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The curious case of Subway bread... October 02, 2020 [View Online]( | [Sign Up]( [Daily Brew]( TOGETHER WITH [Miso]( Good morning. We rarely ever crown a “winner of the week,” but Crocs forced our hand. A special-edition Bad Bunny pair released Tuesday sold out in 16 minutes. Then yesterday Justin Bieber posted a picture of a pair of Crocs on Instagram with the caption, “soon,” implying a future partnership. The influencers have spoken, and who are we to question their wisdom? Crocs are cool. MARKETS NASDAQ 11,326.51 + 1.42% S&P 3,380.76 + 0.53% DJIA 27,817.37 + 0.13% GOLD 1,911.60 + 0.85% 10-YR 0.675% - 0.90 bps OIL 38.71 - 3.75% *As of market close - Economy: A busy day in [economic data]( showed that jobless claims remained high (837,000 last week) while U.S. household income fell 2.7% in August after stimulus measures dried up. The September jobs report arrives this morning. - Covid-19 update: Wisconsin’s situation is [troubling](, while New York City also reported higher caseloads. Paris is mulling [new restrictions]( and so is [Moscow](. REAL ESTATE [Seeking Buyer for Original Pacaso]( [Pacaso house] Will Varner Signs you've made it: Three-ply toilet paper, ordering from a menu that doesn't have prices, and stepping into the foyer of your second home. Yesterday, startup Pacaso [emerged from stealth]( to help you with pad No. 2. The brainchild of former Zillow CEO Spencer Rascoff and exec Austin Allison, Pacaso is pitching "an entirely new category of second home ownership" by selling [partial rights]( to a property, ranging from 12.5%–50%. How it works: Imagine that a timeshare, commercial lease, and Airbnb had a baby. Interested buyers browse Pacaso's listings or find something on the market, then the company sets up the LLC, finds buyers for remaining shares, and handles the other logistics. - In exchange, Pacaso charges an upfront 10% fee and 1% annual maintenance fee. Pacaso launched with just four homes, but it's hoping to spread to 25 markets in the next year with a focus on suburbs and more affordable cities rather than beachfronts and resort towns. It's got $17 million in venture funding, including the backing of former Starbucks CEO Howard Schultz, and $250 million in debt. There are still some questions. Like traditional vacation timeshares, Pacaso properties could see slower appreciation compared to a fully owned home, as well as bitter competition over who gets the house for the Fourth of July weekend. Timing couldn't be better Rascoff and Allison wanted to "democratize" second homes before the pandemic, but Covid-19 offered a perfect opportunity as city residents looked to swap subways for suburbs or upgrade their WFH offices. Home prices are now up 13% annually after four months of growth in new home sales and a [supply squeeze]( that's limiting inventory. Pacaso thinks it has the solution: Besides defraying the cost of home ownership, it would bring new units on the market by buying portions of existing second homes. Looking ahead...real estate experts think home buying enthusiasm could continue [for years]( thanks to low interest rates and older millennials settling down with their first mortgage. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Pacaso%20Emerges%20From%20Stealth%20with%20%2417M:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 RETAIL [The Michael Corleone of the Mall]( [A Bed Bath & Beyond storefront ] John Nacion/Getty Images Just when you thought Bed Bath & Beyond was out, pandemic trends and new leadership pulled it back in.  The backstory: Bed Bath & Beyond was in a bad way last year, with [an ugly brawl]( between activist investors and the executive team. But now? That investor tussle ended in [a c-suite shakeup](, including a new CEO, that's serving it well. The new guy, Mark Tritton, released quarterly earnings yesterday that beat expectations on both revenue and profit. Shares surged as much as 33%. So what happened? - People stuck in their Covid caves homes dropped major cash on home furnishings; housewares sales were up 28% in the quarter ended August. - Bed Bath & Beyond also invested heavily in its online operations, especially in-store and curbside pickup. Digital sales were up 89% in the quarter. Big picture: B-cubed is a rare medium-sized, brick-and-mortar retail chain that's figured out how to dance in the Covid-19 rain. The pandemic has smiled upon big boxers like Walmart and Target, as well as digitally native rivals like Amazon. But peers like Macy's are struggling, [or worse](. + Want to learn sweet retail lingo like B-cubed and even more insight? Read more in [Retail Brew](. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Bed%20Bath%20&%20Beyond%20Surges%20as%20Much%20as%2033%25%20on%20Strong%20Earnings%20Report:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 MARKETS [We're Starting a SPAC]( Well, not yet...but would you be surprised? SPACs aka special purpose acquisition companies aka blank-check companies were the finance fad of the summer, and they're not planning on fading away with the daylight. Two more companies said they're going public via mergers with SPACs yesterday: [Hims](, the direct-to-consumer healthcare company, and Playboy, a "[lifestyle brand](" that stopped printing its magazine back in February.  - Quick explainer: A SPAC is a shell company that goes public and raises funds exclusively for the purpose of acquiring another company, taking it public in the process. Because SPACs provide certain advantages (like making the process of going public a lot less time-consuming) they've had waves of popularity before—but nothing like 2020. SPACs have raised more than $41 billion so far this year, compared to $13.5 billion in 2019. One more sign of the times: The very first exchange-traded fund (ETF) for tracking SPACs [launched]( yesterday and will be heavily weighted toward SPAC legends like DraftKings and Virgin Galactic. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Two%20More%20Companies,%20Playboy%20and%20Hims,%20Join%20the%20SPAC%20Boom:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 SPONSORED BY MISO [Invitation to the Flippin’ Patty Flippin’ Robot Money Party](#) [Miso]( Dear reader, We would like to cordially invite you to the [Flippin’ Patty Flippin Robot Money Party](. Never heard that combination of words before? Bet you’ve never heard of a [burger-flipping robot either](. But there’s a first time for everything. Meet Flippy, the world’s first autonomous robotic kitchen assistant. In addition to being the reason we can type “Flippin’ Patty Flippin’ Robot Money Party,” Flippy is revolutionizing the Quick Service Restaurant industry by drastically cutting overhead costs. The best part? [You can invest in Flippy today](. Oh yes. This is your official invitation to the [Flippin’ Patty Flippin’ Robot Money Party](. For major QSRs that use Flippy, the projected increase in profit margin is 300%. If that’s not a [Flippin’ Patty Flippin’ Robot Money Party](, I don’t know what is. RSVP “yes” to [lots of patty flippin’ robot money](. FOOD [Subway: Sandwich Place or Cupcake Shop?]( [Subway storefront] Omar Marques/Getty Images Here's what a Subway roll is, according to Morning Brew copywriter Henry Stockwell: What it's not, [according to]( the Supreme Court of Ireland: bread. The backstory: In 2006, a Subway franchisee in Ireland [applied]( for a refund on taxes paid between 2004 and 2005, arguing that because its products include bread, a "staple food," it should be exempt. But the country's Revenue Commissioners refused to repay the franchisee, and the case made its way to the Irish Supreme Court. And the Court decided...uh-uh. The justices ruled Tuesday that Subway bread is a "confectionary or fancy baked good," not bread. Under a 1972 law, the sugar in bread can't account for more than 2% of the weight of flour in the dough. In all of Subway's bread options, sugar accounts for 10% of the flour's weight. So the tax stands. The defense: "Subway bread is, of course, bread," said a spokesperson. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Irish%20Supreme%20Court:%20Subway%20Rolls%20Don't%20Count%20as%20Bread:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 QUIZ [Pumpkin Spice Quiz](#) The feeling of getting a 5/5 on the Brew's Weekly News Quiz has been compared to the crunch when you step on your first autumn leaf. It's that satisfying. [Ace the news quiz](. WHAT ELSE IS BREWING - [The CDC]( extended its ban on cruises from U.S. ports until the end of October. - [Ford's CFO]( left the company the same day new CEO Jim Farley started on the job. - [Google]( will pay publishers more than $1 billion over three years for their news content. - [Nikola's]( shares have rebounded in the past few days after the embattled electric automaker made assurances it would hit targets. - [Roblox](, the massively popular gaming platform, is reportedly looking to go public early next year. BREW'S BETS “Baldness is forever.” Talk about a [bald-faced lie](. Thanks to science, baldness can be optional. [Hims]( gives you access to products backed by science to address overall thinning, receding hairline, or crown balding—all with a 90 day money back guarantee. Chat with a Hims medical professional online [for free today](.* Want to know how two female CEOs use food as medicine? Sakara co-founders created [Metabolism Super Powder]( with 100% clean, plant-based ingredients to eliminate bloat, improve digestion, increase energy, and shed excess weight. Heal your gut with [Sakara’s Super Powder today](.* Pretty interesting: 29 [psychological tricks]( marketers use to make you buy more. Follow Friday: Because it’s officially spooky szn, here are the scariest accounts we plan to ever recommend...[Cursed Architecture]( and [Cursed Commercials]( on Twitter, [Cursed Foods]( on Facebook, and the [original home]( to the “cursed” trend, [r/creepypasta](. Click if you dare. - Also, follow the man whose [skateboarding TikTok]( blessed Fleetwood Mac with refreshed sales of Rumour: [doggface208](. *This is sponsored advertising content FRIDAY PUZZLE Promise this is not a weird question if you don't make it one: Name ten common, non-slang three-letter words for body parts. SHARE THE BREW When you share the Brew, you earn rewards. From Brew swag like t-shirts and coffee mugs to exclusive content, we've got something for everyone in our premier rewards program. [Click here to get free swag.]( Hit the button below to start sharing the Brew. [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=4904f90a]( FRIDAY PUZZLE ANSWER Arm, ear, eye, gum, hip, jaw, leg, lip, rib, and toe (yes, there are more)             Written by [Eliza Carter](, [Neal Freyman](, and [Alex Hickey]( Was this email forwarded to you? Sign up [here](. 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