DoorDash Plans To Buy Instacart for $17B & Ahh!! Horror Bookstores Are Killing It

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Speaker B: hey, guys, it's Toby. Couldn't be here today because I'm at yet another wedding, but I come with an ask for you guys. Neil is running his first ever New York City Marathon, his first ever marathon this Sunday. And since I can't be there to support him because I'm at a wedding, I want you guys to make as many signs as possible. So when he is running, he feels the love from the MBD faithful. Um, I'm talking hundreds of thousands of signs if possible. So this is my call to you make Neil's first marathon special by making him a lot of signs. Thank you so much. And let's ride. And let's run.

Speaker C: Good morning, Brew Daily Show. I'm Neal Freyman.

Speaker A: And I'm Olivia Lake.

Speaker C: Today, the sudden collapse that's sending shockwaves across big law

Speaker A: and horror bookshops are the new hot hangout. It's Friday, October 30th. Let's ride.

Speaker C: Happy Friday. Today, associate producer Olivia Lake is stepping into the copilot seat, subbing in for Toby, who, I promise you this is not a joke. Is back upstate for another wedding Halloween weekend. Wedding fun or diabolical? Not quite sure. Anyway, Liv, what are you being for Halloween?

Speaker A: Well, it is kind of an inside joke on our team that I resemble Erling Holland a little bit. Um, so I think I'm going to go as him. I think it makes sense for this year.

Speaker C: Yeah, he's the. He's the soccer player who, who went viral, uh, in the World Cup. I'm not going to be anybody. Thanks for asking. Uh, I'm taking it low key this weekend because on Sunday I'm running the New York City Marathon. So I guess I'm going as a marathon runner. If you happen to be in the New York City area and want to come out and show your support on Sunday, uh, I would appreciate it because I was thinking about this. I have never done something that I can remember that I am so uncertain about. Like, I have no idea how this is going to go. Toby is. Is a runner who's done many marathons. I am mildly athletic, but not a runner at all. So we're going to see what happens. I haven't really talked about it at all because I don't know what's going to happen. But if I do okay, then on Monday I probably will dedicate the whole show. But yeah, if you are in the area, your support would mean the world.

Speaker A: Yeah, I'm definitely coming out and I'm stealing one of those fatheads from the office of your face. And now a word from our sponsor, Liberty Mutual. Neil, guess who was in my dream last night.

Speaker C: Uh, me.

Speaker A: Nope. Even better. I'll give you a hint. It rhymes with Liberty.

Speaker C: Liberty Biberty.

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Speaker C: Oh, I know that feeling. Like when Liberty Mutual customizes your car and home insurance to save you money.

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Speaker A: DoorDash already delivers your dinner, and now it's buying the company that delivers the groceries to cook it. DoorDash is acquiring Instacart for $17 billion, the companies announced Thursday. The pitch is a bigger shopping network. Instacart users will get access to roughly 50,000 more stores on top of the nearly 100,000 already on the platform. And people with both Instacart plus and DashPass will only pay for one membership instead of two. It also makes the biggest player even bigger. Bloomberg data shows DoorDash handled about 2/3 of U.S. food delivery volume in 2024. Investors seem to like the move, with DoorDash shares up more than 9% in premarket trading, despite the stock falling about a third over the past year on rising costs. Instacart, meanwhile, has been stuck. Its stock has barely moved in two years since Amazon and Walmart cut into its business. The savings from combining the companies would likely come from trimming corporate staff and splitting expenses. But it's not clear if it would be enough to ease customers worries who are already compl about delivery prices. Neal Whether you're ordering the whole meal or just the ingredients, DoorDash is now hoping you'll pay them either way.

Speaker C: The big question is, will this deal go through? Because this is the largest grocery delivery app in Instacart, and it's the largest restaurant takeout or delivery, uh, app as well in DoorDash, we're already seeing some backlash. Zoran Mamdani, the mayor of New York City posted this tweet or post on saying just last month, DoorDash can seem to find the money to pay their delivery does until our administration forced them to give back $131 million in stolen wages and penalties. This week, they've managed to find 17 billion to acquire one of their main competitors. Corporate consolidation means higher prices, harsher exploitation, and greater economic inequality for New Yorkers. We've stood up to these giants before. That doesn't stop now. And he's referencing a recent settlement paid by DoorDash. It was $131.5 million after it underpaid or failed to pay over 260,000 delivery workers. He can get on ex and post about this. I don't know how much power the, uh, the New York City mayor has over a big corporate deal that will probably lay in the federal administration. The Trump administration has been far more lenient in allowing takeovers and mergers than the Biden era. And that's why I think DoorDash and Instacart are trying to do this now, because they're looking at the calendar. We've got the midterms coming up, and then in two years, there might be, you know, a change in administration. So they want to get this through while they think they can in terms of an antitrust challenge.

