Callaway’s Topgolf acquisition has been a masterclass in value destruction

The combined company, Topgolf Callaway Brands, is now worth less than what Callaway paid to acquire Topgolf.

9/12/24 2:44PM

In October 2020, as the world dealt with pandemic lockdowns, Callaway Golf announced an intriguing acquisition: the golf brand was buying Topgolf, the fast-growing driving range/entertainment venue hybrid, in a $2 billion (including its existing 14% stake in the company) deal to create one of the biggest brands in golf.

At the time, the deal seemed like a home run for Callaway that would help it expand its customer base. Over 50% of Topgolf’s 23 million guests in 2019 were non-golfers, and 40% of off-course golfers (meaning they played at venues such as Topgolf) were between the ages of 18-34. Topgolf was also growing quickly: It had generated $1.1 billion in revenue in 2019, and its revenue had grown at a 30% CAGR over the last three years. The combined entity was expected to generate $3.2 billion in 2022 revenue and grow at a 10% CAGR after, as well as $360 million in 2022 adjusted EBITDA with mid-to-high teens growth after.

However, four years after announcing the business combination, management is preparing to pull the plug. Last week, The Wall Street Journal reported that the board of Topgolf Callaway Brands (the combined entity) would split the enterprise into two businesses, with a spinoff to shareholders being the most likely outcome.

Interestingly enough, the company surpassed its initial revenue projections, hitting $3.13 billion in sales in 2021 and $4 billion in 2022 (28% growth), but growth slowed in 2023, with revenue reaching $4.28 billion (7% growth), and the Wall Street Journal noted that Topgolf’s revenue is likely only up 1% year over year in 2024.

The combined company’s net income also decreased each year, from 2021 to 2023, from $322 million to $158 million to $95 million. One strain on the company’s bottom line was debt: Callaway assumed $555 million in Topgolf’s net debt, and interest expense has climbed by 82% from 2021 to 2023, from $115.6 million to $210 million.

I’m curious how the company’s management will value Topgolf in a spinoff, considering that the combined company is now worth less than the $2 billion Callaway paid for Topgolf four years ago, with its total market capitalization sitting at $1.69 billion.

Talk about value destruction.

Max Knoblauch23h

The Trump administration is reportedly planning a 50% made-in-America requirement for USMCA tariff relief

Qualifying for USMCA-related lower tariffs may soon require more US-made vehicle components, according to reporting by The Wall Street Journal.

The Trump administration is reportedly planning to introduce a 50% US content requirement for vehicles covered by the trade pact to receive lower tariffs. The content would be measured by cost, according to the WSJ.

There currently isn’t any US-specific requirement for those lower tariff rates, but in order to receive preferential tariffs, vehicles are must contain at least 75% regional content (components made in North America). Per Reuters reporting, the Trump admin is seeking to raise the regional requirement to 82%.

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Overall, Tesla will likely have the easiest time qualifying for any stricter requirements. The automaker’s vehicles contained the highest amount of US/Canadian content in 2025, according to American University research. Ford, GM, and Stellantis all scored lower.

Notably: the underlying government data that many domestic content measurements rely on intentionally combines US and Canadian components, so it’s difficult to know exactly how much of any given vehicle is specifically US-made.

Exclusive | Trump Administration Wants Autos Under USMCA to Be at Least 50% Made in America

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Tom Jones5/29/26

The $640,000 Luce makes the average Ferrari look like a bargain

Put aside the shape; put aside the smoothing out of Ferrari’s iconic sharp edges; put aside, even, the calls from former Chairman and President Luca Cordero di Montezemolo to “take the Prancing Horse off.” On the grounds of price alone, Luce detractors might have a point.

By now, many of us will have read the criticisms of Ferrari’s first fully electric vehicle, as the Luce — which was unveiled to the world earlier this week and promptly saw the company’s shares crash out in New York and Milan — gets subtly shaded by competitors online and not-so-subtly shaded by basically everyone else.

What makes all of this worse for Ferrari is that, even by the luxury car maker’s notoriously high standards, they’ve slapped a pretty hefty price tag on the Luce, and the company’s CEO, Benedetto Vigna, has already been forced to defend the €550,000 ($640,000) price point, saying yesterday that it’s “fair to pay for innovation,” per Reuters.

While Ferrari’s cars have been getting more expensive of late, as recently as 2022, Ferrari’s average revenue per car sold was around $340,000. At nearly twice that price, this new electric model is obviously proving a little much (visually, conceptually, and financially) for many loyal and long-standing fans of the Prancing Horse to stomach.