Daily Brew // Morning Brew // Update

August 10, 2024

PRESENTED BY

Good morning. The Olympics wraps up on Sunday, so make sure you get your fill of niche sports before the NFL takes over in a few weeks.

The US has a commanding lead in the total medal count, but we’re all tied up at 33 a piece with China for golds.

Good thing we’re trotting out the heavyweights this weekend:

Men’s basketball goes for their fifth straight gold today against France.
Women’s basketball goes for their eighth straight gold, also against France, on Sunday.
Women’s soccer plays Brazil in the gold medal game later this morning.

Then, at the closing ceremony, Tom Cruise will pass the torch to Los Angeles for 2028 (provided he survives his “death-defying stunt”).

—Molly Liebergall, Sam Klebanov, Matty Merritt, Abby Rubenstein, Neal Freyman

MARKETS

Nasdaq

16,745.30

+0.51%

S&P

5,344.16

+0.47%

Dow

39,497.54

+0.13%

10-Year

3.942%

-5.0 bps

Bitcoin

$60,524.19

-0.37%

Eli Lilly

$891.68

+5.49%

Data is provided by

*Stock data as of market close, cryptocurrency data as of 6:00pm ET. Here's what these numbers mean.

Markets: Wall Streeters have definitely earned the cocktails they’re going to knock back in the Hamptons this weekend, and with stocks continuing to rally yesterday and wiping out most of the losses from earlier in the week, they’ve got happy news to toast. The past week was so volatile that the stock market had both its worst and best days of the year.
Stock spotlight: Eli Lilly rose, building on gains from the day before when it announced strong quarterly sales for weight loss drugs Mounjaro and Zepbound.

TAXES

Facing billions in backpay, Coke says IRS doesn’t get it

Jakub Porzycki/Getty Images

Coca-Cola could end up billions of dollars in the hole-a over a decade-long tax quarrel that it’s trying to fight (so far, it’s losing).

After losing a recent court decision, the soft-drink-maker announced this week that it’ll sell European bonds to raise more than $1 billion, possibly to help pay the IRS, which has accused it of shifting heaps of income to low-tax countries.

ICYMI: Last week, a Tax Court judge upheld the findings of a 2015 audit and ruled that Coke owes the US government ~$6 billion in missed taxes from 2007 to 2009 and interest (which accounts for more than half of the sum). The decision comes after four years of other court rulings that also favored the IRS, but Coke is sticking to its guns: It says it would pay the $6 billion for now but will also appeal the ruling.

Where it all went wrong

The IRS has clashed with Coke for years over how the company reports income from the foreign subsidiaries that make the sugary concentrate for Coca-Cola drinks. Pepsi’s enemy allegedly has a habit of moving concentrate production to low-tax countries like Ireland, Brazil, and Eswatini, the US Tax Court found. These subsidiaries have recorded “astronomical” profit levels that more than doubled the US parent company’s return on assets, a tax judge wrote in 2020.

As part of a 1996 settlement, Coke used a special formula to recalculate taxable income…that it continued to use every year after without explicit permission. Coke says the IRS and tax courts are misinterpreting regulations and that it shouldn’t owe any money.

And things could get worse for Coke…if it loses on appeal, which experts see as a real possibility. If the IRS then audits Coke for the years since 2009, it could add $10 billion in missed taxes and interest to the sum it already owes the government. That has the potential to wipe out a year and a half of profits in total…and fund the IRS for a year.—ML

WORLD

Tour de headlines

Rescue workers are deployed after a Voepass passenger plane crashed in Brazil

Allison Sales/picture alliance via Getty Images

A plane crash in Brazil left no survivors. All 61 people on board a plane that crashed yesterday in a residential area outside São Paulo were killed, Brazilian authorities said. The Brazilian airline Voepass, which was operating the flight, said it could not immediately confirm how the accident occurred, but footage of the crash posted online showed the plane falling, followed by smoke and fire. The flight, which was headed for São Paulo, took off from Cascavel, about 450 miles away.

Temu’s founder is now the richest person in China. Your $5 impulse buys have paid off big time for Colin Huang, whose $48.6 billion fortune makes him China’s richest person, eclipsing the bottled water magnate who had been on top since April 2021, according to Bloomberg. But the former Google engineer’s journey to the one with the most yuan hasn’t been smooth. He founded his cheap stuff emporium in 2015 and made a fortune, only to see 87% of it get wiped out as the pandemic took its toll on the economy. But despite stepping down as his company’s chief exec in 2020, he’s benefited from its international expansion strategy, including to the US.

