The Best One Yet - 🎈 “1 balloon bouquet, please” — Bird’s e-scooter SPAC. Party City’s helium hype. SoftBank’s record *profit.

Episode Date: May 13, 2021

Party City knows you didn’t love Becky’s Zoom baby shower, so it’s betting the future on balloons (literally, Balloon Bouquets). Bird tossed off its helmet and is going public via SPAC. And Japanese venture capital firm SoftBank has a 300-year investment timeline and just delivered a bigger profit than Amazon… with just 1 asterisk.$PRTY $BIRD $SWBK $SFTBYGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Thursday, the new Friday, May 13th. Unfortunately, stocks fell yesterday, down, brutal, about 2% on average. Yeah, they went from red to maroon. Companies are seeing Godzilla. Prices are mythically rising across the economy. Just as we mentioned yesterday, Snackers, it's inflation. It's bad for stocks. It's kind of scary. You don't usually see it. It's like Godzilla. Inflation made your mattress more expensive. Yes, it did, but this pot is still free. Mattress, mattress, mattress. The best one yet. Jack, what's our first story to Bird rides, a scooter sharing company, has been racing lime for the two-wheel domination of the world. So Bird kind of wins now, because it's going public.

Be a spec. For our second story, Party City stock is up 20% in the past week. The future isn't Zoom Bacheloretts. It's balloons. Literally. Balloons. They said it a lot. This story is about balloons.

I got a thing for balloons. For our third and final story, SoftBanks Vision Fund claims to have a 300-year investment timeline. So the 40-year-old venture capital firm just made a bigger, profit in the last three months than Amazon did. Twice as much as Amazon did. True story. Which is a nice segue because those are three great stories, but Thursday is the new Friday. It is.

And what better way to celebrate than on a boat? Last week, Snackers, Jeff Bezos, the CEO of Amazon, sold over $2 billion of his Amazon stock. Don't worry, he's going to be fine. It's going to be fine. He's going to be fine. About 1%? He's not, like, cash out on his savings. He's fine.

No, he's not. No, he's not. He's doing it to buy a 417-foot mega-yat. Must be nice. Still under construction. That's right. This mega dinghy is so big that the technical term in nautical circles is actually super yacht. This super yacht is claustrophobic in the Panama Canal. It doesn't work there. Larry Allison, by the way, he owns an island.

Cute. Nice, Larry. Jeff's Island goes 25 knots. Very nice. Now, the estimated cost, because Jack and I jumped in snack style, of Bezos's new boat, is $500 million. Jack, I just grabbed my T-I-83 plus. That's a million dollars per foot of vessel. All right, so Jack, here's the funny thing, though. That's for the big boat. And it also includes a support boat with that $500 million price tag. The support what? Yes, the support boat. That's right.

This yacht was so big. It needed its own spotter yacht. Okay, the support yacht for the super yacht is actually a pretty big yacht. Exactly. Its support yacht has a helipad. This is like if LeBron's dog could also dunk. But Jack, the best part about all this, Jeff Bezos paid more for the Super Yacht than he paid for the Washington Post newspaper. $500 million for the super yacht is two Washington Posts. Now, this thing still doesn't have a name yet. What are you thinking, Jack? The Prime Princess. How about the tax haven? The ship'scription. I think we landed on the perfect one about an hour ago. It's in HQ3. Let's hit our three stories. out the way.

The snacks about the hair ain't food, it's air candy. They don't reflect the views of the Robberhood family. It's all informational just so, you know. We're not recommending any securities. It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible. Business news for you.

Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Bird Rides is merging with us back to finally become a public. publicly traded scootin stock. The first ever pure play e-scooter stock. I like what you did there. Now, not really a finally situation. Would you say that, Jack? Yeah.

Bird was founded in 2017 by an X-Lift and X Uber guy to create an e-Scooter sharing app. You had full LinkedIn on that. I like that you did that, man. Well, a guy named Travis Vandersandin. Yes, he deserves a full profile. By the way, key point here, the Z in Vandersandin, his last name, it's capitalized in the middle of the word. No, he's serious.

It's like the Zorro of mobility. So behind this bird story is a publicly traded shell SPAC company called Switchback 2. They're acquiring Byrd, the scooter company, effectively taking Bird public. So the stock for them right now is SWBK. Eventually it's going to change to B-I-R-D and value this company at what, 2.3 billion? That's right, which is awkward because 2.3 billion is 19% lower than Bird's last known valuation one and a half years ago. Let that sink in Snackers. What have you been doing the best year and a half, Bird? I've been shrinking and worth by 19%. So to understand this like shrinking situation going on over at Bird, you kind of got to rewind back to 2018, great year jack. Back then, e-scooters were kind of doge-coining, but for walking. It was the doge coin of walking, basically. Silicon Valley VCs. They figured scooter sharing was like the next big car sharing thing. So there was a gold rush to invest in any startup. Anything. dealt in two wheels with a handlebar.

