The Best One Yet - 🧸 “Adorably rich bears” – Build-A-Bear’s 300% surge. Spotify’s ebook. Evergrande’s controlled implosion.

Episode Date: November 15, 2021

One of the best-performing stocks of 2021… is Build-A-Bear. Spotify just acquired an audiobook platform because the app wants you listening to 8-hours of Moby Dick. And we’re updating you on the Evergrande real estate disaster because a “global explosion” may become a “controlled implosion.”$BBW $SPOTGot 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. It is Monday, November 15th. This pod is the best one yet. It's a TVOI. Should we apologize, by the way, to the muffins?

We said a lot of negative things about muffins last week. I had a muffin today. And I was thinking about our comment last week that they're empty calories. It's not empty calories. Muffins, you are not empty calories. You are a whole grain goodness. You are a dessert in disguise. And for that, let's at our first story.

A top performing stock of 2021 is actually build a bear. Build a bear. Adorable build a bear. It is pioneering e-commerce 2.0, aka e-e-commerce. For our second story, Spotify is now an audiobook company, too.

But here's the thing. The end game for Spotify is always the ad. For our third and final story, Evergrand is the Chinese real estate giant that's on the brink of collapse. It hasn't been bailed out. It hasn't exploded. Evergrand is going through a controlled implosion.

But before we hit that wonderful mix, to start the week. Some engineer listening to this pod, Jack, is so excited right now. Oh, you mean like physical engineer, not computer science. Oh, yeah, yeah, the civic engineers. Yeah, exactly. They love a good controlled explosion. But what else we got today? Because this is fantastic. We're looking at hoarder's almanac week 87. Week 87, Horters Almanac. Jack and I have been keeping track of things. We're running out because of the pandemic. We come bearing good news this week. Yeah, this week, it's a little different. It's not a shortage. No. It's a surplus. Snackers, behold, the great avocado surplus of 2021. The Australian avocado industry is experiencing, and I quote, a massive supply glut.

That's right. Australia, they got too many avocados right now. Too much of the good fat is a great thing. According to the Washington Post, Australia has so much green gold right now that avocado prices have plummeted 60% in Australia. They're basically giving away avocados down there. Waiter, I don't want a side of avocado. I want an entree of avocado. Now, the reason avocados are in such excess supply. Because of the pandemic, people in Australia are not going back to brunch. Yeah. Less avocado toast with Bridget, if so facto means more unsmashed avocados. Australia's got so many avocados. They're looking for new countries to export them. So what we're telling these snackers is your next avocado salad. It could have come from the outback. That green goddess dressing might have been raised by a koala. So Jack, what is the

takeaway for our buddies over at avocado? Well, everyone's asking, is guac still extra? Snackers. Gwok is still extra and it is always extra. Because while avocado prices are down, cilantro, alpineo, tomato, salt, they're not down. Guac is always extra, baby. Let's hit our three stores. Let's hit. 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 rain 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 a offer. or sale of a security.

Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Bill DeBair, yes, that Bill DeBair is one of the, this is shocking, one of the top performing stocks of this year. We think Bill DeBair is a pioneer in the next stage of e-commerce. Okay, Jack, whip out thesaurus.com.

Build a bear, what adjectives are coming to your mind right now? What are you thinking? What's coming to you? Cuddly. Okay. Plush. What else we got? Fuzzy Wuzzy was a bear.

Fuzzy was he had no hair. Well, Build a Bear stock is a two-ton grizzly beast. That's right. The stock Builder Bear is up 300% this year. This thing is a money machine. This is the Logan Roy of the food chain. I mean, I told you I'm on episode three. I'm doing it, man.

Whole succession. Do I'm going to do the theme song again? I thought you did a great job the first time, but we should continue on. Build a bear is a 24-year-old company. Born and raised in St. Louis, they got 400 physical stores, and they're only worth about $300 million. It's one of the least valuable companies we've covered on this pod. But their stores are like indoor theme parks. Yeah, the physical experience of building the bear in Build a Bear, that's what gives Build a Bear life and evaluation.

