E-CIG

Juul Gets Vaporized

In a first-of-its-kind deal, e-cigarette company Juul agreed to pay $40 million to North Carolina yesterday to settle allegations that its marketing efforts targeted teens. As part of the agreement, it will abandon any marketing content that appeals to young people and only sell its products behind-the-counter in the state. 

Big picture: From startup rockstar to regulators' punching bag, Juul has been on a roller coaster ride these past few years. 

The boom...

E-cigarette use among teens shot up more than 70% after Juul's launch in 2015, and by 2019, more than a quarter of American teens tried vaping. Juul’s slick, flash-drive-like devices were so widely used in between chemistry and history class that they even became a verb.

When Altria, the tobacco giant that owns Marlboro, bought a 35% stake in Juul in 2018, Juul was valued at $38 billion. To put that number in context, Juul was worth more than Target, Lyft, and Airbnb. 

The bust...

The same year, the FDA called teen vaping an “epidemic” and started to crack down on Juul and other e-cig companies. Although Juul insisted that its products were intended for adults, its marketing strategies said otherwise...

• Juul released fruit-flavored pods that went viral among teens (it's pulled most flavors since).
• It recruited influencers with huge teen followings on social media to advertise the brand. 
• It plastered ads on homework solutions websites, so students solving for "x" would “accidentally” click on them. 

Facing suffocating regulatory challenges around its advertising strategy, Juul cut its valuation to about $10 billion in October 2020. 

Looking ahead...as of last summer, Juul was facing 758 lawsuits across the US. It’s also waiting for a ruling from the FDA about whether its products can remain on the market. That verdict is expected by September.

ANTITRUST

Facebook’s Double Bullseye

Yesterday was better for Facebook than when Brenda Song agreed to be in The Social Network. After a Washington, DC, federal court dismissed two antitrust cases against the company, it became the fifth US firm to reach a $1 trillion market capitalization. 

The backstory: In December, the FTC and a group of attorneys general from 48 states and territories hit Facebook with two lawsuits, alleging the company has a monopoly over personal social networking after its purchases of WhatsApp and Instagram. 

Judge James Boasberg did not think the FTC provided sufficient evidence to back up that argument. “It is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist,” he said.

After the decision, Facebook shares gained 4.2% for its grand entrance into the four-comma dollar club. The first US company to hit a $1 trillion valuation was Apple in 2018, and since then Microsoft, Amazon, and Alphabet have all joined.

Looking ahead...while this is a setback for regulators, Facebook isn’t in the clear yet. The FTC has until July 29 to file an amended complaint and yesterday, the House Judiciary Committee approved all six bills that would give US antitrust law its biggest makeover in decades.

FINANCE

Some Banks Make Sweatpants and Slippers Official Dress Code

While Jamie Dimon is dusting off desks at JPMorgan, other banks are embracing the Zoom life. UBS, the Swiss lending giant, as well as Synchrony Financial, provider of Amazon and PayPal credit cards, both recently announced hybrid work plans that won’t require employees to stand on a sticky train five days a week.

• UBS plans to let two-thirds of its staff work remotely several days a week.
• Synchrony will offer three different office options: permanently remote for those who love their noon showers, satellite locations for employees to reserve desks ad hoc, or hybrid schedules with an assigned desk.

On Wall Street, that’s a narrative violation. In May, JPMorgan and Goldman Sachs announced they would start bringing staff back this summer. And earlier this month, Morgan Stanley CEO James Gorman said that if the company’s New York offices weren’t filled by Labor Day, “We’ll have to have a different kind of conversation.”

Bottom line: Both UBS and Synchrony hope that offering flexible work schedules will help them retain and attract workers, which is necessary since 41% of employees globally are considering leaving their current employer this year.

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GRAB BAG

Key Performance Indicators

Stat: Only 44% of homes in metro Seattle had air conditioning in 2019, the lowest rate of air-conditioned homes of any major American city, according to the US Census Bureau. We bring this up because the Pacific Northwest has been melting under an unheard-of heat wave. Temps in Seattle broke their record by about 7°F yesterday, and Portland was 4° hotter than Atlanta's all-time high.

Quote: “We were most heartbroken when we saw our dear General Secretary had become emaciated. Tears came out naturally.”

A local resident interviewed by North Korean state TV was distressed by images of leader Kim Jong Un’s significant weight loss. Analysts say the media campaign is choreographed to build sympathy for Kim as the country suffers from a worsening economic crisis.

Kim’s health is closely watched by foreign powers, because he hasn’t appointed a successor.

Read: Why does it cost so much to build things in America? (Vox)

TECH

People Are Studying Abroad in Barcelona Again

In a sense. The people are attendees at the Mobile World Congress (MWC), the largest mobile industry trade show, which kicked off in Barcelona yesterday after a one-year hiatus due to the pandemic.

The line for coffee will be much shorter than usual. The show’s organizers are expecting 25,000–30,000 attendees from 143 countries, compared to the more than 100k visitors who have attended MWC in recent years. Lots of safety precautions are in place, including regular Covid tests, masks, and touchless everything.

• A third of the MWC’s speakers, including Elon Musk, will give their talks virtually.

Zoom out: Barcelona hopes enough of those virtual attendees get FOMO and buy plane tickets for next year's show. In a non-Covid year, MWC generates $516 million and 14,000 part-time jobs for the local economy.

Looking ahead...CES, the US' giant consumer electronics show, will be held next January in a hybrid format—both in Las Vegas and digitally.

WHAT ELSE IS BREWING

• Morgan Stanley doubled its dividend and announced a $12 billion share buyback plan after acing the Fed’s stress test. 
• Cathie Wood's Ark Invest filed with the SEC to create a bitcoin ETF.
• Randal Quarles, the Fed’s VP of supervision, expressed skepticism about developing central bank digital currencies. 
• California is banning taxpayer-funded travel to five more states over what it says are discriminatory policies against the LGBTQ+ community.

BREW'S BETS

One day left to get your cut. Graze—the world’s first fully autonomous, 100% electric lawn mower—is disrupting the $100 billion commercial landscaping industry. Now it has the potential to grow your portfolio. But focus up, there’s only ONE day left. Invest in Graze now.*

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Tech Tip Tuesday: Find almost anyone’s email address using this tool.

Lunch and learn: At 1:30pm ET today, Retail Brew is discussing transformations in the post-Covid workplace with Warby Parker co-CEO Dave Gilboa. Register here for an afternoon brain blast. 

On the telly: A list of the best TV shows halfway through 2021.

GAMES

The Puzzle Section

Brew Mini: Solved this one in :51 (little longer than typical). Can you beat that? 

Ticker Trivia 

Know what we haven’t done in a while? Stock ticker trivia. We’ll give you the ticker and you have to name the company. Go 7/7 and the fairy stonkmother will send your portfolio straight up.

1. PZZA
2. HOG
3. WOOF
4. T
5. RACE
6. SPCE
7. BUD

SHARE THE BREW

Food Networking

When you share the Brew with your friends and coworkers this week, you’ll be entered into a raffle to win one of 15 cookware sets from Caraway. 

Remember: The more people you refer, the more likely you’ll be spending the summer impressing all your friends with your fancy kitchen setup because 1 referral = 1 entry.

The raffle lasts just this week, so start racking up your referrals now. 

Click here to share 

*US winners only. For more rules, see terms and conditions here.*

ANSWER

1. PZZA = Papa John's 
2. HOG = Harley-Davidson
3. WOOF = Petco
4. T = AT&T
5. RACE = Ferrari 
6. SPCE = Virgin Galactic 
7. BUD = Anheuser-Busch InBev or AB InBev