Speaker A: Yeah. And this deal has actually been a long time coming. The Wall Street Journal reported that Instacart's founder approached DoorDash about a merger in the summer of 2021. And they also went to Uber as well. And neither companies bit. Um, and Instacart's pandemic boom was already kind of fading by then. But at that time, Instacart was valued at about $39 billion, and the rivals weren't interested at that price. And so now DoorDash is buying it for 17 billion. So that's less than half of the old version.

Speaker C: Yeah. It reminds me of playing Pokemon, uh, on my Game Boy, because when you would go to get a Pokemon, right, you would battle it and then wound it and then capture it. And that's exactly what DoorDash is doing with Instacart. DoorDash has been expanding. It's not just a restaurant delivery platform anymore. They've expanded into retail. You can get stuff from Macy's and Costco. And they've done this big push also into grocery. And when they said they were going to go into grocery, Instacart's value plummeted. And so you said they probably didn't like a price of $39 billion, but that fell ultimately to 14 billion, part because of what Doordash was doing. And everybody's expanding into grocery delivery because this, this area, it's a very tough economics business. Right. Like restaurant takeout and delivery. Very low margins. And we already seen DoorDash got a lot of pressure on its stock price because of that. But grocery delivery, I mean, you're ordering 50, $150 a pop. It's much more profitable. So that's why Doordash was moving into this space that was spooking instacart investors to begin with, and then now it got it at a much cheaper price. So, yeah, if you want to make the metaphor about how it acquired a Pokemon, I guess it's trying to catch them all.

Speaker A: Yeah. And I mean, it's, it's maybe a more profitable, uh, business model, grocery, uh, ordering, but it's, it's kind of tough to get right. Uh, Tony Shu, the Chief Executor of DoorDash, he said grocery is one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you choose for yourself, and get the ice cream to you before it melts. So they're kind of hoping that this merger will use the resources that Doordash has and just make that experience better. But I've ordered groceries a couple times when I'm deathly sick and I just cannot move. And it's tough. Like when you order dinner online, you know, you're just gonna get whatever the restaurant cooks for you. But if you are ordering produce or whatever, that's something you kind of wanna feel or smell or see yourself. And it's a lot of work to put in every single replacement that you would want and hope that they get it right and hope that the things don't melt while they come to you. So we'll see if this merger kind of makes grocery ordering better as a whole.

Speaker C: Yeah, that's why I think Doordash is not doing it on its own. It tried. And he's like, it's really hard. So why don't we just buy the company that's already doing it pretty good already? Moving on, the US Economy received its report card for the third quarter, and by golly, it looks like mine. The one semester I tried at school. Straight A's gross domestic product, the value of all the goods and services produced in the United States, surged 3.4% last quarter, crushing pretty much everyone's expectations. It shows that economic growth is only accelerating. In Q1, growth was 2.5% in the second quarter, 2.2%. And now we're putting up 3.4%, the biggest jump in a year. I'm handing out two game balls, one to AI and the other two, consumer spending, which both put the team on their back last quarter. Whether you prove or not, the data center buildout is juicing the economy. Thanks to companies shelling out for components and hiring construction workers. Business Investment rose nearly 13%, the biggest pop since 2020, and equipment spending surged 21%. The other bright spot was shopping. Despite a rebound in inflation, the war in Iran and gloomy sentiment, regular Americans continued to add things to their car and then throw in another for good measure. Consumer spending rose a robust 3.8%, led by purchases on hotels, restaurants and health care. Liv, I know people may not be feeling it in their lives and we can talk about why that is, but on paper this is a rip roaring economy that's only growing faster.

Speaker A: Yeah. And we should talk about how that spending is still going strong when overall we kind of feel the vibe that everything's too expensive and people are worried about prices. But spending is still so strong. The University of Michigan's consumer sentiment index just hit its second lowest reading on record this month. And ING also points out that real household incomes are barely growing in a low, higher, low fire economy. So why is that spending still so strong? Basically it's because most of the spending is coming from higher income income households. The CNN cites Fed data showing the top 20% of households account for about 40% of all spending. So it's that thing we've talked about multiple times. It's a K shaped economy. The people, you know, closer to the top are really putting all of that consumer spending on their back.

