The Best One Yet - 🏝 “$4M for fake land” — Virtual Real Estate. Buzzfeed’s stock. Capital One’s overdraft.

Episode Date: December 6, 2021

We just saw a record-setting $2.4M sale of a piece of land… land in the metaverse. Here are 10 reasons why Buzzfeed is going public today in an awkward way. And Capital One is ending its most hated of all fees: It’s killing the Overdraft Fee.$BZFD $COFGot 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. Welcome back, Snackers. It is Monday, December 6th. On Friday, we got the November jobs report. It was worse than expected. It was.

But today's Snacks Daily, it's better than expected. Today's is better. Today's pod is the best one yet. This is a TBOI. Jack, what do we got for our first story? BuzzFeed is finally going public today in a controversial specquisition. Snackers, tell us which Disney princess you are, and we'll tell you how BuzzFeed stocked it.

For our second story, a piece of real estate just sold for a record $4 million. Yeah, that is $4 million for virtual real estate in a virtual world with a virtual $600,000 yacht. Our third story is about the most hated fee of all fees, the overdraft fee. Voldemort of fees. It's worse than the fee fee fee. I hate the fee fee. We're looking at why Capital One just killed their overdraft fee. They killed that which we can't name and can't say. But Snackers, before we hit those three stories. This is, honestly, I was so excited about this.

Florida's Almanac, Week 90. Week 90, Jack and I have been keeping track for you things we're running out of because of the pandemic. Could you do us a favor? Could you go to your closet and cherish the beauty of your clothing that is hanging from those closet rods? Grab the clothes. Hold the clothes. Get them close to you because the next thing that we are running out of Snackers, Jack, the honors. Cloth hangers. We're running out of hangers. That's what we're running out. Soon, you're going to have to fold and put away all your clothes in drawers. It's the worst. Jack and I used to live in New York together. 14th Street. Great spot. Great spot, but there was no washer or dryer in the building. So we had to bring a giant bag of clothing weekly, like six blocks to a dry cleaner, which meant every week we

were also stuck with dozens of bags of metal hangers. We had so many extra hangers. But during the pandemic, people in New York stopped going to work. So they started wearing sweatpants instead. So dry cleaner sadly had to shut down, many of them just lost a lot of business. But now you're getting ready for the holiday party. You're thinking about busting out. the turtle neck. You better don't let that turtleneck wear you. You might be sending your dress to the dry cleaner. You might be sending the tucks to the tailor. Why not? Well, dry cleaners, they're like completely overwhelmed right now. They don't know how to handle all this demand. There's not enough hangers. So we know what you're thinking, you know, just order new wire hangers. They're classics. They're stuck on

the ship in China. How about the new plastic hangers? Go with some of those. They've been hoarded by everyone the past year. Jack, how about those velvet hangers? They're kind of sexy and they're kind of a pleasure. Those are just expensive. They are. You don't want to buy those dry cleaner snackers. They are begging you to bring back the extra hangers, people. You're trying to look your best this holiday season at Becky's holiday party. Yeah, these corduroys jack, they're wrinkled because I got no hangers. It's not a pleat. It's a predicament. Snackers, don't leave your dry cleaner hanging out to dry. Do your part. Hand in your hangers. Let's fold up our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something

illegal out the way. It snacks about to hear 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. Right. Snacks is digestible. Business news for you. Robberhood Financial LLC, member FINRA slash SIPC. For our first story, BuzzFeed is finally going public, but they're doing it in the least celebratory way ever. 26 ways for BuzzFeed's IPO to be a buzzkill. Actually, it's a SPAC, not an IPO. Jack, instead of an investment bank, they should have just done like a quiz to help them go public.

True. Well, BuzzFeed stock starts trading today under ticker symbol BZFD. Yeah, but they're not popping champagne. They're popping like, you know, the low-calorie Mardonnallies. The listing was clouded by a. worker strike at BuzzFeed. Yeah, BuzzFeed News staff. They're in amid contract negotiation, tough timing. Sixty-one members of the union at BuzzFeed News staged a day-long strike on BuzzFeed's big corporate day. But starting today, BuzzFeed is a publicly traded company and their next

shareholder vote is to determine which gossip girl character I am. Now, funny thing about today's BuzzFeed SPAC and all SPACs, yeah, this is wild. Investors of SPACs can cancel last second. They can just not do what they said they were going to do. Let us explain. In June, that's when conversations about the BuzzFeeds spec began. It was with a company called 895th Avenue Partners, brutal name, sounds more like an address, and they announced that they would acquire the media company BuzzFeed in December, which is now. Yeah, not just BuzzFeed, also Huffington Post and a couple other media brands. It was a package deal for new media startups to go public. So you could already buy the stock of this SPAC anytime this year, but today is when they were going to

to acquire BuzzFeed. Last week, though, there was a twist. Investors who already owned 895th Avenue partners, they started souring on the BuzzFeed. On Thursday, they all looked at each other. They're like, hey, are we doing this? Are we buying BuzzFeed? Is this going through, buddy? They voted yes.

