The Best One Yet - “2 stock Double Doubles” — DoorDash & Airbnb’s IPOs. Starbucks’ Return of the Routine. AT&T’s $66B mistake.

Episode Date: December 11, 2020

The 2 biggest IPOs of the last 2 years highlight 3 reasons we’re seeing so many companies go public right now. Starbucks’ Investor Day presentation revealed a completely new vision for your new coffee routine (spoiler: “Walk-Thrus”). And AT&T made a $66B mistake 5 years ago… so it’s fixing that this week.$DASH $SBUX $TGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn 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 Friday, December 11. Happy two weeks until Christmas and happy second night of Hanuk, everybody. Jack and I whipped up three wonderful stories where he happened to be our best ones yet. Jack, first story. The two biggest IPOs of the last year?

They happened in the last two days. We also whipped up three reasons why DoorDash and Airbnb just pulled off. Honestly, we love saying this. The double double. The double double. Sorry, In-N-Out Burger. Second story, Jack, what do we got over there? Starbucks episode 2021, the return of the routine.

Starbucks, second story, this is. Help us, O'Milk, you're our only hope. Third and final story, Jack, what do we got over there? Five years ago, AT&T made a $66 billion mistake. So, you know what, they decided, you know what, they're going to fix it. They're fixing it this week. They decided it this week they're going to fix it. But Snackers, before we hit those three fantastic stories, which are headlined by IPOs,

IPOs are getting all the attention to that. Yeah, but honestly, Jack and I are looking at the numbers here. The biggest jump in value may be clinging to your pecks. T-shirts are the new Rolex over at Christie's, the famous auction house. Get this, Snackers. Jack and I noticed they are auctioning off 253 Supreme T-shirts for $2 million over in New York. So facto, $7,900 per shirt. We told you about Supreme before. Basically, this company managed to pull a cult following out of a two-suit.

syllable word. Indiana Jones is reportedly a bidder for the law supreme T-shirt. So this two million dollar closet at cotton auction is the only complete supreme set of T-shirts known to exist. We're talking every single t-shirt with that Supreme Red Box logo ever made. Straight from the same New York City skateboard shop that was founded in 1994 in Soho and just got sold to VF Corp. 1994. Interesting because the seller of these 253 t-shirts is only 21. He wasn't even alive when the first Supreme T-Strees were made. That's right. This Supreme T-shirt collector started out buying these shirts at the tender age of 14. Wise kid, because he said Supreme is more like fine art than clothing and with scarcity, cultural reference, and values that speak to a new generation of collector. Snackers, based on this first ever T-shirt millionaire, you may want to hold up.

onto your collection of coosies. Yeah, that random collection, it could become fine art someday to the next generation. We're talking postmodern. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. It's snacks about to hear food. It's air candy. They don't

reflect the views of the robberhood family. It's all informational just so. 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 Fenra slash SIPC. For our first story, this week, we've seen, honestly, we've seen two double doubles. Here is why Airbnb and DoorDash stocks quadrupled who benefited from that and why. Talking the double double double here, the double double. Jack, the double double. The double double. It's what happened this week to DoorDash and Airbnb stock. Yeah, you know these companies. They're two San Francisco-based gig companies. Both were sumo stocks. We were straight up missing out until. this week. Both are tech platforms that connect customers with providers, one for food, one for places

to crash. And both have just been private for the last few years, so we were straight up missing out on investing until they just IPOed yesterday. And both set their IPO prices at double what they were previously worth in the private market. And then both stocks actually started trading at double that official IPO price. Hence the double double. The double double. And no longer are they sumo stocks. No, no, no. Airbnb is now worth $100 billion. five times more than it was worth just this past summer. And DoorDash is now worth $60 billion, four times more than what it was worth during the summer.

Now, we know what you're thinking, thinking. How is this double-double happening? Why did the prices just double instantly? Complicated answer, but the actual IPO happens the day before you and I see the IPO. A day before you and I can actually buy or sell the stock. That's because the company like Airbnb or DoorDash, they're using investment banks to price their private stock, who first is going to sell that stock to a bunch of their friends, basically institutional investors.

