Morning Brew - ☕️ High inflation

Netflix is a disaster right now...
April 20, 2022 View Online | Sign Up | Shop

Morning Brew

FarmTogether

Good morning. In honor of 4/20, today’s newsletter also comes in edible form. Wait 45 minutes for the news to kick in.

Neal Freyman, Max Knoblauch, Jamie Wilde

MARKETS

Nasdaq

13,619.66

S&P

4,462.21

Dow

34,911.20

10-Year

2.941%

Bitcoin

$41,313.47

Carnival

$19.91

*Stock data as of market close, cryptocurrency data as of 7:00pm ET. Here's what these numbers mean.

  • Markets: In a flip of 2022’s investing trends, the only sector in the S&P to not increase yesterday was…energy. Travel companies posted strong gains after the federal mask mandate for transportation was scrapped by a judge Monday.
  • Ukraine: Russian forces began their major offensive in eastern Ukraine along a front that extends more than 300 miles, marking the beginning of a new phase of the war in which Russia will attempt to take control of the Luhansk and Donetsk regions. Western leaders responded to the assault by pledging to send more artillery to Ukraine’s military.

COVID

The mask mandate’s bumpy landing

The mask mandate’s bumpy landing

It’s been more than 36 hours since a Florida judge abruptly overturned the CDC’s federal mask mandate for transportation, and Americans are still working out the implications of that…about-face.

Here’s what you need to know:

In the hours after the ruling came down, the Transportation Security Administration (TSA) said it would stop enforcing the mandate on public transportation and planes. Then, US airlines rushed to drop their mask requirements faster than a guy in Group D lines up while first class is boarding.

  • Delta, American, United, Southwest, and other major carriers have made masks optional for passengers and crew on domestic flights.
  • Videos emerged of pilots announcing the new rules mid-flight to cheers, dancing, and even a rousing rendition of, “Throw away your masks.”

Masks had become a major frustration for airlines, which had been lobbying to end the mandate for months. Of the record 7,060 unruly passengers incidents reported since January 2021, 70% involved masking rules, per the FAA.

Airlines aren’t the only ones dropping their mask mandates in the wake of the ruling. Yesterday, Uber and Lyft also dropped their face covering requirement for passengers and drivers, and Amtrak also dropped its mandate.

The US transportation system isn’t fully mask-optional, though. Masks are still being required on:

  • NYC public transit, as well as in taxis and Uber and Lyft vehicles.
  • Chicago public transportation
  • Boston public transit
  • The Los Angeles Metro

Plus, masks are still required at JFK and LaGuardia airports, which means that travelers will be required to wear them while boarding but not once they get on the plane. Same in Philadelphia, where a new indoor mask mandate just took effect.

While that may seem bizarre, experts believe that the risk of contracting Covid is actually higher in enclosed spaces around the airport than the planes themselves, which are equipped with high-quality filtration systems that circulate fresh air when the engines are running.

Looking ahead…the Biden administration said yesterday that it plans to appeal the ruling, but only if the CDC thinks that extending the mask mandate is necessary. Before the judge overturned it, the mandate was set to expire May 3.—NF

        

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WORLD

Tour de headlines

Squid Game character saying 'I'm screwed' Squid Game/Netflix via Giphy

Netflix in freefall. The company’s stock plunged more than 25% after hours when it revealed that it lost subscribers (200,000) last quarter for the first time in more than 10 years, and it plans to lose a lot more (2 million) in the current quarter. The streaming company blamed competition and rampant password sharing for its shrinkage, estimating that more than 100 million nonpaying households use shared passwords. Co-CEO Reed Hastings said he’d be open to offering lower-priced tiers with ads.

Anyone want to help Elon Musk buy Twitter? The mogul is willing to invest between $10 billion and $15 billion of his own money to buy out Twitter, but he’s having “more trouble than expected” in finding co-investors to cover the total offer of $43 billion, per the NY Post. Musk is aiming to launch a hostile tender offer to Twitter shareholders in about 10 days, the Post reported. Here’s how it could go down, maybe.

Better.com can’t stop laying off people. The online mortgage company, infamous for firing 900 people over Zoom last December, held its third mass-layoff in less than five months by reportedly letting 1,000+ employees go. That would mean its employee count has declined from 10,000 in December to less than 5,000 currently, according to TechCrunch.

        

ENTERTAINMENT

Disney’s special district, explained

Disney World's castle on an overcast day Roberto Machado Noa/LightRocket via Getty Images

Florida’s GOP Governor Ron DeSantis ratcheted up his attacks on Disney over its opposition to a law that bans discussion of gender identity and sexual orientation in kids’ classrooms (dubbed the “Don’t Say Gay” law by critics). On Tuesday, DeSantis asked state lawmakers to consider revoking Disney World’s special district.

FYI no, Disney World’s special district does not refer to the restaurant where they sell the massive turkey legs—it’s an administrative zone called the Reedy Creek Improvement District. Encompassing 25,000 acres, it effectively allows the company to operate as a municipal government.