It's a seven-step process if you go to Build a Bear like with your kids to build a bear. First, you're going to pick the furry friend. Then you're going to choose a sound and smell for that bear. And then you start buying a whole bunch of outfits, and that's not even the end of the process. That's when it gets fun. That's when you stuff the bear and it starts to like take its form and come to life. They even have a machine that will stuff cotton into it for you if you don't want to do it yourself. And then finally, they give you a birth certificate for the bear.

You can't do that in the metaverse. You can't do that. Now, selling you one bear, as you can see from that seven step process, it takes like a half day. It does. And the full attention of a store associate. But here's the problem. Kids, they haven't been vaccinated in the last year and a half. So the pandemic was very negative for physical sales at Build a Bear's 400 stores.

So Jack and I were fascinated by the big news from Build a Bear last week. Build a Bear is launching a 3D online workshop. And that shot the stock up another 10% last week. Build a bear. It is an aggressive two-ton grizzly bear. Now, you can already build a bear online. You can. But you're not building it.

You're just getting a bear. That baby Yoda bear, you sent me. That looked adorable. Would Wilder like that? I think you'd like it. Okay. Podfather Pentier. I can do that.

I love it. Maybe I'll send you two. You could already buy Build a Bear online, but now you can experience the store seven-step process online. If you go to this virtual shop, you're going to spend three minutes dragging digital cotton into a digital bear, and then you're going to watch the bear grow digitally. Then there's a heart ceremony where you bring the bear to life on screen. Their terms.

Not with deferbulators. Claire. It's alive. Please, sir. Why am I? Then you get the hear me station where you get to decide what is this bear going to be able to say when you squeeze its paw. Then you're going to squeeze the bear's paws. It'll start making sounds.

And you're like living with and interacting with this bear in the online shop. Then you watch a two minute video of the bear floating off with balloons into the sky to represent deliver. So this virtual build a bear shop is basically like a half day long video game. It's intense. Seven to 10 business days later, it's at your home. So Jack, what's the takeaway for our buddies, pining? hearing things over at Buildabair. The next stage of e-commerce is e-commerce, experiential e-commerce. Snackers, shopping online, it is focused on faster, smoother, more efficient, eliminate friction,

one-click checkout. But for some, the product is the experience. So you actually want to slow things down so people can enjoy it. Buildab bear doesn't want you to just drop a bear in a cart in one step and then check out in one minute. The reason you're splurging 50 bucks on a Buildabare bear, instead of like $10 on Amazon is the experience of building the bear. So this new Build a Bear initiative, it mimics the in-store experience of building a bear by delaying your online purchase. It's experiential e-commerce, and it might be the next stage of e-commerce. E-E Commerce.

For our second story, Spotify, they just acquired an audiobook company called Find Away. I'll tell you, Spotify's already taking on Apple and podcasts. Yeah, they are. Now I guess they're taking on Amazon. in audiobooks. What the heck? We'll just do it all at once. Well, Spotify said this with the announcement,

and it's also basically their mission statement. Spotify's ambition is to be the destination for all things audio. When Spotify started, listen on Spotify just meant listen to music. Yeah, that was it. Then it turned to podcasts, and now they're turning to books till. So Spotify's gone from Daddy Yankee to call her daddy to now,

call me Ishma. Okay, there we go. Let me give us a shot. Let me get this shot. They've gone from Joe Jonas in music to Joe Rogan in podcasting. Okay. To Joseph Conrad in writing. There we go.

Okay. It took me like six minutes to get my daddy, daddy call call. Somewhere ninth grade teacher, Mr. Monterra is very happy right now. So here's the deal. They're acquiring Findaway, a company based in Ohio, and the 325,000 audio books that come with Findaway. Now, Snackens, before you deep dive into the books, the books, they're probably not going to come included with your Spotify subscription. Right. So if you're paying 10 bucks a month for Spotify premium, we're guessing, although they