Institutional investors. You've probably stayed at a buddy's beach house. It's probably owned by an institutional investor. If you're out one of those beach houses, there are definitely some PFWTMs at those beach houses. We're talking finance folks who control huge funds of money so big that they can buy massive blocks of fresh IPO stock from Airbnb in Doordash. All right. So here's what happened with DoorDash first. Airbnb after. First, for DoorDash, the banks got together, basically the day before the IPO, and decided that DoorDash's stock was actually worth $102 a share. For Airbnb, different investment banks decided the stock was worth $68 a share. So, Jack, we got the share prices right before the

IPO. This feels like the first doubling. This is the first double, because that $102 and $68, that is doubled the share price of the private stock of DoorDash and Airbnb from the summer. All right, so that was right before the IPO. But then on the IPO day, when the shares start trading publicly, we could finally access them as like retail investors. We could buy Airbnb or dash stock. And there was so much demand for stock in these companies that we've been using on our iPhone for years that the price instantly doubled. The moment you looked at your app and it started trading, it was up 100% from like the IPO price. So at first it doubled, then it doubled, hence the double double. Now, we know what you're also thinking. That was really

complicated and opaque. Yeah, it was, yes. And we agree. We do not know how the investment banks decided on the first doubling, the doubling of the price. But what Jack and I do know for sure is there was a winner here, and that winner was the institutional investors hanging out at those beach houses who got to buy the stock the day before the second doubling. That's because they got to enjoy the second doubling. They were gift-wrapped 100% stock gains in just one day. So Jack, pulling a little process elimination here, who are the losers in this? situation? Kind of the rest of us. Yeah, it was, wasn't it? Who were really stoked to get our hands on DoorDash and Airbnb, but we had to do it post double double. And this is why Snackers,

you see so many people calling for like more transparency in the IPO process because these double doubles seem to happen. It's frustrating when you see all these headlines of IPO stocks blowing up, but regular investors couldn't participate in that blowing up. But keep in mind, Snackers, not every IPO doubles or even like double doubles. Some of them have. Some of them half. Yep. And some of them double half. Yeah, technically, are we going to call that a quarter, Jack? No, we're going to call it a double half. All right, so Jack, what's the takeaway for our buddies? What's the takeaway for our buddies over at DoorDash and Airbnb? We whipped up three reasons why there are so many IPOs happening before New Year. Snackers, reason number one, banks are able to execute

IPOs quicker. They can literally make IPOs happen faster than ever right now. In the past, they whipped out their away suitcase because they had to go on a physical road show to find these institutional in their random cities and promote the company's stock in real life. But now these roadshow pitches for Airbnb and DoorDash, they happened over Zoom. So they didn't need to do these transcontinental first class flights to pitch the companies. The second reason we're seeing so many IPOs, companies want to strike while the stock market is hot. That's right, Airbnb and DoorDash are debuting when stocks are at their most desired by investors right now. The tech heavy NASDAQ composite index is at a record high and investors are just dying to get their hands on

tech stocks. Third and final reason is that the company's IPOing right now really tend to be battle-tested pandemic winners. Airbnb, for instance, was forced to lay off 25% of the workers in April on the painful travel drought. But it has bounced back since then. DoorDash delivery people, they were labeled frontline workers. They're essential workers during the pandemic. They've been bouncing all of 2020. Investors think that customers won't forget how to Airbnb and DoorDash, even when the pandemic is behind us. For our second story, Starbucks, Just jumped 5%. The stock hit an all-time high after its investor day yesterday. We're looking at the return of the routine.

Okay, before we jump into this, honestly. First, great observation, Jack and I noticed from this thing, Jack, the honors. Cold brew, so hot right now. Damn Hansel. Cold beverage sales at Starbucks is up 45% in just four years. All right, and then you're ready for this one, Snackers? You're going to want to take a seat when you hear this. Pumpkin Cold Brew just outsold Pumpkin Spice Latte.

for the first time ever. Classic 2020. Oh my God. That's so true. No precedent for this one, Jack. They're also taking oat milk nationwide so that you have a dairy alternative as a creamer. And you know what? They're going to tie this in with cold stuff because it sounds well. They're whipping up a shaken, cold, oat, milk, brown sugar concoction. That is going to be the secret Starbucks drink of 2021. What is shaken? It's like when you go, shh, shh, shh, no, I understand. Thank you. The real highlight, though, is Starbucks's plan to quadruple down on physical stores. Jack, when you say quadruple down, is that like a double-double? It's, no, it's different. It's different. Snackers. Jack and I found this fascinating. Get this.