Elon Musk is still sparring with politicians. Yesterday, Venezuela’s President Nicolás Maduro, who is clinging to power despite his opponent’s claim to have won the country’s recent election, blocked the nation’s access to X for 10 days, saying Musk had used the platform to incite hatred. Musk and Maduro had previously feuded on X, with the billionaire challenging the politician to a physical fight. In the US, Sen. Elizabeth Warren sent a letter to Tesla’s board urging them to look into whether Musk used the company’s resources to benefit his other business ventures.

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Give your gut a glow-up.

ENTERTAINMENT

BookTok darling Colleen Hoover takes Hollywood

Blake Lively at the premier of It Ends With US

Blake Lively at the film premiere. Jeff Spicer/Getty Images

It’s a busy weekend for wet floor signs at US cinemas, where a sobfest is ensuing thanks to the big-screen debut of Gen Z’s favorite book.

It Ends With Us, the Hollywood adaptation of Colleen Hoover’s best-selling romance novel of the same title, premiered in theaters yesterday. It follows florist Lily Bloom as she navigates a tumultuous relationship with Ryle, a 28-year-old neurosurgeon whose seductive charm belies his abusiveness, and reconnects with her first love, Atlas.

The TikTok-fueled cult following of the book—which sold almost 7 million copies—could translate to a box-office blowout. Preview screenings on Thursday raked in $7 million.

Hoover fever

Readers crying over Hoover’s trauma-filled yet breezy novels became a viral TikTok trend during the pandemic, propelling her to mega-fame.

She’s since dominated bookstore shelves by releasing up to four new titles per year and selling more than 35 million copies of her books.
In 2022, six of her books were in the Top 10 of the New York Times Fiction Bestseller list, and her oeuvre outsold the Bible.

Hoover hate…is also widespread, with detractors arguing that her books treat dark subjects too frivolously or normalize abuse. They also cringe at a passage she wrote about a baby’s genitals.—SK

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ENTERTAINMENT

People want the thrill of theme parks less this summer

Disney Park full of people in front of Magic Kingdom.

Gary Hershorn/Getty Images

It seems the magic is wearing off. Domestic theme parks, including Disney’s, delivered uninspiring Q2 reports that suggest that their post-pandemic reopening booms are starting to cool off.

Disney said despite its theme park revenue jumping 3% during the quarter compared to the same time last year and attendance being stable, its operating income, or cash left over after paying all those roller coaster mechanics, dropped 6%.
Comcast, which owns Universal Destinations & Experiences, reported a 10% decrease in revenue for the parks division.
Six Flags said attendance was down.

Why aren’t people turning out for water rides like they used to?

All three park owners have raised prices recently. Disney CFO Hugh Johnston attributed the theme park slowdown to both lower-income individuals, who can’t afford the pricey vacay, and higher-income travelers, who are opting for international trips instead.

But some travel agents say that people are just holding out until there’s something new to visit, like Universal’s Epic Universe, which will open next year.

Big picture: People are starting to pump the breaks on vacations in general. International flights dropped 10% in June compared to their peak in September 2023, according to Bloomberg’s review of government data.—MM

STAT

Prime number: Paris breaks it down

Rene Nijhuis/Getty Images

It’s only fitting that the sport where your stank face matters had its Olympic debut in the capital of stinky cheese. Breaking, commonly known as breakdancing, premiered at the Olympic Games this summer, and yesterday, three athletes won the sport’s first medals: Gold for Japan’s b-girl Ami, silver for Lithuania’s b-girl Nicka, and bronze for China’s b-girl 671. There’s a chance that these medals, plus the ones handed out today after the men’s competition, will be the only Olympic hardware in the sport’s history—it’s not returning for the Los Angeles Olympics in 2028.

NEWS

What else is brewing

The FDA declined to approve MDMA as a PTSD treatment, which would have been a big step forward for psychedelics use in mental health care, saying further study is needed. But the agency did approve a nasal spray to treat severe allergic reactions as an alternative to shots like EpiPen.
Stellantis will lay off 2,450 factory workers this year as it phases out an older version of its Ram pickup truck.
Iran is stepping up online activity to influence the US presidential election and tried to hack one of the campaigns, according to Microsoft.
Austrian authorities arrested a third teenager in connection with a suspected foiled plot to attack Taylor Swift concerts in Vienna that were canceled as a precaution.
The nonprofit advertising group that Elon Musk sued over an alleged “boycott” of X is shutting down.
Donald Trump said the president should get a say over the Fed’s interest rate decisions.
At the Olympics…Sha’Carri Richardson won her first Olympic gold in the women’s 4x100 relay, while the US men’s team whiffed it. Algerian boxer Imane Khelif also clinched a gold medal after her gender was wrongly called into question.

☕️ BookTok goes Hollywood