haven't clarified. They haven't said this. That you're going to have to pay like 10 more bucks to get a book. But when Jack and I are looking at the audio industry, here's what we're thinking. Not all audio is equal. Different sounds, different business models. Yeah. Music, for example, music is core to Spotify. But Spotify has to share their music revenues with the record labels. It does. And that's going to cost them some money. Podcasts are different. Spotify does not have to pay podcast creators. So they're lower costs with podcasts. And podcasts have ads, which Spotify can make money on. They're bringing in some revenues with pods. For audio books, Spotify hasn't explained how they're going to make

money, but they could take a cut of that $10 book sale of Moby Dick. Here's what we're thinking. The real benefit of an audiobook, it's just time. Time is the benefit. Moby Dick takes forever to listen to. Moby Dick, it's a little longer than snacks daily. Eight hours listening to The Chase for that whiteware. Yeah. Is a dense eight, hours in the Spotify app. Full disclosure. This is Nick and this is Jack. And we're on page like three of Moby Dick from 20 years ago. I've tried three times thrice. It's the run on sentences to tackle this white whale. I've never got past page 78. So Jack, what's the takeaway for our buddies over at Spotify? The end game for Spotify is ads. Snackers, of course, Spotify wants you

paying for Spotify premium. But subscriber revenue growth only grew 22% last quarter. Spotify's real growth is actually happening in the ad division while you're listening to Spotify. That's right. Spotify sells ads and plays them to listeners and ad revenue grew 75% last quarter. Well, perfect timing because Spotify is quietly building a Facebook style ad machine which would focus on targeted ads to your ears. So instead of the old school podcast ad, yeah, one ad for all read by the host, what do I got to do to get you into this mattress, mattress, mattress, mattress. Spotify has something different, dynamic ads. Different ads, targeting different listeners, just like Facebook does with its users. Because Spotify knows your age, your location, your gender, and what you listen to. They do. And that's plenty of data to target you with an

appropriate app. So the more time Spotify users like you guys spend in the app, like a 60 chapter Moby Dick book. Yeah, the more ads that Spotify can sell. That's why Spotify is doing music, podcasts, and audiobooks. Long audiobooks. Short ones too. For our third and final story, Jack doesn't want to talk about muffins. But last month, we told you how Evergrand, the real estate company, sounded kind of like Lehman Brothers. The Chinese real estate company hasn't sparked a global crisis yet. Yes. But the coast isn't clear. It was September 21st, and we were reporting that Evergrand was on the brink of bankruptcy, and that was a huge deal. It was a huge deal because Evergrand is the biggest real estate developer in the world. The hugest. With $300 billion of debt, they couldn't pay back.

With a B. And they were on the verge of default. And since, Since China is the biggest real estate developing country in the world, them falling apart could have sparked a global crisis. We said in September, it's not the splash, but the ripples that were worried about. Right, because the first thing Jack and I were thinking about is like when we were in college and you had Lehman Brothers falling apart in 2008. Lehman Brothers's bankruptcy was the splash. The ripples were the financial crisis, the great recession, and years and years of high unemployment that followed. Those were the ripples and they lasted for a long time. But there isn't a crisis like Lehman Brothers yet.

And the reason there isn't an Evergrand crisis yet is because China is not the USA. According to the Wall Street Journal, Evergrand is being taken apart slowly. Slowly. Because the Chinese central government in Beijing, they've effectively just taken control of Evergrand, again, the largest real estate company on planet Earth. And like we said, it's huge. So there were actually 200 cities in China with unfinished real estate projects. Like not just buildings. No, no, no, no.

Whole neighborhoods of residential buildings, and they're all incomplete. You got entire communities with nobody in them. At various stages of completion, but not ready to be lived in because Evergrand hasn't finished them. Now, here's what China's government did. Beijing ordered local task forces to just find some new company to take over those like unfinished Evergrand buildings in all these cities. In all 200 cities. So here's what's going to happen. Foreign investors who lent Evergrand a bunch of money are probably going to lose their money.

But things are not falling apart like they did in the financial system back in 2008. And the reason China can do all this is because China's president Xi has the power to act decisively and directly pretty aggressively. In the U.S., if the government forced a company to take over another company's bad real estate project, oh, you know what's going to happen. That company would sue. They'd say my constitutional rights are being violated. And they'd probably be right. But in China, it's a different story because in China, what president she wants, she gets.