  • Created in 1967 after a lobbying campaign by Walt Disney, Reedy Creek frees the company from seeking local approval when building new structures and exempts it from certain environmental and wastewater codes.
  • Reedy Creek collects property taxes and issues bonds, and more than 90% of its budget comes from Disney—avoiding the more controversial process of, say, funding a new BB-8-themed log flume with taxpayer dollars.
  • If the district were dissolved, some believe it could cost taxpayers, as other local governments would have to service Disney’s parks (something Disney largely does itself at the moment).

Looking ahead: The Florida state legislature is planning a special session this week and could vote on the bill as soon as today.—MK

        

CANNABIS

Inflation’s not out to ruin 4/20, at least

Cannabis bud Francis Scialabba

While other products have taken a hit from inflation, cannabis has passed. In Colorado, the price of a pound of marijuana is $799, near its lowest level on record, per the state’s Department of Revenue.

In fact, cannabis is relatively cheap across the board. Prices for marijuana flower, edible, and vaping products each fell by more than 11% from January 2021 to January 2022. That’s according to Headset, a cannabis analytics company that tracked sales in California, Colorado, Michigan, Nevada, Oregon, and Washington—where prices for the same products can vary wildly.

Why? Since cannabis isn’t legal at the federal level, supply and demand at the state level has a greater influence on its price than on those of federally legal staples like gas, milk, and eggs.

Zoom out: It’s not that cannabis isn’t as affected by the same pressures causing inflation as other industries. Pinched supply chains and increased labor costs have rocked dispensaries and their suppliers. But to compete with both legal and illegal marijuana operations at the state level, businesses are eating the extra costs instead of passing them on to customers.

However, some cannabis business owners are getting worried they’re eating too much…a feeling some of you may experience later today.—JW

        

GRAB BAG

Key performance indicators

Free Money, Step Right Up SpongeBob SquarePants/Paramount Global via Giphy

Stat: Jeff Green, the CEO of ad tech company Trade Desk, received a pay package last year that was valued at $835 million. It is composed mostly of stock awards that can be exercised over the next decade if Trade Desk hits share price targets. Green’s comp is good for No. 1 among the 358 S&P 500 companies that have disclosed 2021 pay for their CEOs, the WSJ reported.

Quote: “We are relieved to see the U.S. mask mandate lift to facilitate global travel as COVID-19 has transitioned to an ordinary seasonal virus.”

Maybe if you’re an airline…don’t dip your toes into epidemiology? Delta Air Lines got blasted by health experts after its statement announcing the end of its mask mandate concluded that Covid-19 amounted to an “ordinary seasonal virus,” which is not the case. Delta later revised its statement.

Read: Meet the woman behind Libs of TikTok who is secretly fueling the right’s outrage machine. (Washington Post)

        

BREW'S BETS

Debate: Are these the 50 best rom-coms?

A new way of keeping track of time: Visualize your day as 144 squares, where each square represents 10 minutes.

Psst: Earth Day is Friday. Show the planet some love. Ever heard of “fast furniture”? Think poorly made pieces that end up in landfills after only a handful of uses. To combat these harmful practices, Outer uses sustainable materials to build beautiful products that last. Check ’em out here.*

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WHAT ELSE IS BREWING

  • The Education Department said it would fix a federal student loan program for low-income borrowers, moving more than 3.6 million of them closer to debt forgiveness.
  • Blackstone bought student housing company American Campus Communities for $12.8 billion, including debt.
  • Meet Elvira Nabiullina, the head of Russia’s central bank who, before the war, had impressed the global banking community.
  • Google Docs could soon get a purple squiggly line that will help you become a better writer. Expect Dickens-level prose in the Brew soon enough.

GAMES

The puzzle section

Word Search: See if you can identify iconic brand mascots in today’s Word Search.

Power play

This chart from the US Energy Information Administration shows electricity generation from all sectors from 1950–2020. Can you match each sector to a color on the chart?

Your options: renewables, coal, natural gas, nuclear, and other.

Chart showing energy generation over time

FROM THE CREW

Learn to overcome your challenges

A blue and orange background with the silhouette of a head on top. "Morning Brew" is written across the top and the word "imposters" in bold is written across the silhouette.

Have you ever felt in over your head at work? Like any day your boss will find out you Google 95% of the things you’re supposed to know? Well, so has everyone—even the people you look up to the most.

To show that nobody has it all figured out, Morning Brew launched a new podcast, Imposters, where the Brew’s executive chairman, Alex Lieberman, sits down with the most respected names in business, sports, and entertainment to talk about how they overcame their personal challenges.

Check out Imposters here.

ANSWER

Mustard: coal
Blue: natural gas
Green: renewables
Red: nuclear
Gray: other

         

Written by Neal Freyman, Max Knoblauch, and Jamie Wilde

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