The Little IPO That Could

Plus: When Pixar ruled the Earth. That long ago. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

June 16, 2023

Read in Browser

TOGETHER WITH

Good morning and Happy Friday.

Australian airline Qantas plans to offer non-stop flights from Sydney to New York and London, which would have passengers up in the air for nearly a day. In addition to mitigating transfers and layovers, the new flight, which is set to debut in 2025, aims to provide a luxurious experience onboard its fancy new Airbus planes.

First class will essentially feel like checking into a hotel as the enclosed suites include TVs, dining tables, recliners, and beds. The planes will also have “Wellbeing Zones,” where passengers can stretch and follow guided exercises on monitors. Sounds like the only thing missing is in-unit laundry.

Morning Brief

•

Will Cava’s IPO revive the IPO market?

•

Snap plugs users’ AI chit-chat into its ad machine.

•

Disney don’t make cartoons like they used to.

Macroeconomics

Does Cava’s Massive IPO Suggest a Shifting Landscape?

It’s an oasis in the desert, a sanctuary for restless capital. It’s a — two words — vibe shift.

Amid a dismal year for the IPO market, fast-casual Mediterranean lunch spot Cava on Thursday made its public trading debut. Its share price immediately popped as much as 113%, marking one of the stock market’s most explosive entrances in the past two years even though the company has yet to turn a profit. So is Wall Street partying like it’s 2020 again?

It’s All Greek To Me

Until now, the IPO market has been remarkable in its bleakness. The US has seen just over 40 IPOs so far this year, raising $7.3 billion in the process, according to Renaissance Capital data — which puts the market cleanly on track to lap last year’s 71 IPOs that raised just $7.7 billion. But it’s a pittance compared to the 397 public market debuts in 2021 that raised a staggering $142 billion. And to put this year’s market in perspective, the $4.3 billion largest debut of the year, Johnson & Johnson consumer health spinoff Kenvue Inc.’s IPO, accounted for roughly 40% of all money raised on US exchanges before the Cava listing.

But recent history didn’t deter Cava, nor its investors. The pita purveyors raised $318 million and sold over 14 million shares for $22 a pop, an elevated price from the $19 to $20 range it had initially marketed them at. Shares traded at $43.78 upon market close Thursday, a remarkable nearly 100% spike. Analysts say it could mark an IPO revival among similarly growth-focused companies, in the restaurant space at least:

•

Despite not turning a profit yet, Cava, which operates 263 locations, has been able to juice revenues while increasing costs each of the past few years. In Q1, its net loss amounted to $2.1 million on revenue of more than $200 million, compared to a $20 million net loss on revenue of nearly $160 million in the same period last year, SEC filings show.

•

Now, according to Bloomberg, industry watchers see an opening for competitors in the space such as Panera Bread, Fat Brands’ sports bar business, and Fogo de Chao to pursue long-milled IPOs.

“The strong pricing for the deal indicates the improved sentiment for higher-quality US domiciled specialty IPOs,” Josef Schuster, founder and CEO of IPOX Schuster, told Bloomberg. “The combined online and offline strategy in a fast-growing niche industry has increased the attractiveness of the deal.”

If You Start Me Up: Optimism has even returned to the lately forlorn tech sector. The tech-anchored S&P 500 is up some 15% year-to-date. Meanwhile, AI-focused startups have scored more funding than they know what to do with, raising $12.7 billion in the year through May after raising just $4.8 billion last year. Earlier this week, the Paris-based startup Mistral AI raised $113 million in a seed funding round… just four weeks into its existence. Capital markets, clearly, are hungry again. And, hey, it’s Paris, so at least we know they’ll put their lunch budgets to good use.

– Brian Boyle

Tech

Snap Uses AI Chatbot Data for Advertising, Of Course

You can’t teach an old dog new tricks, and apparently generative AI is yet to get smarter than a dog.

Snap, like its larger Silicon Valley brethren, has got a generative AI chatbot capable of hobnobbing with users. What might seem like idle generated chit-chat, however, is being turned into a trove of data that Snap plans to use to target users with ads. It’s a business model you may have heard of.

Snap To It

Snapchat may have faded from the cultural consciousness a bit, but the app still has millions of users — 750 million monthly active users to be precise. In February Snapchat launched My AI, a chatbot underpinned by ChatGPT that’s currently available to all users (after initially being available only to those who pay the $3.99 monthly subscription for Snapchat+).

On Thursday the company said users have sent 10 billion messages to My AI, and guess what? That’s a lot of useful data:

•

Snap found users ask My AI for recommendations, meaning Snap could offer advertisers the chance to slot their ads in at relevant points in a conversation with the bot. The company has already tinkered with inserting sponsored links into the bot’s conversations.

•

More generally a user’s chat data could give clues about their interests, meaning that data could be bundled up for targeted ads outside of their discussions with My AI.

If Snap hoovering up data for targeted ads sounds creepily familiar, wait until you hear about Uber. The company’s apps will start displaying video ads, bringing it closer in line with those weird free apps you have on your phone that autoplay ads for even weirder, obscure mobile games.