So Jack, what's the takeaway for our buddies over at real estate giant Evergrand? Evergrand isn't a bailout. It's not an explosion either. It's a controlled implosion. Those are the Wall Street Journal's words because so far, Beijing has totally limited the Evergrand damage. Beijing hasn't bailed out Evergrand. Because that would set a bad precedent that companies can be reckless and not pay for the consequences. But Beijing also hasn't let Evergrand totally fall apart. Yeah, because that could crush investor confidence and then that would trigger a crisis. Instead, they are putting Evergrand through a controlled implosion.

Yeah, Jack, I mean, like picturing the kingdom in Seattle, Evergrand is just coming down. In the year 2000, the former home of the Seattle Mariners went through a controlled implosion. The whole stadium. You can watch it on YouTube. It's great. And the beautiful thing, the damage was contained. So far, what China's pulling off is the perfect balance, but it's definitely not over. We will keep you updated on further developments.

dot, dot, dot. Jack, can you whip up the takeaways to start the week for us? Build a bear is good, clean, family funding. Stock is up 300% this year, in part because it's pioneering experiential e-commerce. For our second story, Spotify, now is audiobooks too. The more the listening, the more the ad potential. For our third and final story, Evergrand, hasn't been bailed out, and it also hasn't exploded. What it's going through is a controlled implosion, like a stadium.

Now, time for our snack fact of the day. This one sent in by Eric Durham from lovely Melbourne, Florida. The most remote inhabited island on Earth. Like where you're going to be nowhere near any other humans, if you really want to get away. It's an island and it's 1,700 miles away from the closest piece of land. And people live there. It is farther from the mainland than any other island with people on the planet. We're talking, of course, about the island of Tristan Day Kuna, which is in the South Atlantic Ocean.

We're talking no airport on this thing. And if you want to visit, you're going to have to do like a six-day boat trip from Cape Town, South Africa. That is really hard to get to. And this is part of the British Empire. And there's only 264 people who live on that island. Okay. And we're not just saying this. It looks lovely.

It's quite a stunning mountain that comes out of the ocean. Probably because no one can get there to ruin it, which works out fantastically. Snackers, you'll look great to start the week. If you haven't yet, go up to click to follow us on Spotify or Apple. and drop a review. Five-star ratings. We'll take it. And Nick and I, we'll see you tomorrow. Can't we? And before we go, congratulations to snacker Matt Chappah, who just got a new job and has been listening to snacks every single day. He doesn't miss a day. Congrats to Sarah and Andrew, who are buying a house in San Diego. And Greg, happy new job at UBS in Boston.

Good luck to Vito Notre Nicola, who's taking exams in Chicago. And Willie and Taylor got a 10-year anniversary over in Madison, Ohio. Happy belated birthday to Adam Brink, the Earl of Sandwich, once in Nantucket, Lifeguard, always a Baltimore legend. This guy does wobble. Happy birthday to Logan Wade in sunny Florida. And high end win. Happy 25th in Honoi, Vietnam. Happy birthday to Stephanie in Akron, Ohio, the home of rubber. And happy birthday, Tim Pierce, down in Atlanta.

Or is Akron, Ohio, the home of tires? All I know is the logistics are going through Chicago. And happy birthday to Deirdre Corr and her. Dodge Challenger. Someone who Vin Diesel considers family. Anyone else celebrating today, make it a T-Bor. Celebrate the wins. This is Jack. Nick and I both own stock of Spotify. I own stock of Amazon. Nick own stock of Apple. 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, 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 on the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robin Hood Markets, Inc., Robin Hood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk, including loss of principal and past performance, does not guarantee future results. Robin Hood Financial LLC, member FINRA, SIPC. I'm actually reading Great Gatsby right now. which is ridiculously short.

It's like, I feel great about it. I'm like almost done. I know. I picked it up last week. I can't believe I complained about this, you know. Here's the thing. When you're reading great Gatsby now,

don't you want to turn to someone to be like, you know, there's symbolism here. There's a simile here. There's an analogy here.