Steel stallions
Harley-Davidson's heritage
Good morning, throttle jockeys. This is your Stock Market Rundown for August 2nd, 2024. Thanks for riding along with me. Let’s get moving:
TODAY’S TOP STORY: BOOMER BIKERS
The silhouette of the classic Harley is unmistakable, with its low-slung frame and gleaming chrome accents. Sure, maybe the Harley in question is being driven by your neighbor Gary who’s a retired steelworker with sciatica, but while he’s on that bike, he’s the king of the road.
The iconic American chopper was born when childhood friends William Harley and Arthur Davidson built a prototype in a shed in Milwaukee, Wisconsin in 1903.
William had bicycle-building experience, and served as the chief engineer. Arthur was the sales guy who traveled the country recruiting the dealer network that would make Harley a household name.
These days, with GenZ preferring electric scooters over a Road King Special, the overall market for motorcycles is in decline. Harley is selling less than half as many bikes as it did twenty years ago, and expects 2024 sales to be down year-over-year.
To adjust, management is promoting pricier touring motorcycles (which carry higher margins) to its affluent boomer customers. Thanks to this strategy, Harley just reported quarterly profits that beat Wall Street expectations.
Even if it’s more associated with the Grateful Dead than with Taylor Swift, Harley is cemented in popular culture. And despite the decline in motorcycle riding, the Harley Owners Group still boasts more than a million members worldwide. Appropriate that Harley’s symbol on the New York Stock Exchange is “HOG”.
SO WHAT ELSE IS GOING ON?
A former hedge fund manager was just sentenced to six months of home confinement over his role in a scheme to defraud investors. Not sure “home confinement” is much of a punishment for a rich guy… his house probably has three fireplaces and a saltwater pool.
The two least-cool shoe brands are having a spat: Sketchers is suing LL Bean for copying its shoe design. I’ll have to ask the gals in the water aerobics class down at the local seniors’ center for their hot takes on this.
Pernod Ricard, the world’s second-biggest spirits maker, is selling its wine portfolio to focus on liquors, much like when it’s last call at the bar and you abandon beers to focus on tequila shots.
Discover Financial Services is selling a portfolio of student loans to private equity buyers for more than $10 billion. The government student loan website reassures borrowers: “Everything will be okay.” When the government tells me everything will be okay? That’s when I start to get really worried.
That’s it for this week, my friends. Have a fabulous weekend, enjoy the sunshine, and I’ll see you bright and early Monday morning. Yours in capitalism, The Axe
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