Not Creepy At All: Unlike those apps though, Uber will be tapping into its own trove of personal data about you, including your travel and purchase history, while you anxiously check your app to see how far your cab is. “We have two minutes of your attention. We know where you are, we know where you are going to, we know what you have eaten,” Uber’s ad chief Mark Grether told The Wall Street Journal, adding: “We can use all of that to then basically target a video ad towards you.” That is, if users aren’t too busy frantically texting their driver to say they’ve gone down the wrong road.

– Isobel Asher Hamilton

Sponsored by LMNT

From Everyman to Ironmen, We All Need This One Thing

Electrolytes.

Regardless of whether you’re a sedentary office worker, a triathlete, or somewhere in between (hungover Sunday workout class attendees, lookin’ at you), we pretty much all aren’t getting enough electrolytes.

See, research indicates that optimum health outcomes occur at sodium levels 2-3x government recommendations…but that doesn’t mean it’s time to dump salt on your food. Instead, try LMNT’s easy and delicious Electrolyte Mix.

Just one packet of LMNT can help:

•

Prevent headaches and muscle cramps

•

Fight fatigue and sleeplessness

•

Boost performance and recovery

The best part? You get all those benefits without any of the unnecessary junk. LMNT contains no sugar, no coloring, no gluten, no fillers, and no artificial ingredients – just the electrolytes you need to feel better every day.

Try a free sample pack with any purchase of LMNT right here and see how much better you feel.

Media

Pixar’s ‘Elemental’ Likely Won’t Fix Disney’s Animation Problem

(Photo Credit: Seif Ak/Unsplash)

The Magic Kingdom has an animation problem that can’t be solved by another Buzz Lightyear sequel.

As it faces competition from more innovative studios, Disney is losing its grip on animation, and it looks like its latest Pixar project Elemental, a Romeo and Juliet-esque story between sentient water and fire creatures, isn’t going to make a big splash among audiences.

No Longer a Hit Factory

From the 1990s to the early 2010s, Pixar was Disney’s crown jewel, consistently delivering gut-wrenching and visually stunning films enjoyed by all. But after one too many unnecessary sequels, lame cash grab spinoff series on Disney+, and animation that while smooth as heck refuses to try something new, Pixar has been on a long stretch of mediocrity. The Wrap reported that Elemental is on track to make below $40 million in its opening weekend, one of the lowest in Pixar history.

And that’s not because people aren’t going to the movies. Universal/Illuminations’ The Super Mario Bros. Movie earned more than $1.3 billion at the box office, and Sony’s Across the Spider-Verse, whose visual language feels like a rollercoaster ride through various eras of comic book art styles, has already raked in $405 million in just two weeks. Compare that to Disney and Pixar’s latest animated offerings — Strange World and Lightyear — which made roughly $300 million combined. Disney was founded on quality animation and storytelling, but when that fundamental element is neglected, issues can be found throughout the rest of the company:

•

The recently released The Little Mermaid live-action remake is likely to top out at around a $500 million worldwide box office haul, well below the $1 billion mark crossed by other recent remakes like The Lion King, Aladdin, and Beauty and the Beast. Meanwhile, Disney’s Marvel slate has proven less potent so far this year than usual, and the company just announced a series of major delays in its release schedule for Marvel, Star Wars, and Avatar sequels.

•

Worse, Disney reported that Disney+ lost 4 million subscribers in Q2, following a 2.4 million dip in Q1. And while Disney World’s Magic Kingdom in Orlando topped the list as the world’s most-visited theme park in 2022 with 17.13 million visitors, it’s still down from 2019’s 20.96 million.

A Whole New Expensive World: For superfans, the ultimate Disney experience just got a little more expensive. The “Adventures by Disney” travel package offers 75 guests an all-inclusive, 24-day trip around the world visiting Disney theme parks and other sites like the Taj Mahal, the Great Pyramids, and the Eiffel Tower. It used to be $110,000, but as a returning Bob Iger looks to clean up Bob Chapek’s mess and cut costs, the price has been bumped up by another $5,000.

–Griffin Kelly

Extra Upside

•

Beat the heat: UPS agrees to union demands and we’ll equip delivery trucks with air conditioners.

•

Sing about it: Ticketmaster, SeatGeek, and Airbnb will stop hiding “junk fees.”

•

Hindsight 20/20: The new FTX CEO has some choice words for the company’s previous leadership.

Just For Fun

Blink and you miss it.

Head over heels.

Note: The Daily Upside will be taking a break over Juneteenth. Have a great weekend and see you next Tuesday!

ADVERTISE // CAREERS

No longer want to receive these emails? Unsubscribe here.

//campaignmonitornewsletter.everestengagement.com/ea/BntD2QJCyg/?e=postie@btcnews.com.au’ width=’1′ height=’1′ style=”margin-top:0 !important;margin-bottom:0 !important;margin-right:0 !important;margin-left:0 !important;padding-top:0 !important;padding-bottom:0 !important;padding-right:0 !important;padding-left:0 !important;border-width:0 !important;height:1px !important;width:1px !important;-ms-interpolation-mode:bicubic;” />