouses closed even temporarily, “millions of pounds of meat will disappear from the supply chain.” 

Zoom out: Tyson is one of several meat processors that have closed plants due to COVID-19 outbreaks among workers. Industry leaders Smithfield Foods and JBS have both powered down some U.S. facilities and warned about meat shortages. 

• Nearly a third of U.S. pork processing capacity is currently offline.
• Factory closures have severe domino effects for rural communities. John Tyson explained that “farmers across the nation simply will not have anywhere to sell their livestock to be processed.” Some have been forced to euthanize their pigs.

Looking ahead...fear of shortages means a spike in prices. U.S. wholesale pork prices were up nearly 30% last week, Bloomberg reports, and wholesale beef hit a record high. 

RETAIL

Testing, Testing…

Yesterday afternoon, President Trump and retail chains announced an expansion of testing capacity at locations across the country. Trump said the government is ready to send states supplies to test at least 2% of their populations. 

Maybe the sequel will be better. On March 13, President Trump and major retailers including Walmart, Target, CVS, and Walgreens pledged to launch coronavirus testing in their parking lots. About 70 testing sites have opened at drugstores and retailers since then—not a significant amount. 

• Along with Rite Aid, Kroger, and other chains, CVS aims to play a major role in the new rollout. As it ramps up capacity to process 1.5 million tests per month by the end of May, it will expand testing locations to 1,000 U.S. stores (provided it has sufficient supplies). 

Bottom line: Public health officials and business executives agree the only way to get people back to work again is to test, test, then test some more. The U.S. needs to accelerate testing by about 200,000 tests per day to safely open up the economy, experts say. 

SPONSORED BY COINDESK

Start Making Cents

The global economy isn’t doing so hot, so borrowers and savers are checking new ways to protect their future. And a new generation of investors have turned to user-generated currency.

Consensus Distributed is a 5-day virtual event where a bunch of smart people are going to get to the bottom of the user-generated currency trend. If you sign up—which you should—you’ll learn all about cryptocurrencies like bitcoin and decentralized finance.

It’s free to attend. There’ll be 150+ speakers and 100+ live sessions. There’ll be interactive keynotes, including Q&As with the big cheese of crypto, blockchain, government, academia, and entertainment. The big cheese shop is going to be practically out of big cheeses.

For all that, plus unparalleled networking and hands-on workshops, check out Consensus Distributed from May 11–15.

INTERNATIONAL

It's Official: Vegemite Scares Away Coronavirus

Sorry Kiwis and Aussies, we're grouping you together just for this one story. But it's a good thing. 

With new daily coronavirus cases in the single digits, Australia plans to ease some restrictions in the coming weeks (but never one to miss the tail end of surf season, already opened some beaches). And New Zealand’s reopening schools, childcare, and some businesses after reporting just one new case on Monday. Prime Minister Jacinda Ardern declared “There is no widespread undetected community transmission in New Zealand...we have won that battle." 

• While South Korea might’ve resumed domestic tourism, Australia and New Zealand are considering one step further: reopening their borders and creating a tourism “bubble.” As each other’s largest source of hostel patrons, it could rekindle their waterlogged travel industries.

Looking ahead...New Zealand and Australia are taking a breather, but not relaxing. Contact tracing and testing programs will remain in place as they brace for a potential second wave in the winter.

+ While we’re here: Vietnam began opening restaurants and stores last Thursday after three grueling weeks of containment...and not a single COVID-19 death.

AUTO

Employees at Volkswagen's plant in Wolfsburg, Germany—the biggest in the industry—went back to work yesterday for the first time since March 19. 

It's not an easy transition. Managers were alarmed when workers began making sourdough instead of Jettas. And they'll now be required to enforce 100 new policies to protect worker safety, CNN reports. Those changes include...

• Using elbows to open doors
• 8,000 production line workers per shift instead of the typical 20,000
• Workers are not allowed to hand each other tools 
• No more water coolers, so they'll have to find another place to discuss the trivia question in the Brew

Bottom line: The plant is back...but at 10%–15% of total capacity. 

POKER TOURNAMENT

The Best Feeling in the World

And it's even better online because there's no germs on the chips. We're talking, of course, about our charity poker tournament Chipping in for COVID. It's taking place this weekend, and all proceeds will go to Frontline Foods, a nonprofit organization that supports restaurants providing food to workers on the front lines of this pandemic.

Did we mention there will be business celebrities? Like the CEO of Nasdaq, the cofounder of DoorDash, and many more legends you'll want to take virtual money from.  

How you can participate: $100 will get you a seat at the table. .

• Not into poker? You can still donate any amount to support the cause .

WHAT ELSE IS BREWING

• Boeing CEO to shareholders: Air travel demand will take two to three years to recover to 2019 levels.
• Tesla started pushing out a software update that allows its vehicles to recognize and respond to stop signs and traffic lights.
• Apple is delaying mass production of its latest flagship iPhones by about a month, the WSJ reports.
• The U.S. Supreme Court ruled that insurers are entitled to $12 billion from the government for losses sustained during the early years of Obamacare.
• Things to look forward to: YouTube is launching a digital film festival with 20 partners. And Star Wars: Rise of Skywalker is coming to Disney+ on Monday.
• The Los Angeles Lakers returned the $4.6 million they received through the PPP.

BREW'S BETS

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COLLEGE ROAD TRIP

Florida Boy Craig McFarland has been accepted to all eight Ivy League schools for the fall semester. Forget COVID-19 for a sec—if he wanted to visit all the Ivies on a single road trip, in what order should he visit the schools to cover the least amount of distance in terms of miles traveled? 

COLLEGE ROAD TRIP ANSWER

Cornell → Penn → Princeton → Columbia → Yale → Brown → Harvard → Dartmouth (or the reverse)