WNBA is almost as popular as the NHL; Chiquita finances terror; National Bank gobbles CWB; Hallucinogenic Beer; and Moonwalking with Einstein.

Greetings folks and a warm welcome to the 6th edition of Sam’s Friday Finance Weekly. For those of you ‘working from home’, be careful as it appears that employers are cracking down. Wells Fargo said former employs tried to ‘create the impression of active work’ through ‘simulation of keyboard activity’. Translation they appeared to be working by banging on the keyboard. I am curious as to what techniques they used to simulate key activity, alas the FINRA filing doesn’t elaborate on that.

The WNBA is all over the news as they started their 28th season (I was shocked that it's been in operation for 28 years!). 400,000 fans attended games, making it the largest attendance in 26 years.

• Even more impressive, the league averaged 1.32 million viewers per game across its four broadcast partners – nearly triple last year's average of 462,000. For reference, the NHL averaged 504,000 viewers per game during the 2023-2024 regular season, according to Nielsen.

• Some other notable tidbits from their first month include:

  • Merchandise sales are up 236% relative to 2023.

  • League pass subscriptions are up 335% relative to May 2023.

  • WNBA arenas averaged 94% capacity in May – a 17% increase from last year.

• Last year, the Golden State Warriors agreed to pay a record $50M expansion fee to bring a WNBA team to the Bay Area. During May of this year, it was announced that Kilmer Sports Ventures agreed to pay an identical expansion fee as part of a larger $115M commitment to bring a WNBA franchise to Toronto.

• With teams in Seattle and Chicago recently valued at $130M and $85M, respectively, it’s hard not to wonder if some sports investors may have missed out on a massive opportunity.

• Despite its record-breaking start, the WNBA is reportedly set to see losses rise to $50M this year – a fivefold increase relative to its historical average annual loss. This underscores the importance of securing a lucrative domestic rights deal in the coming year.

I must admit that I am not fully up to speed with the WNBA. The only thing I read about the WNBA is the treatment of Caitlin Clark (she’s basically being bullied). That could be another source of revenue – a reality TV show based on the WNBA. They clearly missed the boat with the NBA, which has more drama than the Real Housewives of [some big city]. (Source: Yahoo, Sportico, Sports Pro Media).

Chiquita, the cute company that sells bananas (the ones with the annoying blue stickers), isn’t so innocent.

• A Florida jury ordered Chiquita Brands International to pay $38.3M to 16 family members of the 8 people killed by the United Self-Defense Forces of Colombia (AUC).

• The AUC is a right-wing paramilitary group that’s considered a terrorist organization by the US. From 1997 to 2004, the AUC received direct funding from Chiquita in exchange for the protection of its assets in the region.

• While similar cases have previously been brought against Chiquita, this verdict marks the first time the company has been held responsible for the AUC’s actions. The ruling also represents a rare occasion of finding a private US-based company liable for human rights abuses in another country.

• Chiquita is one of the world’s largest banana producers, with over 20,000 employees and operations spanning more than 70 countries. According to estimates, Chiquita sources over 2.7 million tonnes of bananas annually, contributing to peak revenues of $3.1B in 2023.

Think about that – buying bananas funds terrorism, or rather, protection. Chiquita has announced that they will be listing on the CEO-friendly Texas Stock Exchange as soon as its operations (I made this up and it will make more sense if you read edition 5). (Source: AP, Zippia, IISD).

HSBC was gobbled up by RBC, and unless you live under a rock, you would have heard that CWB is going to be purchased by National Bank (subject to government approval).

• From a strategic perspective, this deal makes a lot of sense. National Bank is a Quebec-based bank, and CWB is headquartered in Edmonton (Western Canada for all my international readers). Additionally, CWB has been more of a business bank, so it bodes well for a more retail-focused bank.

• What is baffling Bay St (our equivalent of Wall St) is the whopping 110% premium on the stock. Typically, M&A premiums are 30-40%, so it's hard to fathom the premium being offered.

• The deal is an all-stock deal, which makes sense because National Bank would have to write a $4.7B cheque otherwise. National Bank has been a hot stock and the best performing (up 90% over the last 5 years) compared to the big 6.

