R-Rated Revival

Good morning! Daytime TV royalty Phil Donahue, who hosted over 6,000 episodes of his revolutionary talk show from 1967 to 1996, died at 88 [yesterday](. Today we’re exploring: - Mezze millions: Cava’s $11 billion valuation, in context. - Unrestricted: Deadpool 3 is breaking R-rated records. - Buzz cuts: Headcounts are shrinking at startups. Have feedback for us? Just hit reply - we'd love to hear from you! TOGETHER WITH [Sponsor Logo](   While the restaurant industry was buzzing with the news of Starbucks [poaching]( Chipotle's CEO Brian Niccol, and subsequently adding [billions of dollars to its market cap](, another fast-casual chain was quietly hitting record highs. Cava, the burrito chain's Mediterranean doppelgänger, saw its share price close just shy of $99 on Friday. Having risen more than 150% since its IPO last June, Cava is now worth some $11 billion, 2.6x what rival salad chain Sweetgreen is worth. That’s modest compared to fast-food giants like McDonald's ($200 billion) or Yum! Brands ($39 billion), but it’s remarkable because Cava only has 323 stores to its name. That values Cava at about $35 million per store. Profit-packed pitas In an industry that often leans on the franchise model, Cava is forging ahead with its company-operated strategy, in a similar vein to Chipotle, which owns and operates all but 1 of its 3,500+ stores. So, why such a high price tag for a Mediterranean salad chain? Well, investors are generally happy to pay up for two things: profits today or profits tomorrow. Cava promises more of the latter, with its revenue surging 30% last quarter and ambitious plans to open 1,000 [new locations]( over the next decade, with a portion including higher-margin digital drive-thrus. Some investors have also been drawn to the tantalizing "Cava is the next Chipotle" narrative. Since its IPO in 2006, the Mexican Grill stock has delivered eye-popping returns of over 6,000%. For Cava, expectations will be high for the company’s Q2 earnings on Thursday, August 22nd. [Read this on the web instead](   Deadpool & Wolverine, the super meta Marvel movie starring Ryan Reynolds and Hugh Jackman, has eclipsed 2019’s Joker to become the highest-grossing R-rated movie [ever](, having taken $1.14 billion worldwide. Technically, however, when you adjust for [inflation](, Mel Gibson’s The Passion of the Christ is still the top-grossing R-rated movie in domestic box office history… for now. A Marvel match made in marketing Indeed, Marvel’s first R-rated movie has climbed the charts in just 4 weekends and became only the second release to cross the $1 billion threshold in 2024, on the heels of another Disney follow-up (Inside Out 2). The financial success of the 34th installment in the MCU suggests that [Ryan Reynolds’ theory]( about the movie — that it’s the first R-rated film to fit the “four-quadrant” model, where a movie appeals to males and females, as well as those above and below 25 — is on the money, with Marvel’s president Kevin Feige calling it the “[most wholesome R-rated film that anybody can ever see](”. The Deadpool threequel is helping to spark a resurgence for the age rating, which requires under-17s to be accompanied by a parent or guardian. Thanks mostly to the Marvel flick, a new Bad Boys movie, and a handful of horrors, R-rated movies have accounted for just shy of 30% of domestic box office takings so far this year — the highest market share (pandemic era aside) since the turn of the century. [Read this on the web instead](   [Sponsored by Percent]( On the cards: private credit There’s an alternative to high-yield bonds turning the heads of investors. Per an analysis from T.Rowe1, adding 10% private credit to a traditional 60/40 portfolio from 2004 to 2023 would have historically reduced volatility and improved risk-adjusted returns.2 Institutional investors are taking note — and thanks to Percent, individual accredited investors are too. [Percent’s innovative marketplace]( connects investors with corporate borrowers, simplifying investment and portfolio management. Percent has funded 600+ deals, with a [current weighted average APY of 18.07%.](3 Percent investors also benefit from shorter deal durations (avg. 9 months), low minimums (from $500) and monthly interest payments available from most deals on the platform. Discover more about diversifying your portfolio with [private credit on Percent](. [Open a Percent account and