Speaker C: Yeah, I mean I just looking at a lot of the earnings reports from more consumer companies the past couple of weeks earnings season has just started. Royal Caribbean posted rising profits. People are paying for vacations and cruises if they're not getting stranded in Cambodia. Airlines said this too. We know that airline prices have been skyrocketing, but to a T they're all saying, yeah, people are still flying. Even Chipotle and Starbucks, two consumer companies that have really been in the dumps the past few years, reported strong results and their turnarounds are gaining pace. So even while inflation is eating at people's paychecks and we should say the average real income income for Americans is negative for six straight months, that means inflation is outstripping wage gains. People are still spending and maybe that's where we see these two factors that are driving economic growth come into one, because what's happening is AI is driving up stock prices. Not if you look at the stock market this morning, actually, everything is kind of collapsing. But over the past year and two years, if you have money in the stock market, you're doing really well, and you're feeling flush because all these AI names have been going ballistic, and that in turn makes you more confident to spend. So maybe these two things do have something in common. But I think the bottom line here is, as we approach the midterms, is that while people aren't feeling it, uh, at least on paper, this US Economy is. Is one of its strongest. It's been at least in a year, if not even longer. Now it's time for stock of the week, Dog of the Week, where Liv and I pick one stock that got tricked and another that's a treat. I won the pre show mummy rap race, so I get to go first. And my dog of the week is Big Law, which is reeling after the shocking collapse of one of its leading lights this week. Weil, Gotchell, and Manj, the most prominent and celebrated firms on Wall street, said it was going to shut down its operations in a move that left Jaws on the floor at every legal office across the country. Because by all accounts, while Gotcha was doing perfectly fine financially, you could even say strong. It has no debt, few liabilities, and is the 15th most profitable firm in the United States. This is not a business you would typically associate with on the brink of going bust, especially with its pedigree. While Gotcha led the restructurings of some of the biggest bankruptcies in history, like Lehman Brothers, Enron, and General Motors. But law firms, they're not like other businesses, relying disproportionately on their partners, the human talent to drive sales. And that talent was jumping ship. Since mid September, almost two dozen partners got poached by bigger rivals, creating an accelerating downward spiral that spurred others to snag the last lifeboat off the Titanic. Other issues surfaced, too, like a bungled succession plan to replace the top leader and a failed merger whose purpose was to bulk up and stem the bleeding was really freaking out the legal world is that while Gotcha could be a canary in the coal mine for an impending wave of collapses, if one of the most profitable legendary firms can get eaten by bigger predators, who else stands a chance?

Speaker A: Yeah, there was a Bloomberg opinion piece, um, that argued that Wild's collapse kind of shows overall how the law industry and law firms now work a lot like Banks, in the sense that they have these huge paychecks and destabilizing runs, top partners, they can make as much as $40 million a year. And that's kind of created a market where everyone's chasing the same few big stars. A legal recruiter told Bloomberg that, uh, the elite firms serving private equity may actually be more vulnerable now, because the more rainmakers you have with clients who will follow them if they leave, the more risk that is concentrated in just a few people. And so a couple of, if a couple of them leave, it can snowball into this run on the partnership. Even when the business underneath is strong and profitable, if you lose that human talent, like you said, the business can itself collapse.

Speaker C: Yeah, everyone's basically. Or at least if you are at the top echelon of this, you are a mercenary. And you're probably getting calls all the time saying, here's a $20 million paycheck. Do you want to leave? And you're like, well, nothing's keeping me here. Exactly. They don't have non competes in, in this world like they do in other industries. And there is a little bit of irony about. While not, uh, on the verge of filing for bankruptcy and going belly up, because that was where it cut it. See, that was what it was known for. In 2008 and 2009, this business was going gangbusters with all the companies going bankrupt. Lehman Brothers, General Motors, Macy's was another one where it worked on. But then after the financial crisis, where it did so well, it kind of rested on its laurels. So while the other, uh, law firms, the bigger ones, got even bigger and reinvested those profits, the big comp here is Kirkland and Ellis, which is a huge law firm that has been also poaching a lot of its talent. So while's revenue grew from a little over $1 billion in 2015 to just over $2 billion this year. Meanwhile, Kirkland and Ellis's revenue went from $2 billion in 2015 to over $10 billion this year. So that's what's really spooking the legal world here. The people who work for the tier of law firms I.e. weill Gotchul is that there's Latham and Watkins, there's Kirkland, Ellis. These are the bigger law firms. They are becoming good at everything. They can hand out these lavish paychecks, and they might send your firm into collapse. If they call up the partners and you get this run on the partnership, that's very similar to a run on a bank.