Starbucks is going to add 22,000 stores over the next 10 years. That is wild. Oh, you need some context? Well, there's 39,000 McDonald's globally and 44,000 subway sandwich restaurants globally. That's like the biggest chain in the world. But Starbucks is going to have 55,000 locations by the year 2030. The challenge here is that one Starbucks store does

fit all neighborhoods. Jack, you said it perfectly. We got like a Goldilocks situation here. Standard might be like too big or too small or it might be too slow or too fast for all the customers who may be living in your, you know, maybe on the Upper East Side. Starbucks's solution, we're calling it canvassing, whipping up a diversity of store concepts for different neighborhood needs. Okay, you got a whole variety of options here. Jack, first, how about the Starbucks roastery store? This is your Willy Wonka theme park store with like coffee water slides, basically. Yes, it is. You're going to want to bring multiple cameras to this thing. Then you another option here. You got the Starbucks

Reserve stores. For your Java Snob, who wants the rare virgin Ethiopian. Jack. Arabica. It's Arabica. And then you got the Starbucks pickup stores. Now, Starbucks, as of yesterday, is going to rebrand these. They're calling these

walkthroughs. Right. It's like a drive-through Burger King, but there's no chassis involved. No car involved. Just your feet. But then finally, another option here, and you haven't seen this yet, Snackers. It's new. Starbucks Now. You can only order on your mobile phone and you've got to pick it up and go fast. If the other one is a walkthrough, this is a run past. And they only have these Starbucks Now stores in China right now. So when we're looking at all these options, you got one for tourists, one for big spenders, one for commuters, and one for us basic people. One size does not fit all. No. So canvassing, Jack and I like to call it canvassing, that is the secret to how you don't cannibalize yourself when it comes to retail. Now I'm picturing Cosmo Cramer handing the runners in the marathon and coffee.

So Jack, what's the takeaway for our buddies over at Starbucks? This is our first glimpse of the return to the routine. Snackers, you got Zoom, Slack, Peloton, NASDAQ, tech, more tech, more tech, e-commerce, Amazon, the list goes on. 2020 was all about pandemic pivots and tech everywhere. It was just all 2020. But Starbucks doesn't think that the world is all quarantines, work from home, and digital forever.

It's planning today for the return to normal that we. We hope he's coming soon. That's right. Starbucks's Investor Day, Jack and I think this is the first major look beyond the coronavirus that we've seen out of a public company. From pandemic pivots to the return of the routine. For our third and final story, AT&T made one huge mistake. So now it's making one huge trade.

That's right, Jack. What is it? Your TV for your phone. Now, Snackers, AT&T, it is not a phone company. Don't think of it as a phone company. Don't even call to utility. They hate that. It is a media.

monstrosity. It owns HBO, TBS, Warner Brothers, CNN, TNT, New Line Cinema, Batman, DC Comics. Yeah, they did wedding crashes. Oh, by the way, remember the yellow pages or anything with a bell in its name? Although that's owned by AT&T. Oh, it also owns DirecTV, the massive satellite-like cable thing. Must be nice. But here's the new Snackers. AT&T just got a bid to sell that DirecTV business that it owns. for a cool $15 billion must be nice. 15 billion sounds like a lot. Only problem,

they acquired DirecTV just five years ago for four times that. 66 billion is what they paid to get it. So basically they spent six lifts and now they're selling it for one lift. It's not a good return on lifts. No, it's not a good return on lifts,

the whole ROL. But Snackers, if you're curious why this wasn't a good ROL, it's actually a pretty simple phenomenon. Media is focused on the streaming wars, not the satellite beaming wars. That's right, Snackers. You cut the cord and probably dish the ditch.

That's what's going on. That's why Netflix stock is up 50% this year as it dominates the streaming wars. AT&T is down 20%. And that's when Jack and I wanted to jump in snack style. But there is more to the story. AT&T is selling direct TV out of desperation. Get this Snackers, Jack and I were blown away by it. Half of the profit for AT&T comes from its wireless business.

AT&T loves that you are snacking this. podcast through your mobile phone and using up their wireless service. And so when AT&T is looking at its business, it's saying, hey, media had cord cutting, which was like a transformation for the cable industry. But wireless is having 5G, which is an evolution of the wireless industry. And that 5G is critical. That's the big, like, new fancy, sexy network you keep hearing about. It's like, it's going to be powerful enough to, like, connect your car to your grocery,

to self-drive to the grocery store to pick up your food and bring it back all digitally. I actually heard a tangible real-life use case for 5G. If you're talking to someone and you can't speak their language, hold their phone up to them, put your AirPods in, and your phone will real-time translate it for you word for word into your ears. This is the magic of 5G. Don'te'Astá El Aeroperto. They're going to answer you before you even ask the question, Jack.

