The Best One Yet - “Amazon cancels Mother’s Day” — Blue Jeans “One & Only” product. BlackRock tiny fee = huge profits. Amazon’s killing its best sales tricks.

Episode Date: April 17, 2020

While you were mid-Zooming, rival Blue Jeans was just acquired by Verizon — but we hope it can stay focused on being a “one and only” business. Amazon’s new strategy is all about reversing its old one — it wants you buying less. And BlackRock’s profit puppy takes a really tiny fee on an enormous ocean of money.Learn 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, April 17. Happy Friday, but Snackers, we have a one commandment to start this off with. Forget the Dow, forget the S&P 500. We whipped up two numbers that you definitely need to know today above everything else. The first number is 5 million. That is the number of Americans who filed for unemployment last week. The next number is 22 million, which is the total number who have filed for unemployment claims in just the last four weeks. is a truly devastating economic moment we're in, and we can't forget about that. But we're going to pivot and make this the best podcast yet because that's what we do every day. It is a straight-up T-boy so much better than yesterday's snacks, Daily Check. What's our first story over here?

Kicking it off with a fun fact, Mother's Day has more phone calls made in America than any other day of the year. Quick reminder, it's May 10th, circle your calendars. Nick, Mother's Day is also when Amazon nudges you to buy extra things in sneaky ways. That's until this year, because it's under so much pressure right now, it is literally nudging you to buy fewer things. We are looking at the Amazon e-commerce crisis that's happening. It is wild what they're doing right now. It's anti-Amazon. Jack's second story. Blue jeans is like Zoom's dressed up sibling who's got a better 401k. It's a little bit older and it just got acquired. Zoom's video conference rival hasn't got much attention. But we're looking at It's gorgeous one and only business strategy.

As in, you're my one and only. Third and final story, the $7 trillion financial company BlackRock. Yep. Just reported earnings, but we're going to play with its profit puppy instead. Hello, I shares. Good boy, I shares. You're a good little boy, I shares. Who's a good boy?

It's adorable. You just got to scratch it right there. I shares shows how the tiniest little fee can go a really long way on Wall Street. Small bite, really huge pie. But before we get to those stories, yesterday, Snackers, we had some notable action in the Snacks Madness Bracket that's going on on Twitter. Atta nowhere, Tesla's Model 3 defeated the J.P. Morgan Chase Sapphire car. Didn't see this one coming. Model 3 not only won. It was a blowout victory. The church of Elon is a really strong potentially cult-like church.

And our last quarterfinal matchup in our product-inspired March Madness-style bracket tournament is Apple AirPods. Yeah. versus Spotify podcasts. This is a straight up existential crisis. I don't know where you land on this one. You're listening to Snacks Daily on Spotify, but you're listening with AirPods. It is literally a meta-matchup. It's kind of like a chicken and egg problem going on. Did your ears hear it through the AirPods first? Or do you hear us through Spotify first? Are you listening to Spotify or you're listening to AirPods? Which one touches you more? I can't tell. One is sound waves. One is like physical waves. This is like Yankees versus Dodgers 77 World Series.

Kind of feels like Rangers versus Devils 94. Or more apropro the Great British Bankoff Season 3 finale. You can't discount a good kugam on in that one. This week, when you look back on what you've accomplished in the week, this could be it. You could determine if Apple or Spotify move on to the final four in Snacks Madness. And all you have to do to feel accomplished is vote at Robin Hood Snacks, Apple, or Spotify, on Twitter. Let's get to our three stories. We spoke to the lawyers and we got to get something legal out the way.

It's snacks about the hearing 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. Right.

Snacks is digestible. Business news for you. Robohood Financial, LLC, member Fenra slash SIPC. For our first story, Amazon just de-Amazoned itself. The e-commerce legend's new goal is to get you to not buy things. This is just like the annexation of Puerto Rico football play, or it's better known sibling, the Fumble Ruski. The play is so crazy, it just might work.

Jack, this thing just may work over here. First of all, Amazon stock is at a record high because of so much unexpected demand happening right now. We feel you snackers. You order the dried mango packet, the crocs knockoff sandals, the magnesium-infused foam roller, and you're waiting. There's one problem, though, Amazon can't fulfill all those orders. You check the app, boom, they're not arriving until May 27th. Would you like this to arrive May 27th or June 38, 2022?

Amazon's secret internal speed team is trying to deal with this delivery crisis. They think it'll be two months before delivery times return to normal. First of all, great name for an internal team. Secondly, the company is splurging $500 million to increase warehouse worker pay. And it's hiring 175,000 more warehouse workers, which is like four lifts. We did the calculation for you. But here's the thing that Jack and I found so fascinating about what Amazon's up to right now. It is D-Amazoning itself.