Speaker A: Yeah. And you kind of mentioned it really quickly. The non compete agreements that that's a thing in other industries here in America, but in in the law industry in the UK they have non compete agreements. In the US they don't. So if a partner gets a better offer somewhere they can leave and they can take their whole team and the clients with them. So I mean even Weil's own co managing partner told the Financial Times that he doesn't think job hopping is healthy. But Bloomberg, uh, says that it's hard to resist it if everyone's kind of doing it. Up Next, why Horror Bookshops Are Absolutely Killing it

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Speaker A: My stock of the week is Horror Bookshops, because business for them is absolutely Boo Ming, did I get you? Um. Fewer Americans are picking up a book for fun these days, but horror is the exception. According to Circana Bookscan, horror book sales are up roughly a third this year through August, and the genre now sells more than twice as many copies as it did in 2020. Shops built around it are opening up across the country with new ones in Washington state, Virginia and Kansas since August, and another plan for Denver by the end of the year. There are hangouts as much as stores with cult horror, VHS tapes in the windows, book clubs, author readings, and themed drinks. Like a killer lumberjack, Lat owners told the New York Times, a big draw is community, especially for women. Lauren Comer, who runs the Twisted Spine in Brooklyn, thinks readers like having a safe way to face how scary the real world can feel. Not only are the customers happy, but Comer says her bookkeepers are thrilled about all the business. Neil Turns out people love the wholesome vibe of community mixed with sheer terror.

Speaker C: Yeah, my horror broke journey began and ended with Goosebumps Shadow, R.L. stein, but that freaked me out. I still think about the one book where there was a point plant in the basement and it grew and maybe ate everybody. But I still think about that even when I read it when I was five. So I will not be visiting this, even though actually I might, because it does sound interesting just to see what's going on there. The Twisted Spine is right down the street for me in Williamsburg. And I think you, you nailed it. Like, this is not just a bookstore. Especially these niche bookstores like horror, like romance, they just are third places. People are looking for third places outside of the office, outside of their home to meet other like minded people. They have events, they have movie screenings, they have discussion clubs. There is a cafe typically. So these are places where you can find your community. And I think that's a huge reason for their success. And also they just have awesome names. Right? Like the Twisted Spine is in Williamsburg, but you got the inked page in Overland Park, Kansas that came online. The Infernal Annex in Olympia, Washington. The cursed page in Sturbridge, Mass. Parallel Universe in Cleveland. So there's just a whole aura around these things and they're absolutely crushing it right now.

Speaker A: Yeah. And horror as a genre in general is thriving across mediums. We saw that with obsession and backrooms. The horror movie genre is, is great. And then also these like, Fright Night, you know, experiences are doing well too. So it makes sense that now it's, it's going into that bookstore realm. Um, but it is interesting about who shops there and who the, the shop thought would be their customers versus who actually is their customers. Many owners, um, said that they, they kind of expected it to be goth people or, or people who are into more dark things or present that way. And a lot of people are saying it's, it's, it's a lot of women It's a lot of just, like, regular people you wouldn't expect. I mean, one of the shop owners, uh, he said that when the store opened, there were a lot of closeted horror friends that had no outlets. And he assumed that his customers would be young men, maybe goths, but it actually was m. Mainly young women who are coming to shop. So it's interesting to see how the genre kind of appeals to, uh, a larger audience. And again, we're seeing that in movies as well as books,

Speaker C: and we're just seeing the rise of overall, like, niche bookstores. So we're seeing horror boom. And also the other twin genre that's also doing really well in terms of fiction sales is romance. Over the last two years, we went from having two dedicated romance bookstores in the United States. Now there are 20, and you can be sure there are more. So this is a pretty cool slice of an independent book sector that's just. That's doing really well right now. Last year, over 600 new independent bookshops open across the United States, which is an 87% increase year over year, some of which were horror. Let's sprint to the finish with some final headlines. Well, this is a wild story developing overnight. The largest crypto heist in history. Binance, the world's largest crypto Exchange, said that $6.3 billion worth of funds were affected, and it had suspended all withdrawals. As it works to clean up the mess, Binance founder Changpeng Zhao said that all user funds are safe and the company will cover all losses. We have a pretty good sense of who was behind the heist. North Korea cybersecurity research firms said they had a high degree of confidence that the country's elite hacking unit, Trader Trader, was the culprit. A group that has pulled off some of the other major crypto heists in recent years. The details of this hack are still coming out, but one thing's clear. This is another embarrassing setback for a crypto industry that is still trying to appeal to the mainstream.

