Uber Goes Back to Basics and Dick’s Foot Locker Merger Approved

Summary

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Brew Markets — August 28, 2025

Episode: Uber Goes Back to Basics and Dick’s Foot Locker Merger Approved
Host: Ann Berry
Summary By: Podcast Summarizer

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Episode Overview

Ann Berry and the Brew Markets team unpack two major financial stories: Uber's pivot towards discount retail delivery and the regulatory approval of Dick’s Sporting Goods' acquisition of Foot Locker. They break down the business strategies, market implications, and regulatory scrutiny involved in both stories, while also demystifying the buzz around activist hedge funds and recapping key market moves.

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Key Discussion Points

1. Uber’s Discount Retail Pivot

[00:02–03:39]

• Uber’s Growth & the Shift to Discount Retail
  • Ann describes Uber's global reach and recent tech advancements, such as partnering with Waymo for autonomous rides in select US cities.
  • Despite geographic and technological expansions, Uber announces partnerships with Dollar Tree (9,000 stores), Dollar General (14,000 stores), and Family Dollar to deliver everyday items.
• Strategic Rationale
  • Urban ride-share markets are increasingly saturated and competitive due to players like Lyft and DoorDash, while autonomous revenue is still years away.
  • Uber sees big opportunity in rural and less-dense markets, where dollar stores thrive as essential retailers for value-conscious shoppers of all income levels.
  • "Delivery. There it is. Self driving options are going to take a while to drive Uber's real revenue streams. Pun intended." — Ann Berry (02:26)
  • These partnerships help Uber grow order volume and bring business to dollar stores without requiring them to invest in costly store renovations to compete with e-commerce giants like Amazon.
• Market Performance
  • Uber’s stock is up over 50% year-to-date.
  • Dollar Tree and Dollar General have also seen strong YTD performance, although recent concerns about tariffs have caused declines.

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2. Dick’s Sporting Goods & Foot Locker Merger: Approval and Debate

[04:12–11:39]

• Earnings Snapshot

  • Foot Locker: Shares down after weak quarterly results.
  • Dick’s: Shares up on earnings beat and positive guidance.

• Merger Details

  • Dick's to acquire Foot Locker for $2.4 billion ($24/share, ~90% premium).
  • Foot Locker to operate as a standalone unit post-merger.
  • Combined company: ~15% of US sporting goods market, over 3,200 stores across North America, Europe, Asia, and Australia.

• Regulatory Review: Antitrust Concerns

  • The Federal Trade Commission (FTC) examined whether the deal would reduce competition or raise prices for consumers.
    • "They’re committed to preventing mergers and acquisitions that are 'likely to reduce competition and lead to higher prices… lower quality goods or services or less innovation.'" — Ann Berry quoting FTC guidance (05:33)
  • Companies attempt to define the market as broadly as possible to minimize perceived market share and ease regulatory concerns.

• Senator Elizabeth Warren’s Letter

  • Warren urged the FTC to scrutinize potential market impacts, including job losses and price hikes for families.
    • "The combination of Dick's Sporting Goods and Foot Locker would decrease competition in the retail athletic footwear markets, cut jobs, raise prices, and leave Americans to foot the bill." — Quoting Sen. Warren’s letter (07:38)
  • Cites data: Between 2017–2022, 25% of US shoe stores closed, eliminating over 25,000 jobs. References failed mergers (Choice Hotels–Wyndham, Kroger–Albertsons) impacted by similar antitrust issues.

• Strategic Impacts

  • Nike sells about one-third of its products through Dick’s and Foot Locker; the new company could have greater bargaining power with manufacturers, potentially disadvantaging independent retailers.
    • "The new giant... would have significantly increased power to extract favorable conditions with manufacturers." — Quoting Sen. Warren (09:06)
  • Nike responded by resuming sales on Amazon, potentially to counterbalance consolidation risk.