It is retooling every part of its website to nudge you to buy fewer things on Amazon.com. And of course, we got the whiteboard out and whipped up a few. few examples for you. For example, Mother's Day chocolate or Father's Day sneaker promos that you're used to seeing on Amazon? Those annual sales boosting events, they're canceled this year. Boom. Done. How about Prime Day in midsummer, the shop-a-palooza we all wait for? Indefinitely postponed by Amazon. And how about the ads on Google that push you to buy the shakeweight at Amazon.com instead of on Shakewake's website? Hashtag canceled. Not happening. And by the way, we're looking at this. We're kind of expecting Amazon to start sending us like push notifications straight to our cell phone.

right now. John, we see her on Amazon looking for a tie-d-d-shirt. Here's how to do a tie-d-shirt at home. And definitely do not click on this or go to our website. So, Jack, what's the takeaway for our buddies over at Amazon? This highlights the power of Amazon's greatest trick, the recommended upsell. Stackers, that is the secret formula to retail profits online. Old school retail trapped you by the checkout with magazines, candy, and gum that you weren't planning on buying and had no intention to buy. New school retail is a lot more digital. and it's using recommendation widgets to get your money. Since you bought this jigsaw puzzle, John, would you like to buy these sweatpants?

First of all, John sounds like a great guy. Amazon is shockingly removing these recommendation widgets, so you're not going to see them on the site anymore. Hey, John, before you check out, other people our algorithm thinks you're friends with also bought Twister. John's like, you don't know me, but you think you know me. This is a shocking statistic about Amazon's recommendation. Snackers, we just got to say, one second, you're going to be blown away by this statistic. let's say 10 bagillion things are bought on Amazon per year.

35% of those 10 bagillion things were based on an algorithm recommendation. That's right. 35% of what you buy on Amazon came from a recommendation from Amazon. And Amazon is turning off that recommendation feature, which could potentially reduce sales by 35%. The fact that they're doing that shows how ridiculously intense this moment is that Amazon's facing. And it highlights how powerful,

Data-powered recommendations can be. For our second story, BlackRock's earnings show how unique and adorable its profit puppy is. It turns an incredibly small, tiny little fee into a billion dollars. It's actually like a very cool magic trick. Now, Snackers, check your 401K or check your brokerage account. We'll give you a couple seconds to do so. Chances are you've got some money in a Black Rock fund. And you didn't even know.

And by the way, Black Rock, not to be confused with Blackstone, which is a geologically relevant but similar and different private equity company. No, no, no. Blackstone and BlackRock are like the original raise and the famous raise of finance. You don't want to walk around the Upper East Side making that mistake. You could get hurt. Turns out Black Rock was spun out of Blackstone in 1992, leaving us with like 30 years of confusion. If so facto, they decided to make things hard for everyone who wasn't paying attention. This story, though, is about Black Rock, which builds investment funds that you, me, Nick, Jack, and everybody can invest in.

At the end of 2019, Black Rock had a cool $7.5 trillion with a T dollars worth of investments it was managing. But yesterday, it announced its first quarter earnings, so it told us at the end of March, aka the end of the first quarter, it only had $6.5 trillion under management. If you're wondering where that little T trillion went, it's because Black Rock's quarter suffered with the shocker,

investments falling because the stock market dropped. That's right. A lot of stocks fell in value, and a lot of customers withdrew money from, funds that Black Rock had so they could have cash instead. But as Jack and I were jumping and snacks out to this earnings report, we could not look away. You can't look away when you find Black Rock's profit puppy, the I Shares. Who's a good boy? Scratch it right there, Jack. Scratch the guy right there. There you go, I Shares. So I Shares is a ETF brand. And an ETF is the

smoothie of the investing world. It stands for exchange traded fund. It's almost like a mutual fund that's trading on an exchange. Say you want to buy some stocks. You could buy some Disney, some Netflix, some Roku, and then finally at the end for dessert, some Viacom. Or you could just potentially buy a media ETF, which would be like a smoothie of stocks that are focused on the media space. And since BlackRock is offering such a convenient way to consume a smoothie worth of stocks, BlackRock and other ETF companies take a tiny, tiny percentage fee. Very similar to a mutual fund, but unlike a mutual fund, they actually. actually trade on exchanges. So Jack, what's the takeaway for our buddies over at BlackRock? That tiny little

percentage fee adds up to billions of dollars of profits. Snackers, here is the fun thing about finance that Jack and I have found from years working in finance. A tiny fee applied to oceans of money is a lot of money. Get this. BlackRock made $800 million of profits last quarter. Big. By managing $6.4 trillion of money. It's about a tenth of a lift. Now that comes out to 0.0.0 5% fee on all the trillions that Black Rock's managing. That's right. 0.05%. It's so tiny, it didn't even make the footnote. 0.05% of each dollar invested by you, me, or us, becomes Black Rock's profit margin. By the way, I feel like you just insulted footnotes. But here's the thing about finance. Most of the industry makes money by taking a tiny little

bite out of an enormous pie of money. And that is why your buddies in finance argue over zero 0.0001% tip on the bill. Even at a restaurant, it could probably be worth billions. Snackers, we've reached that little past halfway moment. So if you're on a snacks challenge, turn around. Time to jog home. For our third and final story, Zoom's better dressed rival is blue jeans. And Verizon just acquired blue jeans.

