Good morning everyone,

Today we’re covering Juul’s bold new strategy and discussing Nike’s woes.

And here’s what we’ve been talking about at Raging Bull HQ …

“Basically the Apple store for people who blow dank ass clouds.” – Jeff explaining Juul’s idea to Jason

Keep raging,
Jeff & Jason

THE MARKETS

THE HEADLINES

With great power comes great responsibility

Boomers have already blamed millennials for killing off plastic straws, “breastaurants” and cheap domestic beer.

The next target? LaCroix. Shares of LaCroix parent, National Beverage Corp, dropped 2.9% on Thursday after Guggenheim Partners suggested that the company’s sales were in a “free fall.” The fizzy flavored water company’s price target was cut from $45 to $36 dollars.

Guggenheim Analyst Laurent Grandet said that his company doesn’t believe that LaCroix can recover while in the hands of National Beverage, and cites increased competition, lack of innovation, and inexperience in managing a rapidly growing brand, as reasons for the brand’s bleak outlook.

So what are they buying?

E-cigs! While LaCroix struggles to win the hearts and minds of young professionals across the US, Juul is exploring the possibility of opening its own retail locations to counteract the recent crackdown by the FDA. 

Juul plans to use retail locations to gain valuable insight from shoppers that it can’t typically get from convenience store or smoke shop partners, while also giving current users the ability to test new products, and recycle old ones. As of now, rumor has it that Juul is targeting Texas as its testing ground, given the high smoking rate. Clear eyes, full pods, can’t lose. 

Bottom line: “If this trend keeps up … short Chipotle.” – Jeff

Just do it

Shares of Nike have taken a beating on news of the US-China trade talks falling apart. How bad is it? The company resorted to writing a strongly worded letter to POTUS asking him to reconsider tariffs on shoes made in China. 

And when the company isn’t busy adopting your grandmother’s preferred method of relaying dissatisfaction, it’s facing headwinds as US consumers cut back on discretionary spending. Apparently, self-lacing Back to the Future Air Mags aren’t a great investment during a time of economic uncertainty. Who knew?

Exhibit A: Look no further than Foot Locker which relies on Nike for more than ⅔ of its sales. The mall staple missed Q1 earnings and revenue projections. For what it’s worth, Foot Locker’s woes certainly also reflect Nikes direct to consumer push and shift to online sales.

Bottom line: “A tidy resolution to this trade war would prove beneficial to Nike’s stock. Hey, stranger sh*t has happened.” – Jeff