• Shareholder Dynamics

  • Foot Locker shareholders strongly favored the deal due to the attractive buyout price (90% premium).
  • Dick’s shareholders were more cautious, as acquiring a struggling company introduces risk.
    • "If you've been lucky enough, smart enough to be a Footlocker shareholder, this acquisition delivers value to you of a 90 premium... Dick’s shareholders, on the other hand... must be wondering why, given the risk of absorbing a struggling Footlocker..." — Ann Berry (10:33)

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3. Activist Hedge Funds Explained

[11:39–14:53]

• Listener Question: “What are activist hedge funds?”
• Definition & Role
  • Activist hedge funds are investors who buy significant stakes in companies to push for changes aimed at boosting the stock price.
    • "An activist hedge fund is part investor, part agitator, and sometimes part corporate matchmaker." — Ann Berry (11:50)
  • Tactics: calling for cost cuts, asset sales/acquisitions, board shakeups, or executive replacement.
• Recent Examples
  • Cineplex: Activist Wynwood Management pushed for divestment to buy back stock.
  • Medtronic: Elliott Management guided strategic and operating changes by securing board seats.
• Market Impact
  • Activist campaigns can drive short-term stock gains, but their long-term effects are debated.
    • “They add a little bit of spice, a little bit of drama to the market.” — Ann Berry (11:50)
  • Activists influence both through direct boardroom negotiations and public media campaigns.
    • “A well-known activist and those with strong reputations can shake things up even if they own relatively small stakes, like under 5%.” — Ann Berry (14:26)
• Relevance to Investors
  • These campaigns matter because they can shift companies’ fortunes, sometimes creating sudden volatility and opportunity in stock prices.

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4. Market Close Recap & Economic Outlook

[15:00–16:48]

• Market Moves
  • S&P 500 reached an all-time high of 6,500 (+0.33%)
  • Dow (+0.1%), NASDAQ (+0.5%)
• Headline Stocks
  • Nvidia: Slight dip despite strong earnings and raised guidance.
    • “The market just wanting more… moving the goalpost for Nvidia.” — Ann Berry (15:51)
  • Tesla: Down 1% on news of a 40% drop in European sales YoY; rival BYD up 225%.
• Macro Data Watch
  • US Q2 GDP came in at 3.3%, stronger than estimated.
  • Eyes on the Fed’s favorite inflation indicator (core PCE) for clues about a possible September rate cut.

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Notable Quotes & Timestamps

• On Uber’s delivery pivot:

  • “Delivery. There it is. Self driving options are going to take a while to drive Uber's real revenue streams. Pun intended.” — Ann Berry [02:26]

• On FTC’s merger review mandate:

  • “…committed to preventing mergers and acquisitions that are 'likely to reduce competition and lead to higher prices… lower quality goods or services or less innovation.'” — Ann Berry quoting FTC [05:33]

• On the risk to families:

  • “The combination of Dick's Sporting Goods and Foot Locker would decrease competition in the retail athletic footwear markets, cut jobs, raise prices, and leave Americans to foot the bill.” — Senator Warren [07:38]

• On activist hedge funds:

  • “An activist hedge fund is part investor, part agitator, and sometimes part corporate matchmaker.” — Ann Berry [11:50]
  • “They add a little bit of spice, a little bit of drama to the market.” — Ann Berry [11:50]

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Important Timestamps

• 00:02–03:39 — Uber’s discount store partnerships & delivery strategy
• 04:12–11:39 — Dick’s–Foot Locker merger explained and analyzed
• 11:39–14:53 — Activist hedge funds demystified, with recent examples
• 15:00–16:48 — Market recap: S&P 500 hits record, Nvidia, Tesla movement, economic data outlook

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Conclusion

This Brew Markets Daily episode delivers sharp, accessible insights into major shifts shaping the retail, rideshare, and investment landscapes. Ann Berry’s expertise and the team’s engaging back-and-forth make complex regulatory and market dynamics clear, spotlighting practical lessons for both retail investors and industry observers.

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Transcript

[A]

Senator Warren is dicks. What's next in athletic gear? Activist hedge funds. We demystify the money and dollars. Tree general and family. Uber goes all in on discount stores for Thursday, August 28th. It's Brew Markets Daily and I'm Ann Berry. More market details to come. But first let's talk about ride hailing. I feel like I've used every service personally that is out there over these past 12 months. Lyft in the United States, Uber absolutely everywhere. Bolt in France, get in London, Careem in Dubai, the list goes on. And for Brew Markets. So here at work, I've been watching the pattern of public rideshare companies going global. Earlier this week I got to meet the Lyft CEO to talk about that business buying FreeNow to grow in Europe. There's also the promise of autonomous rides. So the technology here is booming. And the team here in studio. Well, we were just saying that we. But we've spotted Waymo self driving cars lurking around New York. Uber has partnered with Waymo to offer driverless rides to app users in Austin and Atlanta. With more markets to come and the biggest ride share player in the United States is actually doing pretty well overall. Uber's share price up over 50% year to date. So that sets the stage. With all the glamorous growth options available to it geographies technology, why is Uber going back to basics? Let's literally, because today the company announced a new partnership with US Retailer Dollar Tree, letting Uber customers get everyday items from party supplies to cosmetics delivered to them from one of 9,000 Dollar Tree stores. Now, this comes just three weeks after Uber announced an almost identical partnership with Dollar General Corporation's 14,000 locations. And then in May, yep, same again, this time with Family Dollar. So why would Uber, once the poster child for bougie, black car, luxury service in Uber and urban centers, partner with dollar stores? Well, Uber CEO Dara Khosrowshahi gave us a clue back in the Q1 results this spring. Let's hear what he had to say.

