Boeing Dreamliner Crashes in India & Chime’s IPO Gives Jolt to Wall Street
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It's your turn. Visit servicenow.com. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Chime has made its way from Dallas Mavericks jerseys to the stock market. Then scary but cute elf-looking Laboo Boo dolls are taking over the world. It's Friday, June 13th. Let's ride. ♪

Tensions have escalated in a big way in the Middle East. Last night, Israel launched a major series of attacks on Iran's top security brass and nuclear infrastructure, citing the existential risk posed by Iran possessing nuclear weapons. Israeli jets killed three of Iran's top generals, decimating its chain of command and hit the country's top nuclear enrichment facilities that house centrifuges underground.

The strikes come as the U.S. was planning to kick off a sixth round of nuclear talks with Iran this Sunday, with President Trump believing that a nuclear deal through negotiations was possible. In a statement following the attack, Secretary of State Marco Rubio said Israel acted unilaterally and the U.S. was not involved.

Markets reacted to the attack overnight. Oil prices jumped more than 7% to reach a multi-month high. I'm worried that the conflict could disrupt oil supplies. According to Reuters, it was the largest intraday gain for oil since Russia's invasion of Ukraine back in 2022. U.S. stock futures are also in the red heading into this morning. Israel said its actions are, quote, just beginning and Iran has already launched refineries.

retaliatory strikes and what is expected to be a much larger counter-attack so you know this thing is probably most likely far from over

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A Boeing 787 Dreamliner operated by Air India crashed shortly after takeoff from Ahmedabad airport yesterday with 242 people onboard, raising new concerns for the embattled aircraft manufacturer. It marked the first fatal 787 crash, marring a perfect safety record since the plane entered service back in 2011.

In videos shared to social media, the plane can be seen taking off from the airport before struggling to maintain altitude, never getting more than 625 feet off the ground before crashing into a nearby hostel housing doctors. An early investigation is focusing on whether the aircraft had a loss in engine thrust, though a number of factors were likely involved. Only one person on board survived the flight, according to Air India.

The incident once again shines a spotlight on Boeing after years of safety issues, grounded fleets, production limits, and massive financial losses. Boeing had been in the midst of a renaissance under new CEO Kelly Ortberg, starting to ramp up production and reporting a narrower loss of

$31 million in Q1 compared to last year. Its stock had also climbed over 50% since April as it doubled its aircraft deliveries in May from the year before. But Neil, this tragedy stops the rally in its tracks with Boeing stock falling 5% yesterday as an investigation into the crash gets underway. First of all, just...

Truly wild that this one guy survived. There's one survivor, Vishwash Kumar Ramesh. He was sitting in seat 11A and just kind of got out of the plane after a crash and walked toward a nearby ambulance. He was a British citizen, uh,

just have no idea what's going through his mind right now. Let's talk 787. It's been in service since 2011. This is Boeing's newest plane, and it's had a pretty sterling record. As you mentioned, Boeing says it's carried 1 billion passengers so far. They've got 1,100 Dreamliners around the world in service. And if you've flown...

overseas or in any sort of long route, it's possible that you probably took this plane because it is extremely popular. It's one of Boeing's best-selling aircraft. There have been a few snags. They had to ground the plane multiple times for various production issues. And then last year, during a lot of the safety investigations into Boeing, a whistleblower came forward and said that the production process for creating the Dreamliner, which happens in

South Carolina, not Seattle, like most of Boeing's other planes, was flawed. Boeing pushed back on that very vociferously, saying we looked into the issue that he brought up. It is fine. So again, they're going to take a long time to figure out what happened here. What do you hear aviation experts say after any crash? They're saying, like, don't jump to conclusions. You're going to hear a lot of theories. We have grainy video footage, but these things take time and just sort of all of your theories could be bunked by the time we learn more what happened.

Yeah, there's usually more than one thing that went wrong when you see a crash of this magnitude. Also, I talked about Boeing's kind of recent renaissance. Through all of its setbacks that we've described over the past few months and really the past few years, customers have continued to line up to buy its aircraft. I mean, last month alone, it received a $96 billion order from Qatar, which was the biggest order for 787s and wide-body jets in company history. So we'll see if this crash has...

affects that order at all. And yeah, it really has stopped this rally in its tracks because momentum was building in May. Boeing secured more than 300 new orders. They produced 38 new 737 MAX jets. So it did look like they were finally hitting their stride under this new CEO, but this strategy just

is absolutely another setback for them. And just zooming out, 2025 has been a really bad year for commercial aviation. It's among the worst in the last decade in terms of deaths. It's the worst. This particular one, this Air India flight was the worst commercial airline disaster

since Malaysia Airlines 17 in 2014. That was shot down over Ukraine, killing 298 people. This year is the worst, most deadly we had since 2018 and 2015. We had that American Airlines flight going down near DCA in January when it collided with a military helicopter. Aviation experts once again say by far the most deadly

A safe way you can go from point A to point B is still airlines. But, you know, you can imagine there will be some hesitancy on the account of the flying public after seeing a few of these disasters happen this year.

Moving on, if it wasn't official before, it is now. The IPO market is red hot. Yesterday, the fintech company Chime debuted on the Nasdaq, popping 37% in a first day of trading that saw heavy interest from retail traders. Chime is one of those fintechs that gives off the impression it's a bank while not actually being a bank at all. Some call this class of company a neobank.

It offers a range of financial services like checking accounts, debit cards, and more, but without charging high fees or, in many cases, any fees at all. It partners with two smaller banks to ensure your money is FDIC-insured and makes money by taking a cut every time you swipe one of its cards while making a purchase known as an interchange fee. Like many other fintechs, Chime has had a wild couple of years. It

boom during the free money era of the pandemic, raising $750 million at a $25 billion valuation. But the sugar rush wore off a few years later, and its valuation as it closed trading yesterday was just around $12 billion. Still, Chime's successful debut is the latest in a string of IPOs that have received a champagne toast reception to the public markets.

AI giant CoreWeave is up nearly 300% since it IPO'd in March. And stablecoin company Circle is also up more than 240% since its IPO last week. Toby, MBD going public when? Seriously, one thing I like to do when a big company goes public is just go through and see which investors made money on this deal. And when it comes to Chime, the investor groups are kind of divided into two buckets. There are the early firms that took a swing on Chime when it was

like this low fee banking concept was still kind of a newer idea and they are swimming in it. But then you look at the bigger firms that you probably have heard of, like Sequoia SoftBank, who came in at the literal peak, that very frothy time in 2021, 2020, where valuations just skyrocketed and they are pretty deeply in the red. They were pouring in at a valuation of $25 billion, which is clearly below the $13 billion market cap that Chime ended the day trading at. So

well below its IPO price, but still zooming out, this is a very solid IPO overall. The stock did pop because, you know, it does seem like there's some renewed enthusiasm for these public tech companies kind of entering the public markets. Yeah. I mean, according to Chime CEO, they,

they say that financial services, the largest industry in terms of market capitalization, but in terms of industry disruption, there hasn't really been any. And there's this new wave of FinTech companies. They, they are technology companies posing as bank companies and partnering with banking companies.

that basically just have this beautiful consumer app package that lets you do all these financial services that you might be wary of with a traditional bank. And one of those features that is super successful for Chime is called MyPay. It lets customers access $500 from your paycheck early as a line of credit. That was huge during the pandemic when people were drawing on their unemployment benefits.

and getting their stimulus payments faster. So that drew a ton of users in to Chime, and that's just one of the innovations that Chime is doing and other of these neobanks are doing that they say the financial industry has just neglected for so long. And Chime still thinks it has a ton of upside. They say that they serve all,

less than 5% of the 200 million Americans who earn $100,000 or less per year. That is their sweet spot. Those are the group of people that they want to target, and they have been targeting them quite heavily. They spent nearly $520 million on marketing in 2024, specifically to that group. And if you're only at 5%, you can say, well, we have a long way to go there. So they're clearly going all out here, trying to win over this specific category.

customer segment, and they have a little bit more runway left. It's Friday, so you know what time that is. Stock of the week, dog of the week, where we pick one company that stayed hydrated and another that should really drink more water. My stock of the week is OpenAI because the chat GPT maker is making a serious case that it's on its way to becoming the Google of a new generation. Just two and a half years since it launched its potentially world-changing chat

Thank you.

million weekly active users, and you can only draw one conclusion. This is the fastest growing product in the history of technology. But at what cost? OpenAI's revenue surge is fueled by tons of spending that requires outside funding. It just raised $40 billion in the largest ever venture capital funding round. Plus, it's not profitable, far from it, losing about $5 billion last year. Still, it's not profitability, but widening that lead over competitors that's on CEO Sam Altman's mind

and his ambitions are clear. He wants OpenAI to be the next Google, and he himself wants to be the next Steve Jobs. Yeah, high and lofty expectations right there. But the next Google doesn't just mean like how you go to market. It really is Google kind of blitzed ahead of the field, won the search market, and built up such a lead that no one else could really dent into them anymore. And what you're looking at here is a little bit of a lock-in effect where you bring people in, and then as you

use the service, you make it harder and harder to leave because you're probably not going to, for instance, switch to Android if you've bought all these Apple devices, although you switched from Android to Apple the other way around. Basically, ChatGPT wants to say, hey, you've built up this memory, you've built routines within our platform. You're not going to switch over to Anthropix Cloud or XAI's Grok because

because you have been locked into this ecosystem. So when they say next Google, they really do just mean we want to build up such a lead that no one else can even come close to catching us. - And maybe its biggest competitor in all of this is Google because in that internal slide deck where they showed, you know, we're going up into the right hockey stick growth, everyone else is staying flat. There was another company that was catching fire, doing really well. And that was Google Gemini. It moved into second place

After ChatGPT, so maybe on its way to become, or with its idea and goal of becoming the next Google, its biggest competitor is still Google. We're going to take a quick break, but up next, we got our dog of the week.

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Our dog of the week is all the companies impacted by immigration crackdowns. Brands from Coca-Cola to Modelo are feeling the effects of what it means to lose Hispanics as a key spending group. As fear and uncertainty surge through communities across the country, spending habits are also shifting with shopping trips and restaurant visits in decline. Coca-Cola's sales volume in North America fell 3% in the first quarter due to a pullback from Hispanic shoppers, according to the company.

Fast food chains Wingstop and El Polo Loco have also told investors that decreased Hispanic spending has hurt their businesses. Constellation Brands, who controls U.S. distribution for Modelo, Corona, and Pacifico, saw beer sales slide 1% last quarter, the first time they have fallen since the company acquired the rights to those brands back in 2013.

On the other side of the equation, Trump has ordered ICE to look into specific companies suspected of employing undocumented immigrants as they try to meet specific inspection quotas. That has put pressure on labor forces from meat processing plants in Nebraska to construction sites in Florida to Home Depots across California, which sparked a series of protests in LA. So Neil, businesses are getting squeezed on both sides here, losing customers and workers

as enforcement actions ramp up and president Trump acknowledged this yesterday in a pretty stunning admission. He posted this on truth social quote, our great farmers and people in the hotel and leisure business have been stating that our very aggressive policy on immigration is taking very good long time workers away from them with those jobs being almost impossible to replace. He vowed that changes are coming. So he says he's hearing from business leaders saying, uh,

our workforces aren't coming into work and they're very scared and they're just not, you know, our business plans are being thrown into disarray because of this immigration crackdown. And you can understand why they're complaining because undocumented immigrants make up a huge share of the workforce in certain industries. According to the Agriculture Department, more than 40% of laborers employed by agriculture in that particular industry are undocumented. Almost a quarter of construction workers lack

legal status. That's according to a 2021 survey. And it looks like this crackdown is only going to widen specifically at workplaces because Trump's borders are Tom Homan this week said you can expect more worksite enforcement than you've ever seen in the history of this nation. That kind of goes against what Trump was saying yesterday, where he's vowing changes to be a little more business friendly. So we'll see how those two work it out. Obviously, Trump is the president. So what he says goes. But

you can tell he's very much hearing that from the business community. Yeah. And you saw it in the jobs data last week. It showed that the U.S. workforce shrunk in May, partly because back-to-back declines in the number of foreign-born workers in the labor force. That was the first time that happened since 2020. On the flip side, we also talked about brands kind of losing Hispanics as a major purchasing market. Constellation Brands recently began conducting

conducting these monthly studies to get a pulse on Hispanic buyers. And 75% of consumers said that they were going to restaurants less frequently. It also showed that they were attending fewer social gatherings where beer was served. So that clearly ripples through all aspects of the economy because that is a big force when it comes to spending for specific brands like Constellation, like Coca-Cola and others.

Okay, well here's a sentence that will make a lot more sense in the coming minutes. A human-sized Labubu doll was sold at a Chinese auction house this week for $170,000, making it the most expensive toy of its kind in the world.

The four foot four tall mint greet figurine acquired for roughly the same price as an Aston Martin coupe reflects the frenzy around Labubu is the hottest name in the toy industry right now. Labubu's were conceived a decade ago by a Hong Kong artist who drew on Nordic mythology to create these little elf monsters with big pointy ears and mischievous grins. In 2019, the Chinese collectibles retailer Pop Mart announced

since day business opportunity and struck a deal to sell a line of these toys. Things were going perfectly fine, but growth went into hockey stick mode in 2023 when Pop Mart started selling Labubu plush toys on key rings because then they became a fashion accessory. And you know who loves fashion accessories? Celebrities. The K-pop star Lisa posted pictures of her Labubu to her over 100 million Instagram and TikTok followers,

which is followed by other celebrity posts from people like Rihanna, Dua Lipa, and David Beckham. And since all of us regular people want to be like them, sales have skyrocketed. Pop Mart's revenue more than doubled in 2024 to $1.8 billion, supercharged by La Boo Boo Madness.

Yeah, La Boo Boo Madness is in full force here, partly because it appeals to such a wide swath of people. You have kind of the fashion girlies who want to emulate the celebrities that they see on their Instagram feeds, but then you also just have a big collector's culture around them. A lot of

people do like these blind boxes where they just buy Labubu packs, essentially open them and see if they got any rare ones that mirrors, you know, sports card culture or Pokemon collectors. So you have collectors, you have fashion and you have just people who like cute and cuddly things, which I don't necessarily think that these Labubu dolls are that cute and cuddly. They kind of give me the heebie-jeebies a little bit, but it is that kind of ugly, cute aesthetic that is resonating with a lot of people in

And it is just wild. I mean, you go on Instagram right now, there's been 250,000 Instagram reels posted to this kind of little boo-boo lullaby of someone just saying the boo-boo over and over again. So it really has permeated all aspects of culture and it is just an absolute economic force right now.

It's their retail and distribution strategy that will be studied because, as you mentioned, they had these blind boxes. This is a really ingenious strategy where they send you you buy a pack that you don't know what's in it. You open it up and then you get a particular Labubu doll. That means if you don't like what you get, that means you want to buy more. And in general, it's tapped into this collectibles culture where one is not even close to enough. What is the start of your journey?

of buying these things and they also directly operate their retail retail stores so think like apple they control the entire experience around you going into this store they have 401 stores there's two here in new york city i checked maybe i'll have to visit there's one in flushing one in uh

One in Fidai. So I want to see like how they curate that store experience. And you're already starting to see comparisons to Sanrio, which is the Japanese company behind Hello Kitty. And we'll see it's already passed that company in market cap due to these insane sales figures by by Labubu. Yeah, we'll see if it's like a trend, a flash in the pan, or if it is kind of this continual trend.

social kind of force that is Hello Kitty that has just become one of the most iconic characters in history. Let's sprint to the finish with some final headlines. Breaking the internet. Yesterday afternoon, a Google cloud outage knocked out wide swaths of the internet, causing Gmail and Google Meet to go down while disrupting other services like Spotify, Discord, Snapchat, Character AI, and others, reminding us all that digital infrastructure can sometimes be as brittle as real-life infrastructure.

Shortly after 1.30 p.m. yesterday, Eastern Time, the outage reporting site DownDetector started to receive thousands of reports tied to various Google apps. It also affected downstream providers like Cloudflare, which kneecapped even more companies.

After hours of frustration and lots of memes about Google's IT department, services started to come back online. So even though the service disruption eventually did get resolved within hours, the fact that this happened at 1.30 p.m. in the afternoon during the middle of a Thursday disrupted work for millions of people across the country. And yeah, yeah, I don't want to hear it, Microsoft Teams users. What happens if down detector goes down? That's what everyone was saying. It's like...

very suspicious here that the website that reports outages never goes down themselves. I don't know what... They're like the generator of the internet. Yeah, it must be housed off-site somewhere. I actually would love a deep dive into Down Detector because it did not go down yesterday. It also, when these things happen, it makes you think about what...

apps and websites are the most important to you. Like if you had to go to a desert Island, you, you know, which, which are you taking with you? Spotify for me. I mean, when Spotify goes down, you can't listen to, we've become accustomed to listening to the world of music at our fingertips when Spotify goes down. I mean, that's tough, but also it's great when Google meet goes down because if you had, if

You know, a pretty intense 4 p.m. meeting yesterday. And you're like, well, I can't log on. I'm so sorry, boss. I literally finished my last meeting at 1.30 p.m. yesterday. So it was perfect timing for me. I had finished most of my prep as well. So I was kind of oblivious to it for a while before I started seeing all the memes pop up on social media.

Okay, finally, tomorrow is shaping up to be a very volatile split screen kind of day in the United States, exposing the country's deep divisions. In Washington, D.C., the government will hold a military parade, the first of its kind in decades, to celebrate the Army's 250th birthday.

The celebration was always planned, but President Trump wanted a blowout extravaganza. So there's going to be thousands of marching soldiers, tanks rolling down the streets and planes flying overhead in an event that's expected to cost up to $45 million. At the same time, Trump's critics around the country will hold demonstrations against his administration in more than 2,000 locations. They're calling no King's protests to push back on his authoritarian bent.

It's expected to be the biggest wave of demonstrations since his reelection. Yeah, it's definitely a very stark display of just the divisions in America right now because you are going to see a lot of imagery from both these events. June 14th is Flag Day. It's also the 250th anniversary of the U.S. Army's founding, and it's also Trump's 79th birthday. And he said that those three things are actually coincidences. He wanted to celebrate the

the military not necessarily his birthday but it is hard to look past that the fact that there is this big parade on at the president's birthday you mentioned the cost a little bit forty five million dollars up to sixteen million dollars of that cost is accounting for the price of repairing washington streets that are damaged by the super heavy tank so you might be seeing some road work following this parade as well because these tanks are big vehicles and these roads are not accustomed to carrying them and i mentioned that this is the first time that the u_s_ has

had a military parade since 1991, which was after Operation Desert Storm and the end of the Gulf War. Military parades have been a thing in a bunch of other countries. I mean, you think of Europe probably most of all, and that's where President Trump got the idea. It was in 2017, he went to a Bastille Day parade in France. They do that every year, and he's like, well, this is dope. Like, I want that in the United States. Other presidents have thought differently because it evokes to some people...

are enemies like the Soviet Union, China, North Korea, those kind of geopolitical rivals where they host these big military parades. That was especially relevant during the Cold War era

And Eisenhower, President Eisenhower, during the 1950s, his aides came to him and said, hey, the Soviets are doing this huge parade to show a force. Like, we should do that, too. He said, no, I don't want to be like them. And most presidents have kind of had a conflicting view of military parades since then. George H.W. Bush in 1991 said, no.

was convinced that there would be a parade, but most parades in the United States have happened after war victories like World War II or 1991, not to celebrate the birthday. So President Trump is going a little bit different direction. That is all the time we have. Thanks so much for starting your morning with us. Have a wonderful Friday and an even better weekend. If you have any thoughts on today's episode, send an email with questions, comments, or feedback to morningbrewdaily at morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer.

Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair and Makeup wants to wish all the MBD dads a happy Father's Day this Sunday since this is the last show before then. Devin Emery is our president and our show is a production of Morning Brew. Great show today, Neil. I wish you all well.