But to offer that 5G network that customers crave, that's going to cost AT&T billions of dollars. That's right. So, Jack, what's the takeaway for our buddies over at AT&T? This AT&T dilemma shows how badly cash continues to be king. Perfect time in a sell-off direct TV because right now, there is literally a government auction going on this week where the FCC is selling off coveted C-band airwaves.

Sea-band airwaves. That's the stuff you're not finding on AM or FM. And those are the satellites that make 5G possible. And Verizon, T-Mobile, AT&T, they all want some of those satellites. These are U.S. government-owned satellites. and the U.S. government is leasing out bandwidth for 5G to these wireless customers. But here's the problem, Snackers. AT&T has like an insane amount of debt on its hands.

$160 billion of corporate IOUs, and they can't borrow anymore. They're maxed out. And the reason they've got so much debt is because they borrowed all this money to buy DirecTV and Batman and all that other good stuff. So now they're willing to sell off DirecTV at a huge loss, a terribly negative ROI, because they need cash fast. Jack, they can't call JG Wentworth on this one. They need the billions now.

AT&T may be a $223 billion company, but its future depends on your enjoying iPhone 5G through AT&T wireless. And it turns out offering 5G requires billions in cash right now. Jack, and you'll whip up the takeaways for us before the weekend. Airbnb and DoorDash just enjoyed double doubles with onions and aside of coke. We're talking pandemic survivors, perhaps even thrivers. For our second story, Starbucks has a different.

Starbucks store for every neighborhood. We're talking 22,000 more Starbucks coming your way thanks to canvassing. For our third and file story, AT&T needs billions in cash right now. Cash is king, so it's desperately selling direct TV at loss. Do you want, do you want, I do not want direct TV? Do you want? No. Yeah, you don't want direct TV. Now, time for our snack fact. This one tweeted in by Marillo Ramulo over in Brazil. If you are a Canuck north of the border in Canada, you can send a letter to Santa at the North Pole. Now, here's the same. a key, though. You got to make the address out to H-O-H-O-H-O-H-O.

Ho-ho, Ho, Canada. That's all you got to write. And you will receive a letter back from Santa Claus himself. But the reason we're doing the snack fact right now, this is the last day to guarantee he responds in time. The real snack fact, however, the North Pole is apparently in Canada. I wasn't sure, like, you know,

who technically, you know, owned that up there. Actually, they don't. It shifts. It's somewhere in the Arctic elsewhere. Does Santa Claus have a Canadian passport? I think you have to write to him to find out. Snackers, that was a great one. Happy Friday. Have a great weekend. We're going to miss it. We miss it already. And before we go, Snackers, big happy birthday to Jacks, my friend, Dan Katz, over in New York City. If you see Dan, make a big show of it and say happy birthday to him.

He'll really love it. He's going to love it. And happy birthday to Mike Wang over in Melbourne, Australia. And Jeff Weber, this Sunday, happy birthday in Rochester, New York. And Xavier Pemberton and Avon, Indiana. And Catherine Skinner in Corvallis, Oregon. And Josh Taylor. in the Bronx, and Jill Tedge in Bakersville, California, and Betty Benavides and Taylor Marshall over in Chicago doing logistics. And Heather Kim in Atlanta, and Andrew Tan in Fremont, and A.T.N. Salome in Troy, New York. And Chris Born off in Spokane, Washington. And Amy Avon in Strongsville, Ohio.

And Hunter Paul Wood in West Virginia. And John Heiser in Denver, Colorado. And big congrats to Josh and Norali just had their first child on the Upper East Side. Hope was Lenox Hill, by the way. I'm a fellow Lenox Hill baby. Happy anniversary to John and Odalaz in Tallahassee, Florida. And Carly Lynchenberg from San Francisco just got it to stand for B School. Big congrats.

And Shreana, I know you're going through final exams over in Chicago. You're going to get through it. You're going to ace the test. You're going to do great. This is Jack. I own stock of Amazon and Nick and I both own stock of Airbnb. 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, Inc. 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.