It's a meal delivery service, but it takes care on a scooter. So naturally, Bird became the fastest ever unicorn. The fastest company hit a billion dollar valuation. But then, Jack, remember, we were covering it that week, like two weeks after it hit a billion dollars, boom, it hit $2 billion in value. Now, the reason there was so much excitement

was because basically Bird solved the last mile problem facing every city-loving young professional. Open up the app, yep, grab one of these two-wheeled scooters. It's Timmy's preferred method of operation. We would call up Timmy and be like, hey, can you pick up Vanessa's dumplings? He was already on the scooter. He'd already gotten home. But there's a problem.

These scooters, they weren't durable. No, they weren't. Reportedly, these scooters lasted only like 23 days, and then you'd have to replace that actual shared scooter. That's expensive. For Bird, these scooters were flimsy. They were fragile, and people wanted to break them because they didn't like them on City Sidebox.

My mom would see them and she would have this aggressive reaction. to them. I thought she was going to break one. Would she kick them? She wouldn't, but I could see it in her eyes, you know, which then led us to another problem we noticed. All this fresh competition as more and more scooter companies came about. We covered in 2019 and 2020 when Bird tried to consolidate the scooter industry by acquiring scoot and Cirque. So you got two problems here, which then led to a third problem that messed with Byrd's valuation the last couple years. The pandemic. Yeah. We covered on snacks daily when Bird's revenue fell by 37% in 2020 because city-living young professionals didn't even go to the office. No, there was no last mile problem for Bird to be solving in the last year. Recap, scooters surge like some cryptos, but have also kind of plummeted like some crypto. True. So Jack, what's the takeaway for our buddies over at Bird? Bird is spacking just as spacks are cracking. Snackers, what Bird gets from this go in public situation, it's getting half a billion dollars in cash. Investors can finally sell.

their bird stock and a whole bunch of PR. With that 416 million in cash, bird plans to scale to more cities, add bikes to the sharing network. That's kind of cool. And be the first pure play scooter company. Now, there is an issue here. And that issue is the timing because Wall Street is kind of soured on SPACs lately. Snackers, there's an ETF that tracks the stock prices of all the SPACs that have SPACED. And it is down 35% since February. Not a good luck. And the number of SPAC deals is actually phoned from about 100 a month in January and February and March to just 10 a month in April. We're sensing a stigma about SPAC stocks that they're overhyped. Jack, great example here, the OG SPAC company, Virgin Galactic, how they're doing. It's down 73% since February.

Basically, some investors, their thinking regulation is coming for SPACs. Some investors think the process of going public through SPAC doesn't have enough diligence to properly value that SPAC. In the meantime, And Bird is spacking its way into the public markets. But there's no guarantee it stock will fly. For our second story, by the way, Jack, did you say that boat earlier was like claustrophobic in the Panama Canal? Yes, I did. It gets claustrophobic in the third line.

Put that on a tissue. Put that on a pillow. It's a great line. For our second story, SoftBank that just announced $18 billion in profit from the last three months. How big is that, Jack? How big is that? You're thinking? It's more than double Amazon's best quarter.

order ever. SoftBank stocks did very well for SoftBanks stock. Singular. What is SoftBank? Great question. It is a Japanese telecom company. It's wireless. It's like Verizon or AT&T. It's not super exciting company. We like to call it the A-Rod of VC because they make sumo-sized investments in disrupting tech companies, but they also strike out a lot. It looks like scorecard here, four strikeouts for Dinger situation. Arod and SoftBank. It is famous for their investments in Uber, and WeWork and Wag, just name a few, a very particular part of SoftBank made those investments.

It's called The Vision Fund, and this is interesting because most venture capital funds are not publicly traded. They're not accessible to investors like you and me. Now, only the VIPs can get in on those venture capital funds that invests in pre-IPO companies. But SoftBanks Venture Fund, called the Vision Fund, is 25% owned by SoftBur. Bank Corporation, a publicly traded company. So technically, soft bank stock in this telecom company is actually one-fourth of their venture capital vision fund. The other 75% of the vision fund

is the typical big-shot VIPs you'd expect. It is. The Saudi Arabian royal family, Foxcon, and even Apple owns 1% of the Vision Fund. By the way, we noticed that all 16 of the Vision Fund's leaders are actually male. Yeah, which is not particularly unusual among Japanese companies. But we got to focus on one in particular, Masayoshi's son, who's in charge of the Vision Fund and had quite a January through March, Jack. From January through March, he looked at his trading app and he watched SoftBanks Fund's moon. Oh, yeah, he did. The Vision Fund invested not once, not twice. How many? But four different times into DoorDash before its IPO. DoorDash is the company that made us coin the phrase, the double double IPO.