[B]

We're expanding into new markets, both geographically, but into less dense markets. And there's a whole portfolio of newer products that continue to grow faster than the core, so to speak, that have substantial runways ahead of them in terms of frequency in the less dense. As you know, our less dense initiative really started with delivery.

[A]

Delivery. There it is. Self driving options are going to take a while to drive Uber's real revenue streams. Pun intended. Urban markets are maturing, getting more competitive thanks to Lyft and rideshare and doordash and delivery. So Uber is looking to grow into rural areas and that's where the dollar stores are now. Consumers are looking to shop more at value retailers. We've heard all about that this earnings season, so they make sense as distribution partners with Uber. Uber Eats Dollar General's report out today highlights that shoppers across income levels are trading down. So both win. Uber needs the traffic and the dollar stores need to grow sales and fight off Amazon, but don't want to dump money into expensive shop refits to do that. Well, the value retailers have had a good run so far this year. Dollar Tree and Dollar General stocks up around 50% year to date, but they have been ticking down this week on concerns about hits from tariffs. So lots of this partnership for both Uber and for the discount retail sector. Lots more to come from Uber Technologies. We're going to keep watching this one, but first, if you want to take a drive through investing, check out public.com Brew Markets Daily is sponsored by Public, the investing platform for those who take it seriously. Before the show today, our producer John mentioned a feature he recently found on Public.

[C]

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[A]

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[C]

BrewMarkets paid for by Public Investing. Full disclosures and podcast Description so this.

[A]

Week, John, we got quarterly earnings reports from Footlocker and Dick's Sporting Goods. Footlocker shares dropped on weak results. We're going to come back to that. While Dick's actually beat expectations and raised full year guidance, continuing a trend of doing pretty well thanks to growth in both the number of customer purchase and the size of those tickets. But the news that the market was really waiting for finally arrived. And that was confirmation that the two sneaker retailers are allowed to join forces. Now, Dick's acquisition of Footlocker was approved by both shareholders and by federal regulators. But that approval wasn't a foregone conclusion and we're going to unpack why. First off though, John, remind us of the background. Give us the detail on the deal.

[C]

Sure. Well, back in May, Dick's announced its intention to buy footlocker for $2.4 billion at $24 a share. And that represents a nearly 90% premium at foot Locker share price. Dick's expects to run Foot Locker as a standalone business unit. So keeping the Foot Locker brand right, ending up with a combined company with over 850 Dick's locations in the United States and Foot Locker's 2400 retail stores in across North America, Europe, Asia and Australia. And here's the punchline, Ann. The combined entity would reportedly control more than 15% of the US sporting goods market. That's a lot of sneakers. And so, Ann, was the deal ever at risk of not being approved?

[A]

So I love, I love nerding out on deals because it gives the chance to cover a ton of ground. And there's two kinds of approval embedded in this conversation that I have my eye on. So let's start with approval from the regulators. Now, when these kinds of mergers and acquisitions are proposed, the federal trade, so that's a regulator, investigates market dynamics to suss out if the proposed deal will harm consumers. And I'm going to be really specific about what that means. If you go to the FTC website, they tell you that they're committed to preventing mergers and acquisitions that are, quote, likely to reduce competition and lead to higher prices. I've got the print out here. Lower quality goods or services or less innovation are risks that they're looking out for when this kind of consolidation happens. And when necessary, the FTC may take formal legal action to stop a merger or sometimes to put conditions around it so that it can go ahead if certain adjustments are made to the deal. So just to go back in time, I started my career out as a merger banker. I started out right out of college working on these kinds of deals. And so I've seen firsthand the amount of work that goes into companies when they're coming together, when they know they're going to be reviewed by the Federal Trade Commission. They do a ton of work defining, defining what the market means because they want to prove that they're not going to end up dominating a big chunk, chunk of it, right? So if I were to be working on this deal on sporting goods, and I'm not, but if I were to be, I'd be trying to look at the market saying, should we define it as sporting goods sold only in physical stores? Do we count E commerce? Do we count sales of athletic goods and sports clubs, for example? Trying to get the whole thing to be as big of a market as possible, and then how do you define sporting goods? Is it just sneakers? Is it golf equipment? Is it baseball and tennis gear? And then you're suddenly talking about a really big market and ultimately getting less share as a result.

