☕️ So cultured

Is Rivian the Tesla challenger we've been waiting for?
November 10, 2021 View Online | Sign Up

Morning Brew

Fidelity Investments

Good morning. As with most other gigs, there appears to be a shortage of mall Santas this year. If you feel good about reds and have familiarity with the major plot points in Bluey, you should consider applying: Santas in big cities rake in several hundred bucks per hour, and earnings are up 12% this year, per the WSJ. 

Neal Freyman, Max Knoblauch, Jamie Wilde

MARKETS

Nasdaq

15,886.54

S&P

4,685.25

Dow

36,319.98

10-Year

1.439%

Bitcoin

$67,537.59

PayPal

$205.42

*Stock data as of market close, cryptocurrency data as of 5:00pm ET. Here's what these numbers mean.

  • Markets: It was fun while it lasted, but the S&P snapped its 8-day winning streak yesterday. The biggest anchor in the index was PayPal, which dropped the most since March 2020 after forecasting lower revenues for next year.
  • Covid: Pfizer wants all US adults to be able to receive its booster shots, so yesterday it asked the FDA to authorize its third dose for everyone 18 and over. The booster is currently only cleared for certain populations, such as those who are 65+.

AUTO

The Valedictorian of the EV Class Graduates

Rivian pickup truck

Rivian

While Elon Musk contemplates selling his Tesla shares, another electric vehicle company is asking you to please buy theirs.

Rivian is going public today at a monster $77+ billion valuation, with the goal of raising nearly $10 billion. The startup is slated to be the seventh-largest IPO on a US stock exchange in history, and the biggest public offering for a US company since Facebook in 2012.

What does Rivian make? Well, not much yet. The automaker just started to deliver vehicles from its Normal, Illinois, plant a few months ago. But its first products will include…

  • A pickup truck, the R1T
  • An SUV, the R1S
  • A commercial delivery van

The origin story: Rivian founder RJ Scaringe, who holds a doctorate from MIT, created the company in 2009 with the goal of making an electric sports car. But, concerned he couldn't beat Elon in that arena, Scaringe pivoted to creating an auto brand for the Chaco-wearing adventure crowd.

Big backers

While Rivian was once an under-the-radar prospect, it's gained support from some heavy hitters in the past couple of years. Amazon owns 22% of the company, and in 2019 it put Rivian on the map by announcing an order of 100,000 vans for its delivery routes.

  • Jeff Bezos is such a Rivian fanboy that on the way to space this summer, he rode up to the launch site in a Rivian SUV.
  • Bezos has called Scaringe "one of the greatest entrepreneurs I've ever met."

Another legacy company that's bet on Rivian is Ford. As it looked for ways to challenge Tesla in the EV space, Ford beat out GM to take a 12% stake in Rivian. It stands to earn $7 billion when Rivian goes public.

Looking ahead…while Rivian is a consensus No. 1 draft pick, it's going to have to execute at the highest level if it wants to end up like LeBron James instead of Greg Oden. It generated at most $1 million in revenue last quarter, while losing nearly $1 billion in the first six months of the year.—NF

        

INDUSTRIAL

Is It Something the Aviation Division Said?

A screenshot from 'I Think You Should Leave' of a man winking and pointing out of frame. The caption reads

Netflix

General Electric, the Corporate America icon founded by Thomas Edison and once the world's most valuable firm, is splitting up.

GE will separate into three public companies that focus on health care, energy, and aviation—each with their own board of directors.

  • The health care business will separate in early 2023.
  • The renewable energy, fossil fuel power, and digital divisions will combine and spin off in 2024.
  • The final segment will be GE Aviation—a major supplier for the military.

Call it an era: Founded in 1892, GE was an original member of the Dow Jones Industrial Average. Being a conglomerate and all, it became known for...everything, from plastics to petroleum to Telemundo.

Turns out making soap, soap bottles, and soap operas all at the same time doesn't work. GE has been slowly imploding since the financial crisis of 2008, and lost 74% of its value from 2016–2018. The company was booted from the Dow in 2018.

Zoom out: Analysts believe that GE's breakup is as much an indictment of the outdated conglomerate model as it is of the company itself. As for the microwave division? It's been gone for a while, having been sold off with the rest of GE Appliances in 2016.—MK

        

VACCINES

Moderna and the Government Go Shot for Shot

Like a couple fighting at their own housewarming, Moderna and the National Institutes of Health are locked in a year-long, closed-door conflict over vaccine patent rights, according to an NYT report.

  • The NIH claimed that three government scientists helped design the sequence that enables the vaccine to produce an immune response.
  • Moderna countered in a patent filing that it had reached the good-faith determination that the three NIH scientists were not coinventors.

Scientists familiar with the dispute see it as Moderna committing a betrayal. If government scientists are named as coinventors, then the US would have a larger say in who can manufacture the vaccine and license the technology, which would bring money into the Treasury.

Zoom out: Moderna's vaccine grew out of a 4-year joint venture with the NIH, and the company received $10 billion in taxpayer funding to develop the shot. Analysts predict Moderna vaccine sales will reach $35 billion through the end of 2022.