They did decide to close the BuzzFeed acquisition. But 94% of the shareholders of 895th Avenue partners politely requested to get their money back. Okay. So Jack and I are scrolling through this all weekend. And we're looking at this and we're like, you know what? This SPAC situation, it's kind of like a hotel booking with an extremely flexible cancellation policy. You can cancel right up until the very moment you were scheduled to check in.

You literally did this the other week in New York, Jack. You were going to be at the downtown hotel and I'm pretty sure you ended up like four hours before you checked in at the one near Madison Square Park. I got a way better deal on hotel tonight. Jack literally did this. You're one of these SPAC people. There you go. So here's the situation for SPACs.

until the day the SPAC actually acquires its targeted company. The investors in that SPAC can just get out of the SPAC. And 94% of the investors in the SPAC that bought BuzzFeed, they asked for their money back rather than be BuzzFeed shareholders. It's just like Jack, last minute switching to the hotel with the free quesance at breakfast. And it was bad for BuzzFeed because they expected to get $250 million in cash from this deal. They only got $16 million because everyone canceled it. So this is what Jack and I find so fascinating about the BuzzFeed situation. Nobody talks about this with SPACs, that when you're closing deals with them, investors can just cancel.

It depends how excited the investors are about the company the SPAC ended up acquired. In fact, the New York Times pointed out that on average this year, 50% of SPAC investors redeemed their money pulling it out of the SPACs before the deal closed. For BuzzFeed, it was 94%. So, Jack, can you give us the top 10 reasons for the takeaway for our BuzzFECA? buddies over at BuzzFeed. This BuzzFeeds back. It sets the mood for all the digital news startups.

Snackers, ever since the internet, launching a news company has never been easier. But ever since the internet, running a news business has never been harder. And that's why a whole bunch of digital news startups who happen to have launched in the last 10 to 15 years are now looking for their exits. The investors of those startups, they want these companies to sell or IPO so they can cash out. Well, starting today, BuzzFeed's investors can now. exit through this SPAC deal, although they're doing it at a lower price than they probably hope for.

So BuzzFeed's digital new siblings, they're watching the deal and they're like, can BuzzFeed pull this off? I really hope BuzzFeed pulls this off. I mean, we're talking, Jack, Axios, the athletic, Vox, Atlantic, any other digital media news? Probably. Yeah, but I can't think of anything. They're all eagerly watching what happens to BuzzFeed today. It wasn't a pretty exit, but BuzzFeed exited. And that sets the mood for the other digital new startup. For our second story, Capital One is killing the overdraft fee. Why would a bank voluntarily kill one of their profit puppies? It's like the beginning of a murder mystery, Jack.

Can we talk about $60 billion capital one? That's four lifts, by the way. This is the first time we've covered them ever. There you go. In snacks. Capital One, walk on down. You're on snacks. There you go.

They're based in McLean, Virginia, and they love Samuel L. Jackson. What's in your wallet? What's in my wallet? You know what's in my wallet? Let me check. I got a, Jack, I got an insurance card, a driver's license, and like a receipt from UPS. Not Capital One, apparently. But this is a very standard banking business.

It's actually impressive how unsexy Capital One is. They got credit cards, bank accounts, they do loans, nothing outside the box. What's in your wallet, Capital One? That's what I wanted. But they voluntarily announced last week. They're voluntarily killing a business line that brings in $150 million of annual revenue. And that profit puppy is the overdraft. The overdraft fee.

The most egregious, aggressive Voldemorti of all the fees. I mean, can we even say it anymore? This is the fee that should not be named. It's the fee that when you have no money, the bank decides to take even more money that you don't have. Can we talk about Teddy? I mean, your little brother. This was insane.

This was insane. He had $9 in his local savings in loan. Humble brag. So he bought a $2 coffee, a $2 Mountain Dew and a $2 creaming. Okay. Breakfast to champions. He also bought a $9 meatball sub. At lunch, maybe, I guess.