get up to $5004 with your first investment5]( [Open a Percent account and get up to $5004 with your first investment5](   The startup squeeze The startup world is facing rougher seas. Over the past year, the number of fledgling companies closing shop has surged by 60%, and startup bankruptcies are now 7X higher than in 2019, according to data from Carta [reported by the FT](. With higher interest rates, funding has dried up for many startups. Anyone involved in AI may still be having success fundraising, but in many other industries the landscape is significantly more challenged than it has been in recent years. Indeed, data from PitchBook reveals that AI and machine learning startups raised some $27 billion last quarter — [nearly half of all VC investment](. With dealmaking slower than it was in 2021, many startups are scrambling, trimming what is often their biggest expense: employees. Data from [Carta]( shows that headcounts have dropped across the board. For instance, seed stage companies have gone from having nearly 7 employees on average to just over 5, while companies that closed Series C rounds in the first half of 2024 did so with workforces that were, on average, 43% smaller than those of last year. Interestingly, these reductions appear to be driven more by hiring freezes than outright layoffs. The first 4 months of this year saw the lowest number of new hires for those months in the past 4 years. Most striking, January — which is typically a busy month for recruitment — recorded its lowest number of new hires so far this decade. It seems the startup world is, perhaps out of necessity, embracing the mantra of "doing more with less." [Read this on the web instead](   More Data - NASA scientists are trying to work out whether the mysterious object they spotted speeding at 1 million mph is a low-mass star or a brown [dwarf](. - Perdue is recalling over 167,000 pounds of frozen chicken nuggets and tenders after some customers reported finding metal wire in [the products](. - After racing for nearly 600 miles, Kasia Niewiadoma won the women's 2024 Tour de France by just 4 seconds, the smallest margin seen in either the women’s or men’s [races](. - Shares of 7-Eleven’s Japanese owner soared 23% after a buyout offer from a Canadian [rival](. - Elon Musk’s charm offensive with advertisers hasn’t worked, with X's ad revenue [down]( 24% in the first half of 2024. - AMD is chasing some of Nvidia's AI buzz by acquiring ZT Systems for $4.9 billion to bolster its AI [ecosystem](. Looking to diversify your investment portfolio? Check out [private credit](, the alternative asset with potential returns up to 20% APY.3 Thanks to Percent, both accredited and institutional investors can access [private credit deals starting with $500.](5 Ad   Hi-Viz - One dataset, 20 different [visualizations](. Off the charts: Which three cities boast the most Michelin-starred restaurants? [Answer below]. [Answer here.](   Thanks for stopping by! Have some [feedback](mailto:daily@chartr.co?subject=Feedback&body=Hi, I like the newsletters, but I had a thought for you...) or want to [sponsor this newsletter](mailto:advertising@sherwoodmedia.com?subject=I’m interested in advertising with Sherwood Media)?   Not a subscriber? Sign up for free below. [Subscribe](   Advertiser’s disclosures: 1[T.Rowe](, September 2023 { See the Hypothetical Portfolio Risk/Reward Analysis chart for September 2004–June 2023 on page 4. 2 This is not investment advice. Please consult with an investment professional or tax professional. 3 Past performance is not indicative of future performance. Hypothetical/modeled performance is not actual performance achieved by an investor. Hypothetical analysis should be considered carefully. See Disclosure 1 above. 4 The up to $500 cash bonus offer is open to first-time investors who make a minimum investment of at least $1,000 in a single offering. See [website for further details](. 5 Alternative investments are speculative and possess a high level of risk. No assurance can be given that investors will receive a return of their capital. Those investors who cannot afford to lose their entire investment should not invest. Investments in private placements are highly illiquid and those investors who cannot hold an investment for an indefinite term should not invest. This website is only available to certain qualified investors. 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