‎‍⚖️ Axios Closer: Elon Musk goes to court

Plus: The race for 20-something shoppers | Monday, July 12, 2021

Open in app View in browser   Presented By Northern Trust   Axios Closer By Courtenay Brown ·Jul 12, 2021 Today's newsletter is 700 words ... 2½ minutes. 🔔 The dashboard: The S&P 500 closed up 0.3%. Biggest gainer? Chemical manufacturer Albemarle (+7%) amid a rally in the materials sector. Biggest decliner? HP (-3%) on the back of warnings of slowing demand for PCs and ongoing supply shortages.     1 big thing: The race for younger shoppers Photo: Scott Olson/Getty Images   Companies see Gen Z as the next big cash cow. Struggling department stores are now getting into the race to court them. What's new: Nordstrom said today it notched a deal with ASOS — the online, budget-friendly fashion house that's laser-focused on young shoppers and boasts millions of active customers. Why it matters: Luring this cohort is pitched by department stores as part of a cure to reverse their decades-long slump. Actually getting them in the door could be a heroic feat. "There's a big opportunity for us to be more meaningful to 20-something customers and to young customers," Peter Nordstrom, the company's chief brand officer, told the New York Times. But, but, but: "It is a very big pivot. If you ask Gen Z where they shop, department stores are not on their radar," says Neil Saunders, a retail analyst at GlobalData. Deal details: Shoppers who want to pick up or return ASOS merchandise will have the first opportunity to do it in person — in Nordstrom stores. Nordstrom also gets exclusive retail rights for two underlying brands, Topshop and Topman. (No word on the financial terms.) The backdrop: Rival department stores have tried to stake a claim with Gen Z. Macy's launched a slew of "Instagrammable" store concepts in 2018 — with a clear eye on shoppers of the future. But that's since "faded into obscurity," says Saunders.     2. Charted: The (expected) profit boom Data: FactSet; Chart: Axios Visuals Coming this week: Corporate earnings. Lots of them. Why it matters: What companies reveal when they open up their books will send an important signal about the state of the economy. The season kicks off with some of America's biggest banks — including JPMorgan and Goldman Sachs, both reporting tomorrow. What's expected: Profits (on a per-share basis) could come in 40% higher than this time last year, according to estimates cited by the WSJ. Last year during the height of the pandemic, banks put aside billions of dollars in preparation for a monsoon of loans gone bad. That never materialized. Other names to watch: PepsiCo and Delta Airlines, which also report this week. Go deeper: What to watch for during earnings season     3. What's moving 🚀 Virgin Galactic plans to sell $500 million worth of stock — one day after its first commercial spaceflight with founder Richard Branson. (CNBC) The stock closed down 17%. 💉 State Republican lawmakers are pushing to ban "discrimination" against unvaccinated people — a move that could tie the hands of businesses that want to protect their employees and customers. (Axios)     A message from Northern Trust Market Currents podcast: Listen now     Market Currents, a new podcast from The Northern Trust Institute, explores today's most hotly debated investment topics. Join host Katie Nixon as she interviews industry experts to investigate the evidence on both sides by separating facts, myths and theories.     4. Elon Musk goes to court Photo: Christophe Gateau/Picture Alliance via Getty Images   Elon Musk appeared in court today to defend Tesla's 2016 purchase of SolarCity — and to downplay his own power over the company that's practically synonymous with his name, Axios' Kate Marino reports. Why it matters: If the court finds that Musk acted to benefit himself — rather than Tesla — in the SolarCity deal, he may have to personally reimburse Tesla for the $2.6 billion acquisition. The backstory: When Tesla bought SolarCity, the company had just turned in two years of massive losses and owed $3 billion in debt. Critics called it a bailout. Musk owned 22% of SolarCity, a home-solar company, at the time. What he's saying: "Since it was a stock-for-stock transaction and I owned almost exactly the same percentage of both, there was no financial gain," Musk said today in court, CNBC reports. He disputed the accusation that he controlled Tesla board members — or that he forced them to back the deal, CNBC wrote. Details: The case was brought by plaintiffs who owned Tesla's stock. Arguments kicked off today and are expected to go for two weeks.     5. New toys: Icons of failed startups past Screenshot from deadstartuptoys.com.   Infamously failed products are coming to life thanks to viral prank company MSCHF's latest stunt: Dead Startup Toys, Axios' Hope King writes. For $40, you can buy a miniature version of the $700 IOT Juicero juicer from 2017, or the "miniLab" blood-testing machine from Theranos, which shuttered in 2018. Flashback: The companies parodied raised about $1 billion collectively for their ideas.     6. What they're saying "These streaming services have been making something that they call 'movies.' ... They ain't movies. They are some weird algorithmic process that has created things that last 100 minutes or so." — Media mogul Barry Diller on streaming giants' original content, in an interview with NPR.     A message from Northern Trust Trusts and sustainable investing: Building the bridge     Sustainable investing is on the rise. But one category of investors remains on the sidelines: trustees of personal trusts. Learn how grantors, beneficiaries and trustees can bridge the gap between sustainable preferences and fiduciary duties.   Thanks for reading! 👍 Click here to refer a friend — you might win free Axios swag. Like this email style and format? Learn more about Axios HQ. It'll help you deliver employee communications more effectively.   Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here. Sponsorship has no influence on editorial content. Axios, 3100 Clarendon B‌lvd, Suite 1300, Arlington VA 22201   You received this email because you signed up for newsletters from Axios. Change your preferences or unsubscribe here.   Was this email forwarded to you? Sign up now to get Axios in your inbox.   Follow Axios on social media: