Jersey Mike's IPO Isn't About Sandwiches

We usually cover financial forecasts on this show. But turns out weather forecasts are now affecting the financial ones. Because weather apps drive our weekend spending… and they’re too-often wrong. Say hello to “Wet Bias”: a 50% chance of rain doesn't mean 1/2 the day it rains — it means there’s a 50% chance 1 spot in your region gets at least 0.01 inches of rain. But you cancel the tee time cause the weather app shows you 1 rainy emoji.

And today’s newsletter is brought to ya by our partner, LiquidIV - we fill the studio with it.

Gas is sitting at $4.10 a gallon, up 31% from a year ago but nowhere near the crazy prices expected… given the situation in Iran. Attacks on the Red Sea and Mediterranean Sea, with Egypt and Saudi Arabia now involved? How are oil prices so chill?

The reason isn't OPEC. It's China. The world's biggest oil importer (by far) is on an oil diet — China’s cut its daily oil imports 40% since the war began, from 13M barrels a day to 7M, by tapping its reserves, leaning on EVs, and renewable energy. Nobody expected that kind of agility from the world's largest oil buyer. It’s straight-up Oil Ozempic.

THE TAKEAWAY: China is the OPEC of oil demand… it’s “DOPEC”

OPEC is a 66-year-old cartel that controls oil prices by adjusting supply. But China just showed it can move the same needle by adjusting demand — call it DOPEC: OPEC but for Demand. It’s market-moving power the world didn’t realize was possible, and China has it. If Beijing ever wanted oil prices to spike, all it would have to do is start splurging again.

Jersey Mike's raised $1B Thursday in the 2nd biggest restaurant IPO in history. The offering was 10x oversubscribed. Not bad for a company that started with a $125K loan a 17-year-old named Peter Cancro got from his high school football coach.

• It costs just $515k to build a Jersey Mike’s location, on average. That’s ½ the cost of opening a Taco Bell or Burger King, 70% less than McD’s.

• The average franchise pays that investment back in less than 3 years with operating profits.

Jersey Mike’s looks like the classic Founder-to-PE-to-IPO playbook (recipe book?). But after Blackstone bought Jersey Mike’s in 2024, it didn’t just cut the private jet & cold cut costs. The PE owner pivoted the menu too, like by introducing the new Hot Italian Sub? With a 20% higher price it’s a profit puppy and already a top-seller.

• Jersey Mike’s mentioned the word “hot“ 16x in the IPO paperwork, but “cold” only 6x… because the hot subs are filled with margin.

THE TAKEAWAY: AI can't bake bread

It's the year of the AI IPO: SpaceX did it in June, Anthropic and OpenAI are circling. Yet investors put in 10x more orders than shares available for a sandwich chain? AI may or may not be a bubble, but we’re certain sandwiches aren’t. The stock actually fell 6% on day 1, but the $1B of fresh stock sold shows that Wall Street is hungry for Jersey Mike’s, even in this AI moment.

Four Winds Craft Guild, a nearly 100-year-old antique shop on Nantucket, sells $2K nautical brass sconces… and just added this hand-painted quarterboard sign: "No Influencers." The owner told the NYT he's tired of his store being someone's IG background. Influencers, he says, take photos but don't buy (guess he missed the “influence others to buy” definition).

Buuuuuut, 2 blocks away, Dairy Boy did the opposite. The cult-followed clothing brand, founded by influencer Paige Lorenze, put her own quarterboard up: "Everyone Welcome." Her argument: being anti-influencer is basically anti-female, since most influencers are women building businesses off the platform.

But now (the irony) both shops are getting more visitors than ever. And it’s set off a national debate about whether Influencers are cringe or cha-ching.

THE TAKEAWAY: This is The Barbra Streisand Effect… and it can be your asset.

Barbra Streisand tried to suppress a photo of her Malibu house in 2003, but her move backfired — the lawsuit brought attention to something nobody otherwise would have noticed. Nantucket's "No Influencers" sign just did the same thing.

If you've got a PR problem you want no one to notice, don't try to hide it (it will backfire). But if you’ve got a new product that wants attention, maybe you do try to (poorly) hide it. Either way, don’t forget about Barbs.

How do we stay hydrated while whipping up the pod? Or on the beach? Or on the beach when your co-host tosses you a charred log? We drink Liquid I.V. Check out how in our 1-take beach video here and reply with your notes.

See ya Monday, Yetis.