So his $9 balance was enough for the first $3, $2 things. But it wasn't enough for the meatball sub. Okay. So brutal. He gets like a $35 overdraft fee. I'm trying to follow this. It's like a GMAT problem. No, no, no, no.

Oh. The banks decided to order his transactions to maximize the fees. So they did the meatball sub first. So he immediately went to zero. And then $2, $2, $2, $2, $2, all those transactions were new overdraft fees. No way. No way. The $15 of spending on three tiny things in a sub became $105 of overdraft.

And let me guess. At no point did they ever alert him that any of this was happening. And no point did you get a warning. No text. Oh, no. They can send you a 50 pounds of mail every month, but they can't tell you you're about to get charged in $100 fee. Every transaction he made after that's another $35.

Okay, so Teddy gets his meatball sub, but he also gets $100 in fees. So, Jack, what's the takeaway for our buddies who are the fee that should not be named? The overdraft fee became a corporate tax on the poor. And that's because this fee snackers, it's paid overwhelmingly by low-income Americans. That's why the Fed has required banks to offer an alternative for when accounts go into the negative. And that's why the Consumer Financial Protection Bureau, which is meant to protect consumers, is even investigating banks that charge overdraft fees in the first place. There's also like a really lovely alternative solution here to all of the factories. If you don't have the money, just decline the transaction.

Teddy, like, hate to say this, you're not going to get the meatball sub this time. I'm sorry, I'll make you one. Oh, yeah, Teddy would be like, oh, shoot, I'm out of money. I don't want to pay $105 for the sub. I know the sub he was probably going to get, but we'll get him on the next time. But the overdraft fee is still generating $15 billion a year for American banks in 2020. Get this, according to the New York Times, that breaks out to $40.37 cents in overdraft fees per bank account in America. And since wealthier bank account holders aren't getting these fees, it's probably even more. You know what I mean?

Yeah. So Capital One, they're getting rid of this because, as they say, to bring humanity to banking. And those are their PR constructed words. This is good PR. They also said they're the only one of the top 10 U.S. banks to completely get rid of it. Snackers, the overdraft fee. Still a profit puppy. but really a corporate tax on the poor. For our third and final story to kick off the week, Jack, we got ourselves a real estate record. Another one. But it wasn't real land or the real world. Yeah, it was.

It was virtual and in a virtual world. 2021. Great year to be hit in record real estate prices. We're seeing them everywhere. WSJ real estate section is blowing up with an Austin ranch, a Manhattan penthouse, a Montana ski chalet. Funny thing, though, last week we noticed. There's a patch of digital land that's getting some attention. It's located in the digital town of Decentraland.

Sounds lovely. I hear it's a great school system. And it sold last week for $2.4 million. That's right, Snackers. A record high price, $2.5 million for a patch of virtual digital land. That's thanks to a company called Republic Rail. Great name. Which calls itself a digital real estate firm.

They own 2,500 plots of virtual digital. virtual land in 19 different metaverses. And get this, someone just bought up 16 virtual acres of land in this virtual world. And they paid a million dollars for those 16 virtual acres. How many times are we going to say virtual this dog? I feel like we need to say that every time. I'm just going to keep saying it. Okay.

Sandbox is another open metaverse. They have 166,000 plots that they've like a virtual land built. And they've already sold 65% of those virtual plots. Yeah. And one of these plots we noticed, it's like right near the water, right near the virtual water, we should say, where someone just bought a yacht, a virtual yacht for $650,000. The next person who says shenanigans, I'm going to piss away. This thing has two helipads, a hole, a DJ booth. Virtual DJ booth, a virtual hall and virtual helipads.

All right. So these virtual real estate developers, they believe that they're building a virtual version of like Soho, New York or Silicon Valley. Zillow shareholders, I feel like we should be pushing Zillow to just do something. Zillow, just do more, do something like this, please, it feels like. These developers think their digital units will be in high demand and they'll be able to lease them to retailers. Exactly. Just like a real mall in real life, they would be doing this for a virtual mall in virtual life. Here's the thought. Retailers want to be in the metaverse because they need to meet the customer where the customer is. Exactly. So like in the year 2030, let's say you and your avatar is spending hours in the

metaverse, Adidas is going to want to store where you are in the Metaverse. So these real estate developers, like Republic Realm and Sandbox, they're putting their flag in the ground and they're telling Adidas, this is where you want to be. This is how you can sell Jack, those NFT sneakers or Teddy that NFT meatballs sub. This is the happening part of town. They want to be the first movers in the digital frontier, like, you know, buying Spot and Soho in New York in the year 1800s. So December's a nice time for this story because this is how all the crazy, like,

finance crypto stuff we've talked about this year comes together. Jack, I love how you set this stuff. Snackers, here's how this goes. Virtual you. Your avatar, the Metaverse. Bies virtual land. Like an acre of DeCentraland. In a 3D virtual world. Again, the Metaverse.