The double double. So SoftBank's $700 million investment in Dornash turned into $8 billion. Oh my God. Now, Kupang, another company we've covered on snacks, they IPOed back in March at evaluation nearly 10 times higher than their previous fundraise. SoftBank's investment in that South Korean e-commerce giant, get this. It resulted in a $28 billion gain. Billion with a big.

That one investment was worth three lifts, not too late. And it wasn't just those two astonishingly fabulous IPO Paluzas. No, no, snackers. We jumped in snacks out of this. Get this. If you look at SoftBank's earnings report deck, it is a masterful piece of art. They refer to their business as the business of producing golden eggs. They literally had a slide with unicorns on one side and a goose laying golden eggs on the other. It is like it's sponsored by Lisa Frank. It's incredible. SoftBank also invested in Alibaba, in Open Door, in Slack. And all those great stocks contributed to a $40 billion profit in 2020. Jack, you add all that up on our whiteboard,

and SoftBank just doubled the previous Japanese national corporate profit record set by Toyota in 2014. So, Jack, what's the takeaway for our buddies over at SoftBank? SoftBank's profits are as wild as the stock market because of an asterisk. Oh, there is an asterisk here. SoftBank's core telecom business, it barely like impacts their overall results, thanks to a new counting rule. Starting in 2018, the SEC required that companies classify swings in their investment portfolio, which SoftBanks has a big one up. Yes, it does. As profits or losses for that period. Okay, so Jack, me, you, us, we recognize a gain or a loss on an investment when we sell it. That's when it's realized. That's when it's real. But for companies, thanks to this new rule,

unrealized gains and losses for their stocks, they count as profits and losses for that period since 2018. Okay. So here's what that means. For SoftBank, for Berkshire Hathaway, for IAC. Their profits are swinging wildly depending on the stock market and pre-IPO investments they made even if they haven't sold the stocks yet. That's why SoftBank lost a whopping $18 billion in 2019. Back when its WeWork investment totally tanked and profited $40 billion in 2020 a year later. When most of their other investments totally mooned and doubled, wild swings because of that rule asterisk. For our third and final story, Party City, we noticed that stock had jumped 20% this week. Party City is betting its fortunes on rubber-wrapped cubic feet of helium.

Think about that. You got to love, Jack, you got to love Party City. Party City. The Walmart of matching paper cups. 14th Street. I bought many a 20-pack of multicolored solo cups. And they know you do, Jack, and you know what else they know about you? They know you're tired of Becky's Zoom baby shower.

You don't want to do another one. No, you don't know. Although Kyle and HK had a great Zoom baby shower. Sure it was great. I'm sure it was fantastic. Party City's got 850 stores, shock full of party supplies, and they thrive on the seasonal holidays. First quarter, you got yourself some pretty good holidays going on there. Good seasonals. The Super Bowl? Yep, Valentine's Day. St. Patrick's Day and Mardi Gras. Then they mentioned some like, I'm not going to lie, these feel like fake holidays. I hadn't heard, I mean, Dr. Seuss Day, does that count? Never heard of it. Okay, I had never heard of this. A hundred days of school day? That a thing? Two days in the holiday. It's when there's a hundred.

days left of school. Middlebury College had a big dance. Okay. Where were you? I feel like I miss this. I feel like this is awkward now. Sales were up three percent last quarter for Party City. They were resilient over the pandemic. You know, you needed supplies for the outdoor barbecues, right, Jack? Okay, so sales were up three percent, but balloon sales were up 50 percent from last year. Jack and I were fascinated when we heard that difference. We dove in snack style, get this. In their earnings call, they mentioned party three times, balloon eight times. Barron, Mike. Barron, the company's called Party City. It is. And they mentioned Party Three Times. They said balloons are a fundamental part of the overall experience. Their words. They're selling balloons, you know,