[C]

And then part of this review process. Earlier this month, Massachusetts Senator Elizabeth Warren sent a letter to the FTC urging the chair to closely scrutinize the acquisition of Footlocker and to block the deal if it violates antitrust laws.

[A]

Right. So we actually got a hold of this letter, folks. I've got it a printout right here in front of me. And she, she doesn't say, she doesn't opine on whether this violates laws. Right. That's very specific. But she does lay out an argument that she's concerned that there might be consequences of this deal that could impact families. And I going to read out a couple of the things that her letter says. She says, quote, the combination of Dick's Sporting Goods and Foot Locker would decrease competition in the retail athletic footwear markets, cut jobs, raise prices, and leave Americans to foot the bill. This is particularly concerning, she says, given that more than half of parents plan to sacrifice necessities such as groceries because of rising prices for back to school shopping, including sneakers. So she's really focused on what this deal means for the cost of living for families.

[C]

And Anne, this is the first time I've ever seen a letter like this. I'm sure they're common, but I haven't done this type of looking into it. And I was struck by how exhaustive the research is. I was reading through that letter. There's dozens of citations from Bloomberg News and the New York Times. Census reports all this data. Here's an example of a stat in there. From 2017 to 2022, one out of every four shoe stores across the United States closed. The result was a loss of more than 25,000 jobs. And so she even cites other deals that have been nixed after antitrust scrutiny, like Choice Hotels taking over Wyndham. That one didn't happen. And the proposed merger of Kroger and Albertsons grocery chains also didn't happen.

[A]

Right. It's not a given that these deals get done is the point. Regulators really can get into the mix and, and change a deal or even make sure it doesn't happen. Now, as Dix announced the deal with Footlocker, there was one other thing that caught our eye, and that was the fact that Nike apparently sells about a third of products through just those two retailers alone. Now, one of the things that Senator Warren says in her Letter again, I've got it in front of me. She says, quote, the new giant sticks and foot locker together would have significantly increased power to extract favorable conditions with manufacturers. This could mean that independent retailers are at a disadvantage when it comes to negotiating with suppliers. And again, the scale here when it comes to Nike in particular is one that the market took notice of. So back in May, interestingly, Nike turned around right when this deal was announced and said, we, Nike, are going to start selling our products on Amazon again. So it's even as though they felt there could be some risk here and they got in front of it by making sure they diversified their distribution channels. Well, here's where we got into. Now, the review did happen. It went through the regulators and Dick's confirmed today that, quote, all regulatory approvals has been received. The company anticipates the acquisition to close on September 8, 2025.

[C]

And as a retail investor, what this says to me is when you see a big merger and acquisition, there's headlines. The share prices are moving. You have to remember that just because it's a proposed deal doesn't mean that it's a done deal.

[A]

That's right. Volatility equals risk. When you see volatility in share prices after deals are announced, it's the risk that it doesn't go through. One final thought, because you asked me which approvals, I was looking at the other bucket of approvals here, shareholder approvals. Not surprisingly, foot. Footlocker shareholders approved this deal. If you've been lucky enough, smart enough to be a Footlocker shareholder, this acquisition delivers value to you of a 90 premium of where shares have been trading. So not surprisingly, Footlocker shareholders voted to approve this because they don't have to deal with more weak earnings reports like the one that they just went through this week. Dick shareholders, on the other hand, I'm not one, I don't own Dick's shares. But I got to tell you, share price down. Not particularly surprising. They must be wondering why, given the risk of absorbing a struggling Footlocker, why that this seems to be a good deal no matter what the synergies or opportunities. Could be lots going on in these deals. We'll keep breaking those down, but we're going to take a quick break. And when we come back, activist hedge funds are all over the news. But what are they? John, we have a question from the audience.

[C]

That's right, Charlie in San Antonio wrote in. Ann, I keep hearing about activist hedge fund investors and I keep pretending I know what they are. Can you tell me what they are and why I should care.