Speaker A: Yeah, Binance's initial investigation suggests that the security incident may involve a compromised engineer's laptop, which allowed an attacker to gain access to a service container and submit unauthorized withdrawal transactions. So that's just a friendly reminder to everyone out there to do your phishing training, because you do not want to be that engineer who. Whose laptop got compromised.

Speaker C: Right. Because this is not just the largest crypto heist in history. This is being called the largest bank heist in human history. $6.3 billion stolen from Binance.

Speaker A: Up next, a new Dune movie is coming out, which means it's the return of the weird looking popcorn buckets. According to Variety, AMC just unveiled two collectible buckets for Dune Part 3. One is a Sandworm thumper with a working version of the device the Fremen used to lure sandworms out of the sand. The other is a double sandworm with two worms on it, which AMC says makes the popcorn easier to share. It's a big sequel to a bucket that went viral in 2024 for looking, well, suggestive and ended up in a Saturday Night Live sketch. Prices haven't been announced, but The Dune Part 2 bucket cost 2499 plus tax and per variety sold a lot more on resale sites. This is a serious business for AMC. Variety reports that CEO Adam Aaron projects more than $100 million this year from themed buckets. A lineup that included a Trojan horse for the Odyssey and a sperm whale for Whale Fall. Neil, are you more of a thumper or a double sandworm guy?

Speaker C: Well, I order everything family style. That's what I prefer. So I think I got to with. What is it called? The Double Sandworm. They have to know what they're doing, right? With this, the way this looks. I mean, they denied it the first time, but if you've seen a picture of this, they're like, you can't have put this out to the world and not knowing what kind of jokes people are going to make. But yeah, it's a huge business and pretty much every movie now comes with its own collectible collection as part of it because that's just a huge moneymaker on top of the box office receipts. And a 24 just yesterday. I don't know if it was a, uh, coincidence or not, but they also released their own popcorn bucket. If you buy a ticket on their website too, you can see everything, which is the Nathan Fielder documentary, uh, about Elizabeth Holmes. And this is not suggestive at all. It's literally just like a clear bucket. And it just ties into the. The whole theme of the movie or the title, which is you can see everything. Man, I'm excited for Doom Part three, though. I mean, I think that's going to be a massive movie. I still haven't seen Do Part 2. Toby is a big dune head, but I have seen Dune 1 and it was incredible. So I'm kind of holding out to see if they're Gonna put Dune 2 in theaters because it's one of those movies you have to kind of see on the big screen. But if not, I will watch it at home, and then I will absolutely going be going to the theaters for Dune Part 3. Whether that's with a double thumper or a double sandworm or whatever it is, I'll probably get it. All right. Finally, my alma mater, the University of Maryland, isn't having the best football season, losing five consecutive games and experien major attendance issues. So they're getting a little creative to keep students in the stands this weekend for tomorrow's home game against Illinois. The school said that students who stay until the fourth quarter will be entered into a drawing to win free tuition for the spring 2027 semester. The award is capped at the equivalent of in state tuition, but that still comes to $5,500 live. Personally, I think this is a sad state of affairs for my school, but would the chance at free tuition convince you to spend your Saturday afternoon watching a miserable college football team?

Speaker A: Absolutely. College is so expensive these days. If I could, like, bring my knitting or a book, I would just sit in those stands and ride it out. Um, I do feel bad for the players, though. I feel like this is like when your mom tells your siblings that they'll get, like, extra dessert if they come watch your talent show. Like, I can't imagine being the player, being like, the only reason these people are watching me is because they got bribed. Yeah.

Speaker C: Yeah, it is. It is a little sad. I sent this to all my friends and being like, look how low we've come. But, you know, hey, you got to get creative when people are leaving. I left in halftime a lot of the times because it wasn't an amazing product to watch, even though if there was the promise of $5,500, probably would stay because it's a Saturday afternoon and it's probably going to be a nice fall day down in College Park. So I hope this works. And the Terps, uh, the Terps fans show up and we get a win because. Yeah, yeah, it's not going well. All right. 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. To share your thoughts on the episode or anything else, send an email to Morning Brew daily at Morning Broadcom or DM us on Instagram @MB Daily Show. Let's roll the credits. Emily Millarn is our supervising producer. Raymond Liu is our senior producer. Our producer is Olivia Graham, and our associate producer and co host is Olivia Lake. Technical direction by Nina Miller. Hair maker is looking forward to an extra hour of sleep this weekend, and Our show is a production of Morning Brew.

Speaker A: Great show today Neil. Have a great weekend.

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