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| 1 | | In a stunning turn of events, the PGA Tour announced that it would be joining forces with LIV Golf and DP World Golf to unify as a large tour. LIV Golf, which is funded by Saudi Arabia's Public Investment Fund, began in 2022 and signed multiple PGA pros to lucrative deals, causing a rift in the world of professional golf. More: - The surprising announcement came this morning when the PGA Tour announced the merger in a statement to its players. The negotiations were so secretive that no players have said they knew about them.
- It has been a tumultuous year for the two tours, as LIV Golf began poaching PGA Tour players by offering substantial amounts of money in return for them not playing PGA Tour events and joining LIV. Numerous high-profile golfers, including Phil Mickelson, Brooks Koepka, and Dustin Johnson, jumped to LIV Golf. The biggest contention point between players on the PGA Tour and LIV Golf players has been that the league was funded by Saudi-backed money.
- The new tour will be funded by that same Saudi Public Investment Fund, however. It also retains the right of first refusal for any additional investment in the new entity, giving it much power in the direction and scope of the large tour.
- This will end litigation between the two tours, but it is not yet known how LIV Golf members can reapply to join the PGA Tour.
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What the numbers say: The push for virtual reality will continue to rise in the upcoming years. Projections for the next five years for AR/VR headsets sold see a steady rise in product demand. By 2027, headsets are expected to hit 30 million units sold, according to IDC. Relevance: Apple announced its Apple Vision Pro virtual reality headset at WWDC 23 yesterday. Unlike its predecessors in the AR/VR reality headset market, Apple priced its headset based on all it can do instead of as a loss leader to get more units sold. Meta, Samsung, Bytedance, and more have priced headsets at a lower price point to try to drive demand. But Apple is pricing its offering at just shy of $3,500 when it becomes available in 2024. More companies are said to be releasing new headsets this year, including Meta, HTC, and PlayStation. More data: Looking at data from previous years, the AR/VR headset sales market in the U.S. has seen some rise but a bit of a tapered-off increase in 2022. Last year, 19.14 million units were sold, but in 2021, the push for them had doubled, likely coming out of the COVID-19 pandemic, as the sales jumped from 7.86 million in 2020 to 14.25 million. Back in 2017, only 3.8 million units were sold. | | | |
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| 3 | | Just a day after accusing Binance of mishandling funds, the Securities and Exchange Commission sued Coinbase, the largest crypto trading platform in the U.S. The SEC claims that Coinbase broke laws by not registering as a broker. More: - In its filing, the SEC shows the ways that Coinbase's executives knew how to sell digital assets, despite failing to follow the laws.
- The SEC claims that while Coinbase has made billions, it has deprived investors of significant protections.
- Coinbase argues that the business model received approval from the SEC when it was approved for its initial public offering in 2021.
- "You simply can't ignore the rules because you don't like them or because you'd prefer different ones. The consequences for the investing public are far too great," Gurbir S. Grewal, the director of the SEC's enforcement division, said in a statement.
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| 4 | | Bud Light continues to struggle in the aftermath of the Dylan Mulvaney controversy, as Anheuser-Busch InBev stock is down 17% since its May 4 earnings announcement. There have been slight improvements in recent weeks to make forecasters expect the company is pulling out of its slide. More: - In the week ending May 27, Anheuser-Busch InBev said Bud Light sales dropped 23.9% YoY, which was actually a smaller decline than the week prior, a 25.7% decline from the previous year.
- Volumes are also improved, as they were down only 27.8% last week compared to 29.5% the week prior.
- This is also affecting the other drinks in the company's portfolio, as Budweiser sales were down 8.5% YoY for the week of May 27. Michelob Ultra sales dropped 0.1% in that time frame, and Busch Light declined 3.0%. But these were all better than the week before for all brands.
- If these weaker trends continue, it "begs the question of whether Anheuser-Busch InBev and/or its distributors will have to make structural changes to reduce their cost basis if trends don't improve over the next few months," said Evercore's Robert Ottenstein.
Zoom Out: - During a March Madness campaign, Mulvaney, a transgender influencer and TikTok star, made a post on Instagram endorsing the beer. Singer Kid Rock posted a video in April condemning Bud Light for collaborating with a transgender personality, and a widespread boycott across the U.S. ensued.
- During the earnings call, Anheuser-Busch InBev CEO Michael Dimitrios Doukeris downplayed the controversy, which angered LGBTQ allies, causing multiple sides to be angry at the company.
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| 5 | | Due to increased tension between Washington and Beijing, venture capital firm Sequoia Capital is splitting its China business into a separate entity. It announced Tuesday that it would run its Chinese business venture completely separately from its U.S. ventures. More: - Sequoia Capital announced that the Chinese arm would go under a new name, HongShan, which means redwood.
- It will also separate its Indian and Southeast Asian ventures into a third entity, adding that all these changes will take place in the next nine months.
- Neil Shen, founder of Sequoia Capital, said conversations about splitting the entities "have been evolving over the last two to three years" and noted that the entities have "much less in common now."
- The China and India arms will run separately but share in some profits with the U.S. arm.
Zoom Out: - The Silicon Valley-based firm was an early investor in both TikTok and Alibaba.
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| 6 | | The World Bank said that the global economy is in a "precarious state" and forecasted slow growth this year and going forward. Rising interest rates are expected to slow consumer spending and business investments, leading to threats to the stability of financial systems. More: - The World Bank released its latest Global Economic Prospects report and projected that global growth would slow to 2.1% this year, down from 3.1% in 2022.
- 2024's growth rate is set at 2.4% as of now, which is lower than it was projected to be in January this year.
- 65% of countries are expected to experience slower growth this year than last. Low-income countries relying on borrowed money are adding to the issues across the globe.
- 14 of 28 low-income countries are in debt distress or at a high risk of debt distress, according to the World Bank.
- Rising borrowing costs in rich countries, like the U.S., added to the stress on the global economy.
- The COVID-19 pandemic and Russia's war with Ukraine are seen as complementing factors to the interest rates as to why growth is slowing.
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Editor | | Christopher Hachey is a freelance writer and editor based in the New York City area. He has spent most of the past 15 years in newsrooms covering all kinds of topics like sports, tech, business, finance, and commerce. He's now returning to his broadcast journalism roots by diving into podcasting news. Reach out to him at chris@inside.com | | This newsletter was edited by Aaron Crutchfield | |
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