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Today, we’re talking about Dick’s big acquisition, Walmart’s price hikes, and Coinbase’s brutal day. But first...

In the May 16, 2024 edition of The Water Coolest… we talked about Netflix’s foray into (real) live sports. It decided to play just the tip with the NFL, announcing it would stream a handful of Christmas Day games for the next 3 seasons. Friendly reminder: earlier in 2024, it inked a deal with the WWE to stream RAW.

Netflix’s execution of the X-Mas Day ‘24 games was *chef’s kiss*… which is more than could be said for the glitchy Jake Paul v. Mike Tyson live-stream earlier in the year. Oh, and the games shattered all sorts of streaming viewership records. That said, NFLX hasn’t made any major live sports streaming rights moves since…

Enjoy the next 4 minutes and 28 seconds of blue-chip news and commentary.

Keep on snapping necks and cashing checks,

– tyler

The back-to-school shopping game done changed…

Dick’s Sporting Goods $DKS ( ▼ 0.09% ) made it official, buying Foot Locker $FL ( ▼ 0.33% ) for $2.4B, which seems like a lot for the mall store between the boarded up GameStop and the Auntie Anne’s that was closed down by the health department.

According to Dick’s it’ll continue to operate Foot Locker as a separate entity and maintain most of its 2.4k stores… for now.

Overreact much?

Foot Locker put itself up for sale almost as soon as Donny Politics started making it rain tariffs. The home of the greatest company uniforms in the game (sorry, Hooters) has a big problem: pretty much all of its merch is made in China or Vietnam. Spoiler: that means it’s got a duty problem.

Of course, it wasn’t just tariffs…

Foot Locker has been on the struggle bus for a minute. Shares were down 40% year to date (before yesterday’s pop)… and more than 80% from their ATH in 2021.

Perhaps you recall that most Foot Lockers are located in the decaying former epicenters of American consumerism: shopping malls. Falling traffic has taken its toll.

As has its rocky relationship with the most popular shoemaker in the game: Nike. Back in 2017, the Swoosh started winding down its wholesale relationships with retailers like Foot Locker in hopes of making a DTC push.

The decision put a hurting on Foot Locker, whose stores consisted of nearly 75% Nike merch at one point. The Shoe Dogs have pumped the brakes on their ambitions to go it alone (mostly because it blew up spectacularly), but not before the damage was done to Foot Locker.

Meanwhile, at Dick’s…

Despite investors’ reaction (see: stock plummeting), the sporting goods retailer might be onto something. For Dick’s the deal will unlock a new, younger demo. And more importantly, it will nearly corner the market on Nike shoes. You see, the company that gave us the GOATed sports commercial only works with 3 retailers. Two of them are Dick’s and Foot Locker.

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+ “It ain’t much, but it’s honest work.” - the Walton family raising prices on Americans while swimming in their Scrooge McDuck pools filled with money (and the tears of poor people)

Sure, the price of eggs dropped dramatically last month, and tariffs are frozen. But Walmart $WMT ( ▲ 0.49% ) smells an opportunity. During its earnings call, it said it plans to hike prices this summer, whether you like it or not. And despite the risk of backlash from the White House, Wally World cited tariffs.

Walmart’s most recent quarter was good (because would you expect anything less?). It beat on the top and bottom lines. And the world’s greatest arena for people watching confirmed its full year guidance, but said it was a bit more unsure about the near-term.

+ Life comes at you fast. Just a day after getting added to the S&P 500 (think: good), Coinbase $COIN ( ▲ 1.53% ) had to turn around and tell investors, “listen, uh, we f*cked up.”

Early in the day, news broke that some cybercriminals bribed overseas support staff to gain access to sensitive customer information (*the onshoring bois have entered the chat*). The thieves demanded ransom, but it appears COIN does not negotiate with terrorists. Instead of paying the $20M ransom requested, Coinbase will take matters into its own hands… which will reportedly cost the exchange as much as $400M.

Then, Thursday afternoon, it came to light that the SEC has been investigating whether the crypto giant has misstated its verified user #’s. To be fair, Uncle Sam started poking around during the prior administration, which liked crypto about as much as Martin Shkreli likes fair and honest pricing.

+ Can we get a wellness check on Dr. Michael Burry?

+ Pimpin’ ain’t easy, and neither is building an LLM. Meta $META ( ▼ 2.33% ) is delaying the rollout of its latest AI model… again. Zuck’s most powerful version to date reportedly won’t drop til Fall, at the earliest. “Behemoth” was originally supposed to be released in April, but Meta has concerns about its capabilities (spoiler: it’s probably racist).

+ Listen, we get it, Jerome, we’re not getting lower rates. In his remarks at a policy conference, the Chairman of the Federal Reserve reminded us that we “may be entering a period of more frequent, and potentially more persistent, supply shocks.” Read: it makes his job easier to just keep rates higher, you guys…

+ US stocks “notched a fourth-straight session of gains on Thursday, as advances in so-called value stocks offset a lackluster day for technology, retail and energy shares.” (Bloomberg)

+ The 10-year yield “moved lower on Thursday as investors digested a cooler-than-expected inflation reading.” (CNBC)

+ Oil “prices settled lower on Thursday on expectations for a U.S.-Iran nuclear deal that could result in sanctions being eased and more barrels released onto the global market.” (Reuters)

⏪ Yesterday…

+ Walmart, Alibaba, and Deere reported in the AM

+ Applied Materials, CAVA, Take-Two, Quantum Computing, KULR, Bit Digital, and Doximity reported after hours

+ The European Central Bank released the minutes from its last monetary policy meeting

+ The April Retail Sales report dropped

+ J-Poww gave a speech at the Thomas Laubach Research Conference

⏩ Today we’re keeping an eye on…

+ Not a ton going on…

Yesterday, I asked, “What's the best HBO show ever?”

32.3% of you picked “Sopranos.”

Here’s what some of you guys had to say…

Here’s today’s question…

It’s college graduation season. Got me thinking…

Oh, and one more thing…

Does this look like the face of a guy you should take financial advice from?

No, it’s the face of an individual who is financially irresponsible/dumb enough to be talked into spending money on a family photo shoot that he could have just done with his iPhone. So, act accordingly...

This is not financial advice. Nothing in this newsletter is an investment recommendation. All content is created for entertainment, educational, or informational purposes only. Do your own research, or do yourself a favor and hire a professional.

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