☕️ Convicted

The Elizabeth Holmes trial reaches its end...
January 04, 2022 View Online | Sign Up | Shop

Morning Brew


Good morning. Here are two conversation starters that will guarantee you'll get into a fistfight with your new coworkers today.

  1. What city's residents can absolutely not drive in the snow?
  2. What city's entire personality is defined by driving in dangerous weather conditions?

Neal Freyman, Matty Merritt, Max Knoblauch














*Stock data as of market close, cryptocurrency data as of 4:00pm ET. Here's what these numbers mean.

  • Markets: New year, same old bull market, with the S&P and Dow notching records on the first trading day of 2022. Investors sent airline and travel stocks higher—apparently they're not too concerned about the mass cancellations that have plagued the industry recently.
  • Covid: The FDA authorized Pfizer booster shots for kids ages 12 to 15 in order to provide more protection against Delta and Omicron. The CDC will make a final ruling later this week before they're made available.


For Holmes, the Jig Is Up

Elizabeth Holmes speaks on stage during the closing session of the Clinton Global Initiative 2015 on September 29, 2015 JP Yim/Getty Images

It took more than 50 hours of deliberations over seven days, but yesterday a jury found Theranos founder Elizabeth Holmes guilty on four charges of criminal fraud. Basically, they concluded that Holmes intentionally lied to investors to raise gobs of money for her company, a blood testing startup that promised to revolutionize health care.

Spoiler alert: It didn't. And according to the jury, Holmes knew that it wouldn't work out even as she touted the company's tech capabilities to raise nearly $1 billion from the likes of Rupert Murdoch, the DeVos family, and the Waltons of Walmart fame.

The details: Holmes was convicted of three counts of wire fraud and one count of conspiracy to commit wire fraud. She was found not guilty on four other charges and the jury couldn't agree on a verdict for three charges. So Holmes went 4/11.

How long will Holmes be behind bars? Each of those guilty counts could carry a sentence of 20 years in prison, but legal experts say she'll probably serve less time than that, given typical sentences in white-collar fraud cases like hers.

How we got here

When she was 19, Holmes dropped out of Stanford to build a device that could perform hundreds of diagnostic tests more cheaply and more accurately than anything on the market. If the Brew were around back then, she probably would have been a regular—after all, she was labeled the youngest female self-made billionaire by Forbes and drew comparisons to Steve Jobs.

But things unraveled when WSJ investigations in 2015 and 2016 exposed Theranos's vaunted technology for not actually working. Then came a slew of lawsuits and an indictment, and in 2018 the company dissolved in a thundercloud of disgrace.

Big picture: To many, Holmes's story reflects the excesses of a venture capital industry that will plug any charismatic founder with a geyser of cash despite their ideas being untested. But Silicon Valley insiders told Bloomberg that, despite Holmes's conviction, that faucet won't be turned off anytime soon. The lure of exponential returns is that powerful.



Biden Takes on Big Meat to Curb Inflation

Beef cow Francis Scialabba

Your holiday brisket cost a lot more this year, and President Biden thinks market concentration in the meat industry is a big reason why.

The White House announced yesterday that it's sending $1 billion to independent meat and poultry producers in order to promote competition in the heavily concentrated industry. How concentrated?

  • It said that four large meatpacking companies control 85% of the beef market. And this dominance allows these firms to drive up prices more than a market with many different players would allow.
  • Prices for meat rose 16% annually in November.

It's part of a broader strategy. While Biden is currently picking on meat producers, his administration has taken aim at several other industries where, the White House argues, a few big players have exacerbated inflation. In November, for instance, he asked the FTC to investigate oil and gas companies for "anti-consumer" behavior that's driven up gas prices.

The counterargument: Industry groups and some economists say that blaming a lack of competition for recent inflation is like blaming apple juice for your hangover. After the White House alleged that profits for large meatpackers rose 300% during the pandemic, the North American Meat Institute said this analysis "conveniently" omits factors sending prices higher such as worker shortages and supply chain bottlenecks.

Bottom line: Whether they curb inflation or not, crackdowns on anti-competitive behavior have become a central feature of Biden's economic strategy. Over the summer, even before price growth got out of hand, he issued an executive order with 72 directives to step up antitrust enforcement and promote competition.—NF



Back to School Fumbles Its Way Into the New Year

If you thought yesterday was a calm first day back at work, you probably don't have kids. Public schools in Cleveland, Milwaukee, Atlanta, Newark, and some districts in Michigan have all delayed their starts or switched to remote learning until at least January 10 because of skyrocketing Covid cases among students and staff.

And for schools that stayed open, safety precautions across districts are about as standard as women's jeans sizing.