[A]

Got it. So the fake it till you make it. We're going to make this one real. But bottom line, an activist hedge fund is part investor, part agitator, and sometimes part corporate matchmaker because they push companies to do things differently with the hope of making stock worth more. The way I look at this is activists add a little bit of spice, a little bit of drama to the market. So from a theatrical perspective, I always enjoy it when there is a little bit of activist activity that I can follow. So here's how it works. In broad strokes, an activist fund will buy a big enough stake in a public company to get the CEO's attention and to get the board's attention. And then the activist pushes for changes that they believe will unlock more value for shareholders. That could mean by suggesting how to cut costs selling or buying assets, shaking up the board of directors, sometimes even calling to replace the top executives at the company. Now there are a couple of headlines involving exactly kind of this thing. Just this week alone, Cineplex, the movie theater company called on by activist Wynwood management to sell its digital media business and to use the proceeds to buy back shares. Medtronic, the medical devices maker, just added some experienced healthcare board members and announced two new committees. One to focus on acquisitions and growth, one to drive operating improvements. And they mainly did this because the activist Elliott management pushed for change. So even when you're a $118 billion market cap company like Medtronic, you are still susceptible to activists coming up and trying to tell you what to do. Now these are just two examples and here's why the activists got involved in the first place. Medtronic share price down 8% for the past five years. Cineplex down year to date. And in both cases, activist funds saying it just doesn't have to be that way. Now these funds think that companies could be worth a lot more if managed differently. And because these funds actually own a chunk of the st, they have the incentive and the influence to demand those changes. And the way they make those demands are the following. They call management directly, sometimes in private, but they often build their case publicly as well. They write letters to shareholders and they often publish them. They put them out into the open, they rally other big investors and sometimes they go directly to the media. Others, like Bill Ackman, a famous activist, also takes to social media platforms like X. So a well known activist and those with strong reputations can shake things up even if they own relevant relatively small stakes like under 5%. So for everyday investors, here's why these battles can matter other than just the entertainment value. A successful activist campaign can boost the stock price in the short term because the market wakes up to the possibility of positive change. But when it comes to the long term, activist funds can be a little bit controversial. Data out there is a little bit mixed. Some argue that they can push for actions that create short term gain but actually hurt long term growth. Again, data mixed. And we can unpack that in subsequent episodes. But I'm glad you asked. It's one of my favorite topics actually.

[C]

Yeah. And if you have a question for Ann, do like Charlie did and send an email or voice memo to brewmarketshoworningbrew.com.

[A]

Well, it's 4:00pm on the east Coast. The bell is ringing because the markets have closed and we don't have a ticker tape. So we're going to throw it over to our human ticker, our producer, John.

[C]

Well the markets were all up today. The S&P 500 hit an all time high reaching 6500 for the first time and finished up a third of a percent. The Dow was up over a tenth of a percent and the NASDAQ up half a percent on the day. Some market headlines Nvidia ticked down slightly today despite a beat on earnings and revenue for the quarter and despite issuing near term guidance that topped estimates. That's even without key new sales into China continuing a pattern of the chip king issuing blowout results and the market just wanting more. And finally, Tesla was down a percent today on the news that its European sales fell 40% year over year in July while Chinese EV Ridal BYD European sales were up 225%.

[A]

Always I'm going to take the market reaction on. Nvidia never ceases to amaze me. Any other company delivering those kinds of results would have had absolute ripping at share price. But we just keep expecting more. Moving the goalpost for Nvidia. One thing that we're looking out for as we race to the end of this week and get towards our Labor Day weekend break, we do have a slew of macro data coming out and tomorrow is going to be actually a pretty big Friday. We saw the US economy expanded 3.3% for the second quarter. The data came out today that growth was stronger than initially thought. So let's say that the Fed is watching. That puts them in a slightly tougher spot. Are they going to cut interest rate? The market certainly thinks so for September. But tomorrow we do have the Fed's favorite inflation indicator coming out Core pce. Going to see how hot that runs because that may have an impact on that September rate cut that everyone's been hoping for since January. Jackson Hole last week. That's it, folks, for today's Brew Markets Daily.

[C]

Brew Markets Daily is hosted by Ann Berry and produced by John Croteau, Tarek Abdelatif, and Emily Milian. Our technical director is Uchena Waugh, and the president of Morning Brew, Inc. Is Devin Emery. If you'd like to get in touch, send an email or Voice memo to BrewMarketShoworning Bukom.

[A]

Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. We'll see you back here tomorrow, folks. Same time, same place. Sam.