• So why the big premium? Well, it turns out there is a logical explanation. Prior to the buyout, CWB was trading around 0.7 x its book value, which is roughly half of the big 6, which is around 1.4x. To put that into perspective, when RBC purchased HSBC Canada, it was purchased for 2.5 x book value. So the offer at a 110% premium actually makes sense. HSBC also had a very lucrative FX platform that would warrant a higher premium.

It will be interesting to see how CWB fits in with National Bank’s culture. CWB is still very much a relationship bank, akin to the old-school way of banking. This particular section had too much math, especially for a Friday; my apologies. Wait until you read the book summary. (Source: Globe and Mail)

To wash your brain of the math above, let's talk about beer. Is the alcohol in beer not giving you enough of a kick? Well, back in the good old days, they had hallucinogenic beer.

• Black henbane (Hyoscyamus niger) is a noxious species of plant that contains toxic properties which can lead to memory impairment, confusion, seizures, and even death if ingested in large doses.

• The plant was also a commonplace ingredient used by some ancient brewers to increase the potency of their beer, given its psychoactive effects. As one 19th-century physician described it, henbane felt “as if some diabolical force took possession of the brain and prevented its function.”

• In 2011, archaeologists discovered remnants of a Celtic beer recipe over 2,550 years old at a Neolithic brewery site in modern-day Germany that called for henbane. A similar discovery was made in Scotland.

• The use of henbane in brewing was outlawed in Germany in 1516; however, it remained legal in other countries. As men began to enter the women-led brewing industry during the reformation period (yes, women used to run the beer industry), many female brewers were accused of witchcraft. As such, the plant would go on to be known as the “witches’ herb.”

With psychedelics starting to become more mainstream, hallucinogenic beer might make a comeback. I, for one, have no desire to be both high and drunk. I guess an upper and a downer should even out to make me feel ‘normal.’ Let’s start coming up with beer names. (Source: Vine Pair)

Book Summary – Moonwalking with Einstein:

Before calendar invites, the printing press, or even the invention of writing, humans were much more reliant on their memories. Nowadays, in the era of supercomputers, smartphones, and the internet, our ability to retain information seems to be deteriorating.

Here are some powerful techniques you can use to commit anything to memory:

1. Create a memory palace by associating images with things you want to remember. For instance, if you need to remember a list of items, try the following visualization technique. Picture a place that you are intimately familiar with and envision the first item on your list lying next to you in this environment. Then imagine moving around this environment and continue to place items throughout your surroundings.

2. The chunking technique can help us process information into your long-term memory by creating patterns which are easier to memorize. For example, take a 12-digit number like 150699090369 and convert it into two recognizable date formats (i.e., 15/06/99 and 09/03/69).

3. Use your imagination to aid your memory by using images to represent each word or sentence in a lengthy text. For instance, to memorize prose or poetry, follow these steps: a) read a set of lines and get a sense of the meaning of it, b) create an image that captures that set of lines, and c) assign the image to a particular locus in your memory palace.

4. Use images to aid your memory by creating a straightforward visual association with the person’s face and their name. For example, if a person’s name is Raegan, imagine them carrying a ray gun during your first meeting.

5. The major system is a code that converts numbers into consonant phonetic sounds, which we can turn into words and vivid imagery for our memory palace. Here is the code:

Using this system, 43 would become ROM, 44 would be RARE, and 45 – RAIL. Now fill them with vowels to make meaning out of these words (i.e., 43 = room, 44 = rear, 45 = rule).

6. For longer strings of numbers, a more sophisticated technique known as person-action-object (PAO) can be employed. PAO implies that every two-digit number connects to an image of a person doing something with an object. For example: 44 = Thor (a person), 28 = David Beckham kicking a soccer ball, 32 = Picasso painting Mona Lisa. That’s how 44-28-32 can quickly become a strangely recognizable image of Thor kicking the Mona Lisa.

Okay, let’s face it, you won’t use all these techniques, but at least it gives you an insight into how smart people think. Now that we've scrambled your brains, it might be a good time to duck out of the office and enjoy the weekend. Please don’t hesitate to forward this to friends and family.

Cheers,

Sam