Using a cryptocurrency. Ethereum specifically. To build a virtual house or virtual store. Which is uniquely yours because it's an NFT. But like any emerging venture, this could also just be a complete bust. Yeah, this could be a huge. waste of real money on a fake virtual thing. $650,000 for a fake yacht. But these real estate developers, they don't think so because location.

Feels like a takeaway, Jack. So Jack, what is the takeaway for our buddies over in the virtual real estate world? This is a bet from these real estate developers that location will matter, even in limitless metaspase. Snackers, fundamental of economics. Scarcity is a key force that makes anything valuable. Funny because the metaverse in theory is just as limitless and expansive as the internet. And yet these real estate developers believe that location of real estate will matter in a fake world. Even though there's no scarcity in the metaverse, they think location will matter. They're thinking if they can get word out that their digital mall is cool and people will

actually go there, then people will actually go there. So think about how location could matter. Think about Westworld, the TV show. Like everyone started their virtual journey in the same virtual western town square. So think of this virtual town square is like the default website of a web browser where location matters. There's only one of those websites. What if Zuck makes everyone in his metaverse start by entering the same gate like Disneyland's style? Then location next to that virtual gate, it's going to matter. Location could still matter in a limitless meta world too.

Jack, can you whip up the takeaways for us over there? BuzzFeed has gone public via a SPAC. BuzzFeed today, they're setting the tone for other digital news startups. Overdraft fees are the worst. So Capital One is ending them. They become a financial tax on the poor. For our third and final story, the Metaverse has an emerging real estate sector. Because location, location, location could matter even in a limitless virtual world. Now, time for our snack fact of the day, which Jack, this actually has to do with,

remember before Thanksgiving, we covered that Reese's pie? The Reese's 9-inch peanut butter chocolate pie, the Reese's. So snacker Damien Reese, great last name, scrumptious, from Reno, He had a snack fact for us. He has an issue when people use this last name in the possessive. He does. What's up, snackers and peanut butter cup enthusiasts? This is Damian Reese from Reno, Nevada.

As a lifelong Reese, I thought I'd point out, the appropriate pronunciation of the candy's name is Reese's peanut butter cups, not Reese's. This was confirmed by H.B. Reese, the inventor of the peanut butter cup, that it still follows the boundaries of English language. with an apostrophe is. Hope your day is the best one yet. Damien, thanks for letting us know. We didn't know.

So our apologies to all Reese family members and all peanut butter chocolate indulgences everywhere. That is a first of its kind, snack fact. Snackers, you look fantastic, by the way. You probably sound fantastic too. So if you have a snack fact, you want to send us, we have got a link right in the description of this and every episode of the podcast.

It's a Google form. Super easy to upload an audio file or just send us something in text. In the meantime, Jack and I are going to go into our closets and, like, hug some hangers. Nick and I'll see you tomorrow. Have a great week. If you know, you know. And before we go, happy 64th birthday to the Burger King Whopper. Can't believe it's been 64th.

It's a big burger. It's a big number. And happy birthday to Vera in Atlanta, Georgia. And Paul G, turning 50 down in Lexington, South Carolina. Happy birthday to Madhu Priya, originally from Mumbai, now crushing it in California. And Jack, Tammy's got a new job in Southington, Connecticut. Kit, she's kicking it off this week. If anybody else is celebrating something today, make it a table. Celebrate the wins. This is Jack. Nick and I both own some Ethereum and we both

own stock of Zillah. Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors who are associated persons of Robin Hood Financial LLC and do not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates. They are meant for informational purposes only and are not a recommendation to buy or sell any security, cryptocurrency, or investment strategy in any account. This is not an offer or sale of a security, not a research report, and is not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robintoe Markets Inc., Robinto Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk, including loss of principle and

past performance, does not guarantee future results. Robin Hood Financial LLC, member Finra, SIPC. your wallet, Capital One. That's what I want to know.