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James Watt, the CEO of the UK’s largest craft brewer BrewDog, pledged to give £100 million from his 24% personal stake in the company to its 750 salaried staff, meaning each is set to receive £120,000 ($150,000).
The brewer also plans to give away half its profits to the 2,250 staff at its 111 bars who are paid by the hour. They’re calling the program Howard Schultz’s worst nightmare. | | | • | | BP shatters profit estimates; now to make it all look like business as usual. | | • | | Bain Capital is making a big investment in cold warehouses days after Amazon sends chill through the sector. | | • | | Biogen looks to pivot following disastrous Alzheimer’s drug rollout. | | | | |  | Energy | BP Nets $6.2 Billion Profit Amid Debate About Windfall Taxes | | Despite a massive $24 billion write-down related its Russian operations, British oil giant BP and its industry peers are minting money like it's 2009.
The British oil giant made it rain this Tuesday with news of a reported $6.2 billion underlying profit in the first quarter, up from $2.6 billion in the same period last year — crushing analysts’ expectations of $4.5 billion. The company now faces a delicate balancing act: returning that excess value to investors while assuring governments it isn’t profiteering amid a struggling economy. | Don’t Mean to Be Crude | | Acknowledging the obvious, BP attributed its standout earnings to “exceptional oil and gas trading.” Energy prices, including those for crude oil, have spent much of the year flirting with their highest values since the 2008 recession. At the same time, this is a delicate moment to be making so much money in the UK’s energy sector.
British households are grappling with soaring energy bills after the country’s energy price cap went up 54% on April 1. Seriously — 54%. Researchers at the Resolution Foundation warned that as many as five million English households could be living in fuel poverty, meaning they spend over 10% of their income on fuel. Meanwhile, governments in Europe have debated whether energy companies should be taxed for so-called “windfall profits” or large sums made on commodity price swings that, as some would have it, hurt working people.
With all this in play, BP was especially careful to make shareholders and watchful public officials feel like they were being listened to. Let’s drill down into the details: | • | | Unlike Italy, which plans to raise a tax on energy companies' windfall profits from 10% to 25%, the UK government has not implemented a “windfall tax.” Chancellor of the Exchequer Rishi Sunak said that could change if UK energy companies don't put enough of their profits back into the country. BP promised to invest £18 billion into UK green energy and fossil fuel development by 2030; this may or may not be enough to keep Sunak and his Cabinet peers at bay. | | • | | To please loyal shareholders, who, before the energy boom, slogged through years of subpar results, BP is accelerating quarterly share buybacks to $2.5 billion worth by the end of the second quarter, up from $1.6 billion in Q1. BP shares have already risen 14% this year. | | | | From Russia With Shrug: BP’s $24 billion write-down, related to its retreat from Russia, was by far the largest loss from Russian operations by a major oil company. Rival Shell's write-down was a comparatively modest $5 billion, Total’s $4 billion, and Exxon’s $3.5 billion. Still, BP brushed it off and said the loss won’t get in the way of getting cash back to its investors. | | | | | | Storage | Bain Plays it Cool With $500 Million Cold Storage Partnership |  | | The start of a relationship often involves awkward attempts to break the ice. In this meet cute, the pair wants everything to remain frozen.
On Tuesday, private equity firm Bain Capital and real estate firm Barber Partners announced they will spend $500 million to build 10 to 15 refrigerated US-based warehouses in the next five years. The market for chilled space had been strong as of late, but then, last week, Amazon broadcast a worrying signal. | When is a Warehouse a Warehome? | | Demand for industrial space has been through the roof the last two years because of the acceleration of E-commerce: warehouses, last-mile facilities, and fulfillment centers are all central to the delivery-services industry, which got a tremendous leg up during the pandemic. According to Cushman & Wakefield, the North American industrial market reached a record 507 million in occupied square feet last year, with vacancy rates of just 3.8%.
