Weekly Digest: Dallas Cowboys Owner Scores Big With a Natural Gas Play

Welcome to your Sunday digest…my breakdown of the things we’re thinking about and talking about in the Global Intelligence world. 

First up this week, Dallas Cowboys owner Jerry Jones has scored a touchdown with a natural gas play. 

A few years back, Jones, who made his fortune in oil and gas exploration, took control of Texas-based natural gas producer Comstock Resources. This was back when natural gas prices had plummeted.  

Now, U.S. natural gas prices have tripled in just the past year, due in large part to the war in Ukraine. 

Europe is trying to end its dependence on Russian natural gas, so it is desperately seeking new sources. This is increasing demand for American liquefied natural gas exports, as European utilities try to build their stockpiles.  

Comstock operates drilling fields just north of LNG export terminals along the Gulf of Mexico. So, it is a major beneficiary of the sudden spike in demand for U.S. gas from Europe. 

Which explains why Jones’ $1.1 billion investment in Comstock has more than doubled to an estimated $2.6 billion. (And this is even after the recent fall in natural gas prices in the U.S. due to a fire at one LNG export terminal that is expected to lower U.S. capacity for LNG exports.) 

That’s quite the win. And Jones is confident his investment could go even higher. “I’m not at all thinking it’s payday time,” he said. “I think we’re in the first quarter of this game.” 

I tend to agree.  

We are in the midst of a commodity super-cycle (a prolonged period of higher commodity prices), and a longer-term spike in energy prices as Europe seeks a permanent decoupling from Russia. 

That’s why I think Jones has even more gains coming his way…and it’s why I remain strongly bullish on the oil and natural gas plays in the Global Intelligence Portfolio. 

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Next up…Swiss luxury watchmaker Tag Heuer is the latest big brand to dive into NFTs. 

Non-fungible tokens, or NFTs, are those one-off, one-of-a-kind cryptos that are used to represent ownership of unique digital assets, whether a piece of digital art, a plot of land in a metaverse, or a piece of a new Web3 company. 

The mainstream media love to dismiss or belittle NFTs, and in particular digital art. After all, how can online images have value? 

But to the generations who grew up in the online world…the generations who’ve never had to buy a CD, or rent a video, and who consume all their media digitally…the idea of owning a piece of digital art is compelling.  

In essence, NFTs are a kind of modern status symbol.  

Big brands like Tag Heuer understand this…which is why the watchmaker has developed a new smartwatch that allows owners to show off their NFT collections on screen.  

Owners of the smartwatch will be able to connect to popular cryptocurrency wallets, including Metamask and Ledger Live. And the watch face has three different ways of simultaneously showing time and digital artworks. Though it might sound corny, I can assure you that showing off an NFT is also a hugely popular trend among younger owners of Apple watches. I’ve seen all kinds of Apple watches displaying as their face NFTs from Bored Ape Yacht Club, Solana Monkey Business, and several other blue-chip collections.  

According to Tag Heuer, this NFT viewer feature “is a new way to bring these valuable and highly collectible artworks into the real world.” Tag Heuer also predicted digital collectibles could become a vital part of the cryptocurrency sector and unlock new use-cases in the future. 

This is not Tag Heuer’s first foray into the crypto space. Last month, it teamed up with Bitpay to enable customers to pay in bitcoin and other major cryptos.  

All this shows that while crypto is undoubtedly experiencing a difficult moment, the integration of crypto into the mainstream is continuing apace. 

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Finally, we end with Revlon and the looming wave of retail bankruptcies. 

Last week, the 90-year-old cosmetics company filed for bankruptcy protection in the U.S., saying inflation and supply chain disruptions had driven up the price of its products, which had impacted its profitability. 

Now, the question is not whether another retailer will follow suit, but which one it will be… 

Before the pandemic, there was a flood of retail bankruptcies. Think: J.C. Penney, J. Crew, and Brooks Brothers.  

Then this wave of bankruptcies subsided in 2021 and 2022 as companies received financial stimulus relief from Uncle Sam.  

Now, analysts are preparing for the bankruptcies to return, since stimulus is ending and inflation is eating away at consumer spending. 

According to an analysis by Fitch Ratings, the companies in greatest danger of default include mattress maker Serta Simmons, Billabong owner Boardriders, men’s suit chain Men’s Wearhouse, and sportswear manufacturer Outerstuff. 

This could lead to a wave of mergers and acquisitions in the months ahead as bigger, more financially stable companies look to gobble up destressed rivals at a discount. 

That brings us to the end of this week’s digest. Many thanks for being a subscriber. And if you have any feedback or questions, reach out through the contact form on the Global Intelligence website. 

Enjoy the rest of your Sunday.