Meatball marinara
Private equity eats fresh
Good morning, sandwich artists. This is your Stock Market Rundown for September 1st, 2023. Thanks for joining me. Let’s bite in:
TODAY’S TOP STORY: HOAGIE EMPIRE 🥪
Everybody’s got their favourite Subway sub. Mine? Tuna on white bread with lots of hot peppers, and throw some extra mayo on that bad boy. No shame in my sandwich game.
It’s astonishing that a chain whose sandwiches are just as fattening as a Big Mac used to run commercials claiming its food helped you diet. Remember Jared Fogle, who claimed to have lost 245 pounds in a year by eating two subs a day?
Subway featured this grinning buffoon in their ads for fifteen years, until it turned out their star mascot was a predator. Subway really should've gone the McDonald’s route with their pitchman… fictional clowns don’t have any risk of being convicted on child porn charges.
Subway has since faced more prosaic scandals—who can forget when their bread was revealed to contain an ingredient commonly used in yoga mats?—but has retained cultural relevance. In recent years they’ve expanded to 100 countries, and racked up ten consecutive quarters of positive same-store sales. That’s a lot of six-inch cold cut combo subs flying out the door.
Until recently, Subway was still owned by the families of the two men who founded the business in 1965. Both those founders have now passed on to the big sub shop in the sky. So, the heirs are cashing out of the hoagie business: they just sold Subway to private equity firm Roark Capital for $9.5 billion.
Roark Capital has quite a greasy empire: they also control Jimmy John’s, Arby’s, Baskin-Robbins, and Buffalo Wild Wings. I’m guessing kale isn’t a big expense line item for these fast-food kings.
SO WHAT ELSE IS GOING ON?
Doing business as a foreign company in Russia has become so impossible that Heineken just sold its entire Russian business for $1. Ten bucks could buy a pint plus the brewery that made it, and still leave you with change.
The oil industry isn’t spending enough to replenish reserves. Execs are worried that the transition to renewables means we’re near “peak oil”, but sinking too little into capacity risks leaving the planet undersupplied with that sweet Texas tea.
UPS moves 5% of American GDP on a daily basis, so if the men in brown go on strike, everything grinds to a halt. Happily, the union covering UPS employees just ratified a new contract, guaranteeing no interruption in your Amazon orders of shaving cream and dental floss.
If you haven’t heard of Sweetgreen, you might soon. It’s a bougie chopped-salad chain that recently went public, and they just hired a couple of Chipotle execs to mastermind their national expansion. My salad order: Caesar with extra garlic, hold the food poisoning.
That’s all for this week, team. Stock Market Rundown will be off Monday for Labor Day. Crack a cold one and have yourself a fantastic long weekend. We’ll reconvene bright and early Tuesday morning. Yours in capitalism, The Axe