That boom has also included cold storage, essential to grocery-delivery services like Amazon Fresh, FreshDirect, and Misfits Market. In 2019, only 5% of grocery orders were made online, according to Bain & Co., but that doubled to 10% in two short years. In other words, the Bain Capital and Barber partnership coincides with a piping hot moment in the business of cooling: | • | | The cold-storage construction market will grow to $18.6 billion by 2027, from $7 billion in 2019, according to consultancy Emergen Research. | | • | | Last year, Cerberus Capital backed a multibillion-dollar cold-storage portfolio and the world’s largest cold storage company, Lineage, raised $1.9 billion from venture capital firms. REIT Americold broke ground on five projects worth a total of $461 million. | | | | There is, however, one Bezos-bicep-sized caveat hanging over all the rosy projections: Amazon’s prospects. The world’s largest E-commerce company, renter of untold millions of square feet of warehouse space, reported its first quarterly loss in seven years last week, then warned of a slowdown on the back of a 3% year-over-year drop in its online stores segment. On Tuesday, Amazon said it will close six Whole Foods market locations, a chilling retrenchment in its massive grocery business.
Feeling the Frostbite: Publicly traded UK storage firms Segro and Tritax Big Box both fell 4% Tuesday and New York-listed Prologis, the world’s biggest warehouse owner, is down over 10% since Amazon reported. | | | | | | SPONSORED BY YIELDSTREET | Want To Modernize Your Portfolio? Here’s How: | Let’s face it, folks – when it comes to your portfolio, the 60/40 strategy just doesn’t cut it anymore. Bond yields are near all-time lows, equity valuations are historically high (AKA not a great value for you), and forward-looking return estimates for a 60/40 portfolio are as low as 1.4%. So what’s the trick to modernizing your portfolio and upping your returns? Private market investments. Yieldstreet gives you exclusive access to curated alternative investments opportunities – think art, real estate, crypto, and VC – that can help take your portfolio from “so-so” to “holy smokes, let’s go!!!!”. With target returns as high as 7-18% and time frames as short as 3 months to a year (not to mention early liquidation options), Yieldstreet is the go-to platform for people looking to bring their investments into the modern age. The sign up is simple, the options are nearly endless, and the track record speaks for itself. Create your Yieldstreet account right here. | | | | | | Pharmaceuticals | Biogen CEO Announces Resignation Over Alzheimer’s Drug Flop | | Sometimes, when one door closes, another one opens. Other times, when one door closes, so too, do about a billion more.
For pharmaceutical giant Biogen, facing the beyond-disappointing debut of its much-ballyhooed Alzheimer’s drug Aduhelm, the latter is precisely the case. On Tuesday, CEO Michel Vounatsos announced his resignation, as the company attempts to pivot from what many expected to be its next blockbuster treatment. | Bad Luck at the Helm | | Aduhelm, which is supposed to slow the cognitive decline caused by Alzheimer’s, gained FDA approval last June. It's all been downhill since then. Experts questioned the conclusiveness of the clinical trials even as the drug was being rolled out. Not surprisingly, in December, the European Medicines Agency rejected Aduhelm altogether, saying it required further trials to analyze possibly harmful side effects. The drug’s entire first quarter on the domestic market brought in just $300,000 — about $14 million shy of expectations. To date, it’s brought in $5.8 million.
In a move more animated by a bleeding bottom line than by a bleeding heart, Biogen halved the price of the treatment to $28,200 a year. Still, in April, Medicare announced it would only cover the costs for patients receiving Aduhelm as part of clinical trials. Vounatsos says his planned departure “will be good for everyone involved” and is just one step in the company’s pivot away from a product analysts once thought could generate $10 billion a year in revenue: | • | | Biogen said it is substantially cutting the sales infrastructure it previously built for Aduhelm ahead of its launch, while also booking $275 million in inventory write-downs associated with the drug. | | • | | In total, Biogen says the cuts could save the company $1 billion annually. It will maintain only the minimal support infrastructure needed to provide the drug at no cost to patients currently taking it. | | | | A Second Chance: Biogen needs just such a door right about now. Its second Alzheimer’s drug, Lecanemab, is on track to be submitted for full approval next year. Perhaps the second time is the charm. | | | | | | Extra Upside | • | | Check your bill: AT&T is hiking up its mobile plan prices in a bid to extract more cash from customers’ pockets. | | • | | Disneyland is holding an auction of incredible old park memorabilia. | | | | | | | | |  | Just For Fun | | | | | Written by Sean Craig and Vince DiMiceli | | No longer want to receive these emails? Unsubscribe here. Copyright © 2022 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, NY 10065 | | | | |
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