We looked into this further. They didn't announce the price, but PFWTM, say it was around 400 million bucks. People familiar with the matter. life goal, you'll want to be one of them. Also, Derek Jeter was a big investor in blue jeans. The most successful thing he's done since hitting a dinger on his 3,000 pit. We know you're listening, Big D, and congratulations to you. Now, Zoom dominates the video conference dance floor right now, but it's not the only one making moves. You got Cisco WebEx, you got Skype, you got Google Hangouts, and don't forget that cute little house party app. You can't forget house party,

but you also can't forget Blue Jeans, which was founded in 2009, and it's passionate about video conferences. Blue Jeans only has 15,000 customers, though, and there's no free version. You got to pay. Meanwhile, it's rival over at Zoom. Search to 200 million users. It's become a verb, and Zoom's the thing your mom's using to, like, meet up with her friends for a happy hour on Fridays from high school. So, Nick, I got to ask, why are there 13,000 zoomers for each one Blue Jeans user? It's a fantastic. Fantastic question. Jack and I jumped into it. And it's because Blue Jeans sounds really casual, but it's actually not casual at all. It's obsessed with work. It's incredibly obsessed with work. It's so obsessed with work we think they should rename itself khakis. They really need to rename their company khakis. And that's because Blue Jeans only works with other

businesses. It brags that Facebook, National Geographic, Grubhub, My Very Own University of Michigan, Nick's very own Wharton School of Business, they're all Blue Jeans customers. This company is passionately focusing all of its energy on doing what offices need for video conferences doesn't really care as much about consumers and what you need. Case and point, has your weekly accounting meeting been Zoom bombed by some naked dude? Well, first of all, impressive that the naked dude got in. Secondly, though, Zoom is not end-to-end encrypted. Blue Jeans, it's been end-to-end encrypted since like before encryption was a thing.

Blue Jeans is a no-naked dude zone. If you're trying to compare the two, basically Zoom's got a Bitcoin. It's sexy, but it's pretty unstable, actually. And Blue Jeans has a 401K Blue Chip bonds, and it pleats its pants. Very unsexy, but stable and safer. Now, if you're curious about why this acquisition went down, it's all about Verizon's 5G futuristic network. 5G is thinking about how they can incorporate video conferencing into the future of telecom.

And that's why Verizon did it. So, Jack, what's the takeaway for our buddies video conferencing over at Blue Jeans and Zoom? Zoom is a one and only company, and that is precious. Zoom does one thing, one thing only, and it does that one thing really, really well. Video conferencing. Zoom puts its best people at Zoom on video conferencing, the core and only one product. Snackers, when you're comparing Zoom with Blue Jeans, Zoom is the rare steak knife in a Swiss Army knife world. Now, Blue Jeans has been, since it's founding a one and only company.

True. But now it's one of many as part of the job. gigantic Verizon Corporation. It is no longer a one and only company because it's part of Verizon. You know who else used to be a one and only company? Jack, I think you're thinking of our buddies over at Skype. Microsoft acquired Skype in 2011. Everybody at some point had a Skype account, but no one is using it right now when you probably should be using it the most. It's the perfect moment for Skyping, but as part of Microsoft, Skype got completely neglected and totally fell off the earth. We're wondering, will blue jeans suffer the same fate at Verizon? Jack and you'll whip up the

takeaways for us over there before the weekend. Mid-coron economy, Amazon's e-commerce system is overwhelmed. So it's ending its sales boosting tricks like the infamous recommendation widget. That thing's a classic. Nick, I think you'd like Twister. Our second story, Black Rock takes a really tiny bite of an enormous pot. The beauty of finance, a 0.05% fee can become. an $800 million profit. That's adorable. Not too shabby. Our third and final story, Blue jeans is the mature version of Zoom that ironically wear slacks only. It used to be a one and only company. Now it's just one of many over at Verizon. Should be called khakis. Time for our snack fact of the day. This one sent in based on yesterday's stories from Mr. Aaron Lipman over in

Buffalo, New York, who was doing a little extra reading this spring semester. He noticed in a case study from the famous Harvard Business School that in June 2007, Steve Jobs, ever heard of him, Nick? Ever heard of him. He said, as CEO of Apple, if you don't cannibalize yourself, somebody else will. Boom, we were talking about Apple's new phone and whether there was a risk of a cannibalizing himself, probably not a problem. I got to say, it sounds like a phenomenal product, and it sounds like Steve Jobs would be proud. Sounds like they meant to do it the entire time. Before we go, happy birthday to Matt Lowe from Boston, Massachusetts. brother Alex gave us the heads up, said you're a big time snacker. We thought this would be the perfect

timing, you know, because it's your birthday. Now you owe us a snack fact. We expect it before the Red Sox kick off their opening day. Snackers, fantastic being with you this week. You all look incredible, by the way. I cannot wait to be back with you on Monday. Have a great weekend. This is Jack. I own stock of Amazon, Blackstone, and Spotify, and Nick's got a Bitcoin named Ben. 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.