left, right, up, down everywhere. They're selling them wholesale. They're selling them retail. Speaking of Up Down Everywhere, they own a company called Anagram, which is based in Eden Prairie, Minnesota, and they only do metallic balloons. Party City's not just focused on the quantity, Jack. They're focused on the quality, too. I've given up the exporting, just focusing on me and That's right. These guys are doing metallic to latex balloons. They got your standard 18-inch bulbous balloons, Jack, but they got you covered on the number balloons too. We all need the number balloons to announce your age on Instagram. Birthday. Yeah, you're 32 years old. And we're the balloons switch around. Are you 23? Are you 32? You'll never know. New thing. Party City's pushing. Balloon bouquets. New thing. This is like a florist. You go into Party City, and they mix some texture balloons of different colors and sizes, too. And like flowers. they shrivel after a week. A big risk for Party City is helium. I think it's H.E. on the periodic table of elements. Let's go with that. Now, if there is a shortage of helium, which there was two years ago, that affects their prices pretty significantly on these balloons. It's a crucial element for balloons,

obviously, which there's only a few sources on earth of helium. I mean, Jack, I got to open up to you on this. Molly's birthday last week, popped in. I get four balloons, or three balloons. Get this, $60 for the balloons. How was it so expensive? I don't even know. I just pay, I'm not going to say no to balloons. One of them was an avocado balloon, so that may have been more, but I don't know. Metallic or latex, does it even matter? So, Jack, what's the takeaway for our buddies over at Party City?

Party City found a product to cure seasonality. Oh, Snackers, one of the greatest challenges in all business, it's seasonality. If you're a spiked lemonade company, how do you sell spiked lemonade in the middle of the bitter, cold winter? Jack, if you're canning the goose, how are you hawking $2,000 park is in the middle of the summer? Here's what Party City says about balloons. They're a strategic priority. Strategic priority. Each store is built with a helium hub.

They're selling balloons for all occasions year-round. Because if you're Party City, you're only selling candy on Halloween. You're only selling heart cards on February 14th. But your buddy's birthday brunch, those happen 365 days a year. So true. Someone getting injured. Your buddy twisted his ankle. he needs a get well soon balloon 365 days a year. Jack, grad party, you don't know what to give.

You want to do something simple and you don't want to overthink it. What do you go with? Everyone loves balloons. Balloons. They are party city's strategic priority because balloons solved seasonality. And everyone loves balloons. Jack, can you whip up the nylon or metallic takeaways for us over there? I can't believe we didn't mention water balloons. I know, which I don't think they do. Could be a profit puppy. Bird has spacked its way onto public markets through spring. Switchback to Acquisition Corporation. But given what SPACs are doing lately, no guarantee this SPAC will fly. SoftBank just have one of the best profit years for any company ever.

Okay, honestly, asterisks notwithstanding, investments over at SoftBank have done fabulously well. For our third and foster, party city has peaks on Halloween, but fills the rest of the year with balloon sales. Honestly, balloons are party cities cure to seasonality. Jack, I walked in the restaurant with the avocado balloon. All eyes were on me. They should have been on the birthday goal, but I was holding the balloon. So you stole her thunder. Now time for our snack fact of the day.

This one's sent in by the whole team over at El Cialito Cafe in Southgate, California. I drink about three cups of coffee, which is, I think, average for an American. I can't do it. I'm up for three nights if I have any coffee, decaf for life. I throw it in the blender. I put in a little butter, a little collagen, and a little creamer. I know. And I blend it.

It's a Botox latte. That's how I do it. 60% of worldwide coffee, though, it's grown in Latin America. Half of that Latin American coffee is grown in Brazil. If so facto, Brazil is pumping out about a third of all the world's coffee every year. A third of my gorgeously whipped coffee latte thing. I should say, uh, ubrato. Snackers, you look fantastic.

Remember Thursday's New Friday and a fantastic way that you can help grow this podcast. Tell whoever is next to you right now, HY HYSD. Have you had your snacks day? By the way, Snackers, the colonial pipeline, it's back on. It is. There's gas. People can actually drive places pretty soon. You've lost Russian-backed cyber hackers. You've lost. You lost. We'll see you tomorrow. Can't wait.

And before we go, happy birthday to Joe Lopez, who's from St. Louis, but currently stationed in Stuttgart, or Germany. Joe, enjoy the Spetsla. Please. And wash it down with some Tarnencepla. Also, happy birthday to Christina Lolova from Bulgaria, now in Philadelphia. Happy birthday to Phil Hampton in New York City. And Hannah Duket in Bowling Green, Kentucky. Congrats to Ben from Boston for rekindling a relationship with his old ex.

And happy birthday to Jessica Frederick turning 29 in Minneapolis. And Romaine Mynutt is graduating in this great state of Georgia. And date and her husband one year anniversary over in New York City. And oh my goodness. Congratulations to Carly London and Seth Brody. Yes. Who just got engaged. One proposed, I don't know who.

They just got engaged in a golf course in L.A. Jack. She said yes. This is Jack. I on stock in Amazon. Nick on Stock and Apple. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security.

The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.