The Wimbledon of newsletters


March 29, 2019

Today, Facebook done did it again, and psychedelia is in it for the win, but first.
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Wimbledon tickets are on sale for $104k, but don’t expect any if you’re not royal

The All England Lawn Tennis and Croquet Club announced yesterday it will sell 2,520 Wimbledon debenture tickets (the noble-sounding name for “season tickets”) at the price of $104k a pop, a 60% price increase.

But before all you foreign Federer fans get your white shorts in a bunch, be warned — the debenture system is rigged in favor of the royal hineys that have watched Wimbly for decades.

The devil’s in the debentures

Unlike American single-year season tix, Wimbledon sells them in 5-year bundles. Over the 5-year lifespan, there are 65 days of tennis played, meaning each day is worth $1,605. So — why such a premium? 

First, the resale market is as strong as Queen Elizabeth’s morning cup of Earl Grey: Last year, a buyer who purchased a $66k 5-year debenture sold just 2 years of tickets for $138k.

But the real reason is even simpler: Wimbledon is, quite literally, created by — and for — royalty.

A sporting event fit for a queen

Since 1868, the All England Club’s lawn tennis championships have been the place for the upper crust to mix and mingle (the club’s current president is Prince Edward, Duke of Kent). 

Like the British monarchy, Wimbledon’s debenture tickets are hereditary; Several of the richest and royal-est Brit families have held the debentures since 1920 — so if Prince Harry isn’t your 2nd cousin, you better have a comfortable tent.

Debenture-owning derrières still fill 16.7% of Wimbledon’s seats, and after accounting for media and other reserved seats, only 53.5% of seats are actually open to the public.

The debenture days are far from over

Yesterday’s sale will serve up a cool $260m to the Club, which plans to spend the cash on a new retractable roof (gotta keep the queen cozy) and a neighboring golf course that will cost a cool $85m.

In Britain, debentures are unrestricted financial instruments that are traded in stock markets. So these debentures will eventually sell at massively marked-up margins: Single days this season are already going for $6k+.

It’s a good lesson: Whether you’re sampling strawberries & cream or you’re devouring corn dogs and Bud Lights in a mustard-stained Tom Brady jersey, you can always buy box seats — for the right price.

Wimbly, you wily chap
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Icelandic airline WOW shuts down its operations mid-flight, strands passengers

On Wednesday, nearly 3k passengers were stranded after WOW Air, a low-cost Icelandic airline, hastily ceased operations, grounding all 27 of its airplanes. Nearly 1k people also lost their jobs.

It gets worse: WOW continued to tell passengers the wait was simply a “delayed flight”, until around midnight when gate agents and flight crew boarded the plane and left without them.

Sh*t really hit the thruster when, in classic airline fashion, travelers were finally notified via travel alert on the company’s website hours later.

No frills, huh?

Founded in 2011, WOW Air was part of the affordable airline boom among European carriers. It offered cheap trans-Atlantic fares on routes via Iceland — no frills.

At the time, its model drove down ticket prices as it bucked the notorious nickel-and-diming trend of hidden fees and other overpriced options — a standard among many carriers.

But unfortunately, after massive growth, and even bigger losses (it blew through $45m USD from July 2017 to June 2018 alone), WOW served up the biggest frill of all.

Not the kind of WOWing travelers had in mind

WOW’s chairman, Skuli Mogensen, said he burned jet fuel until the last second to secure funding and save his company — but unfortunately, it was the passengers who were left without a parachute.

WOW customers who were mid-flight and those flying late Wednesday and early Thursday hit the most turbulence: Many had to sink money into hotel costs and find another way home.

According to CNN, Mogensen seemed sympathetic. But when asked what WOW Air could do to accommodate passengers, he simply said, “It’s now, unfortunately, out of our hands.”

» Wow.

Far out, man: ATAI raised $43m to conduct psychedelic medicine research

Weeks after the FDA approved Johnson & Johnson’s ketamine spray for depression, a group of investors joined forces in the largest-ever private financing round for a psychedelic medicine biotech company.

ATAI Life Sciences, a German biotech startup focused on depression and other mental health disorders, raised $43m in Series B funding. It is now the highest valued company in the space, valued at $240m. 

Break on through to the other side

Recreational use of psychedelics became popular in the 1960s, but it didn’t take long for the US government to classify most of them as “drugs of abuse.”

But, according to CNBC, recent clinical studies have found loads of evidence that some of the trippy dippys actually can help patients with certain mental illnesses.

ATAI is currently funding clinical trials for “formerly stigmatized compounds,” like psilocybin (the activator in magic mushrooms) and arketamine (a different form of ketamine than what’s in J&J’s nasal spray). 

Investors are down for the trip

Psychedelics are having a moment: Not only are regulators peaking at the therapeutic potential, investors are down to follow the white rabbit as well — of course, that comes with good, bad, and ugly. 

  • The good: Higher exposure brings in more funding for research. 
  • The bad: Big Pharma is an atrocious industry, where most companies are more in it for the cash than for patient well-being. 
  • The ugly: Rising stars like Compass Pathways, which at one time seemed to be conducting psilocybin trials for the right reasons, sometimes take shady turns to ensure monopolization of a product.

Oh, and guess which company is Compass Pathways’ largest investor? 

» Ok, now we’re trippin’

HUD sues Facebook for housing discrimination based on its narrow targeting

Yesterday, the Department of Housing and Urban Development (HUD) sued Facebook for housing discrimination, arguing that allowing advertisers to target demographics based on race, religion, and national origin violates the Fair Housing Act.

It’s a big step forward that shows federal regulators are beginning to more closely monitor the downstream impacts of large tech platforms.

A specific kind of housing discrimination

”Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face,” said Ben Carson, HUD’s chief.

The lawsuit alleges that Facebook’s platform, which controls 20% of the online advertising market in the US, targets users more carelessly than other large platforms like Google and Twitter (both of which issued statements yesterday confirming they don’t use discriminatory ads).

The lawsuit doesn’t stop there: HUD’s complaint alleges Facebook’s system is so targeted that it often (illegally) focuses on 1 demographic group even when advertisers don’t ask for such narrow targeting.

Regulators are regaining ground 

Facebook responded with surprise to HUD’s heavy hammer strike.

“We’re surprised by HUD’s decision, as we’ve been working with them to address their concerns and have taken significant steps to prevent ads discrimination,” a Facebook rep told Yahoo Finance.

Recently, Facebook scaled back advertisers’ targeting options for housing, credit, and jobs ads, and settled lawsuits with the National Fair Housing Alliance and the American Civil Liberties Union.

But it turns out Facebook’s fiascoes are far from over: HUD said it plans to “use all resources at [its] disposal to protect Americans” from the dirty ’Book.

» I smell a settlement!
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