Senior officials say the Biden administration has grown frustrated with Moderna because it hasn't made its vaccine more available to low-income countries, nor has it sold the US cheap doses that could then be donated to those countries (as Pfizer has agreed to do).—MK

        

TOGETHER WITH FIDELITY INVESTMENTS

Are Options Optional?

Fidelity Investments

Whether you're an investing newbie or the person Warren Buffett goes to when he needs folksy wisdom, you've probably heard a thing or two about the financial instruments known as options. 

They're pretty nifty, and have the ability to buoy your portfolio big time if you know how to use them right. But...you definitely need to know how to use them right. 

That's what the latest episode of Fresh Invest, our investing podcast with Fidelity, drilled down on. With Fidelity professional Greg Stevens, Morning Brew Cofounder and Executive Chairman Alex Lieberman first reviews what options are and how they work, then lays out how you can incorporate them in your portfolio. 

Because this season of Fresh Invest is all about you—or more specifically, how the financial concepts we focus on so much in this newsletter can potentially help you grow your wealth. 

Check out the latest episode on how to use options right here.

GRAB BAG

Key Performance Indicators

View of a beach

Getty Images

Stat: Why vacation when you can summer? 20% of Airbnb bookings between July and September were for a month or longer, CEO Brian Chesky said. Stays of 28 days or more are now the company's fastest-growing category, and it's rolling out new features, like verified internet speeds, to court more folks who want to turn their Airbnb house into a home.

Quote: "I've had a lot of time to think, and there have been multiple lessons and multiple regrets."

Former WeWork CEO Adam Neumann gave his first interview since being booted from the company at the DealBook conference yesterday.

Read: An interview with Sapiens author Yuval Noah Harari. (New York Times)

        

ART

Van Going Going Gone

A bidding paddle and a computer in a frame

Francis Scialabba

When it comes to collectibles, it's not just holo Charizard cards selling for record sums this year. Three of the world's most prestigious art houses—Sotheby's, Christie's, and Phillips—plan to sell $1.6+ billion worth of art in just the next two weeks, per the WSJ. At least 15 pieces are expected to rake in $20+ million each, with some going for 15x their asking price.

Why's everyone so cultured all of a sudden?

The pandemic was rough economically for many, but not so much for the top 1%. Over 5.2 million people globally became millionaires last year, and they're looking to store their cash tax-free in O'Keeffe's flowers and Rothko's rhombuses.

Plus, there's no need to pick up a physical paddle to buy art anymore. When shopping online, algorithms suggest art to digital bidders, which they can view in online rooms or in their own homes via augmented reality tech. Not to mention, a growing percentage of art doesn't necessarily need any wall space: About 5.5% of Sotheby's and Christie's contemporary art sales this year were non-fungible tokens, including Beeple's $69 million "The First 5,000 Days."

+ If you're ready feeling très artistique, check out Mad Dog Jones's "Replicator" and Stickymonger's "Back OFF."—JW

        

WHAT ELSE IS BREWING

  • Tesla shares suffered their worst 2-day slide in 14 months after Elon Musk polled Twitter users about whether he should sell a chunk of his stock.
  • Meta said it would restrict advertisers from targeting users based on sensitive categories, including religion, race, and politics.
  • Panera Bread, which owns Caribou Coffee and Einstein Bros. Bagels, is planning to go public in what's expected to be the most mediocre IPO in history.
  • Coinbase stock fell more than 10% after hours when it revealed a summer slowdown in crypto trading.

BREW'S BETS

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Take us back: These vintage train posters can make one weepy. And while we're on the subject, here's more good train content.

Morbid, but interesting: Here's a list of inventors who were killed by their own inventions. We've heard of the Colorado horse statue one, but not many of the others.

*This is sponsored advertising content

FROM THE CREW

Shop the Biz Jargon Collection

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The Biz Jargon collection in our new online store literally speaks for itself. Your favorite business and finance sayings are now available on our comfy t-shirts.

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GAMES

The Puzzle Section

Word Search: How well do you know your music videos? Find out when playing today's Word Search.

Address book

We'll give you some famous addresses; can you identify which TV/movie character(s) lived there?

  1. 4 Privet Drive, Little Whinging, Surrey
  2. 301 Cobblestone Way, Bedrock
  3. 0001 Cemetery Lane
  4. 129 West 81st Street, Apartment 5A, New York
  5. 1882 Girard Street, San Francisco, CA
  6. 62 West Wallaby Street, Wigan, Lancashire

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ANSWER

  1. The Dursleys in Harry Potter
  2. The Flintstones
  3. The Addams Family
  4. Jerry Seinfeld in Seinfeld
  5. The Tanner family in Full House
  6. Wallace and Gromit

HOW WAS TODAY'S NEWSLETTER?

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✢ A Note From Fidelity Investments

Investing involves risk, including risk of loss.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

         

Written by Neal Freyman, Max Knoblauch, and Jamie Wilde

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