  • Staff at LA County public and private schools will be required to wear medical grade masks indoors and in crowded spaces outdoors.
  • On the other hand, Johnson County—the most populous county in Kansas—is considering ending its mask mandate for elementary schools as early as this Thursday.

Big picture: Local leaders who've vowed to keep schools open are being met with increased resistance from teachers groups.

In New York City, where Mayor Eric Adams has insisted that schools are the safest place for students, representatives of the teachers' union aren't so sure that simply sending 1.5 million rapid tests to schools is enough. And in Chicago, teachers have threatened to stop working in-person on Wednesday after a botched at-home testing plan led to a backlog of unprocessed student tests.—MM



Money Trees Don't Grow If You Keep Chopping Them Down


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Key Performance Indicators

Stat: For a brief moment yesterday, Apple became the first public company in history to hit a $3 trillion market cap. It took 42 years to be worth $1 trillion in 2018, hit $2 trillion two years later, then notched $3 trillion about 17 months after that. Apple's now worth more than Walmart, Disney, Netflix, Nike, Exxon Mobil, Coca-Cola, Comcast, Morgan Stanley, McDonald's, AT&T, Goldman Sachs, Boeing, IBM, and Ford combined, per the NYT.

Quote: "On the last day of 2021, we meet in Xinjiang. In 2022, let us together launch Xinjiang on its electric journey!"

Tesla announced on Dec. 31 that it opened a new showroom in Xinjiang, the Chinese province that's the epicenter of human rights abuses and genocide carried out by the Chinese government against mostly Muslim minorities.

Read: An interview with Ryan Petersen, the CEO of Flexport, that will give you a lot more insight into the supply chain crisis. (Noahpinion)



Good Night, Sweet Prince

Good Night, Sweet Prince Justin Sullivan/Getty Images

After a decadelong battle with irrelevance, the BlackBerry is no more. The company ended access to basic smartphone functionality for its classic devices today.

What that means: If you still have a working BlackBerry running on BlackBerry 10 software or 7.1 OS and earlier, it's time to hang up the phone belt holster for good: As of today, you'll no longer be able to reliably use that device for SMS, phone calls, data usage, or even calling 911. It's decor now.

  • In most cases, newer Android-based BlackBerry phones will continue to function normally. Or, whatever normal means for them.

End of an era: Once the crème de la crème of smartphone tech, the BlackBerry had 80 million active users in 2012—with power button-smashers like President Obama, Kim Kardashian, and your uncle who drove an Audi A4.

Still, the company soldiers on. BlackBerry's pivoted to focus on cybersecurity and provide operating systems for cars, as the auto industry moves toward autonomy. Heck, it even moonlit as a meme stock last year.—MK



  • AT&T and Verizon said they'd delay launching 5G service near airports for two weeks to avoid potential disruptions to aviation.
  • David Bowie's estate sold his publishing catalog to Warner Chappell Music for up to $250 million, per Variety. It's the latest transaction in a frenzy of music rights sales.
  • The DC region is digging out from its biggest snowstorm in three years, which left more than 500,000 customers without power and disrupted flights.
  • Mercedes unveiled an electric concept car with a range of 620 miles on a single charge. If that proves to be the case on road tests, it would be the highest-range EV by a longshot.



BEAT security threats in 2022. Cybersecurity should be the first thing you think about in 2022, especially if you've got big plans for growth (who doesn't?). With lightning-fast, chat-based support and proactive security standardization, Electric are the IT geniuses who can help keep your biz secure. Sound good? This'll sound even better: If you're an IT decision-maker at a company of 15-500 and take a meeting with Electric, you'll get a FREE pair of Beats headphones. Set up your meeting here.


Because you've been wondering: Here are all the emojis to scale.

Some fun ideas in here: 100 ways to slightly improve your life without really trying.

What is a credit score? This fun video will help you wrap your head around it.


The Puzzle Section

Brew Mini: 2022 will be the year you set multiple PRs on the Mini crossword puzzle. Begin your quest today.

Composer or Pasta?

Today is National Spaghetti Day. To celebrate, let's dust off one of our favorite quizzes: Italian pasta or Italian composer?

  1. Capellini
  2. Vivaldi
  3. Bellini
  4. Scarlatti
  5. Testaroli


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  1. Capellini is a kind of pasta.
  2. Antonio Vivaldi was a composer.
  3. Vincenzo Bellini was a composer.
  4. Domenico Scarlatti was a composer.
  5. Testaroli is a kind of pasta.

✢ A Note From Wealthfront

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Written by Neal Freyman, Matty Merritt, and Max Knoblauch

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