The Best One Yet - “Amazon’s 2nd puberty” — Bezos quits. Uber’s $1.1B Drizly drank. Why GameStop stock halted.

Episode Date: February 3, 2021

Jeff Bezos is stepping down as Amazon CEO because of 1 word: “yawn.” Uber splurges $1.1B for Drizly’s booze delivery because there’s an alcohol arbitrage opportunity. And GamesStop’s stock re-pop dropped, so we’re looking at why trading gets halted on stock markets.$UBER $AMZNGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Robinhood’s statement on yesterday’s news: https://blog.robinhood.com/news/2021/2/1/a-letter-to-our-robinhood-communityLearn 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 Wednesday, February 3rd. Best podcast since yesterday? Yesterday. TBOI, Jack, the best one yet. What have we got first story? Bezos is out. The CEO of Amazon is stepping down. Jack, best part about this, he said it all came down to one thing. One word, yawning. All came down to yawning. And that's actually our takeaway. For our second story, GameStop, AMC, and all the other meme stocks crashed yesterday. So we're looking at the rare elusive trading hall that just became a. part of this whole story. For the third and final story, Uber is acquiring Boston-based booze delivery company Drizzly for $1.1 billion. We're getting Uber drinks. And funny, they

kind of waited until the end of dry January on this thing. You notice that? Last year, I had V-Ganuary and alcohol was actually crucial for me at that time. I remember because I saw you chasing after a squirrel on February 1st. It was brutal. But Snackers, before we jump into that wonderful mix of stories. We know a lot of people yesterday experience some financial pain. When it comes to GameStop's stock drop, yesterday the bubble burst, and we bet some snackers lost some money from that. And you know what? We can feel for you because Jack and I have been in exactly this place before Jack, thinking luck and coffee. We both invested in Luckin' Coffee, and on one day, the stock fell 80% to basically zero and Nick and I both suffered. It was brutal.

I remember we were speaking. It was last summer. And, And it's not fun losing money. It's never fun losing money. It's a scar and you end up sticking with that scar. Now, meme vesting has been a wild ride to experience the past few weeks, but it's also a dangerous one. Yeah, it's really a reminder, Snackers, that while it's like exciting to own part of a company when you own shares of that company, you can also lose some of your money. You can lose all of your money, the entire investment. And when investments are driven by hype, momentum, and social media, like so many of the stocks we've been talking about. It's true. Then it's extra risky in terms of the money you could lose. Also, the news of the past week on stock markets on trading restrictions and GameStop,

it's been really confusing to understand. We heard from you that you felt out of the loop about what was happening, and that's a shame. Yeah, especially when stock market news has never been more relevant than it is right now. 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. The snacks about to hear rain food. They don't reflect the views of the Robin Hood 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 FINRA slash SIPC. For our first story, Amazon announced big earnings with big round numbers.

But the bigger story, Jeff Bezos, is stepping down. fall as the CEO of Amazon. Big business. Jack, before we jump into it, let's focus on what are the big numbers we got out of this earnings? $126 billion of revenue last quarter, which eclips the arbitrarily round $100 billion for the first time ever. Jack, I love this. By the way, Snackers, a little context to sprinkle on here, that is a nearly 50% jump in revenue over the last year, Amazon's biggest quarter ever. For a trillion-dollar company to grow by 50% year over year, is, insane. Yeah, it's not common. Doesn't happen. Apple didn't just do that. By the way, profits, Jack, what kind of numbers we're talking about here? Nick, it's like the biggest kid in your

seventh grade class going through another puberty. Makes sense then that Amazon brought in a cool $7 billion to profit over the holidays more than double last year too. But the bigger news, after 27 years later, Jeff Bezos is stepping down as CEO of Amazon. Now, nobody saw this coming. Jeff Bezos is going to step down in the third quarter. He's going to become the chairman, and the head of Amazon Web Services will become the CEO of Amazon. And as chairman, Jeff Bezos will basically be the boss of the new CEO of Amazon. He's going to be the boss's boss. Now, what is Jeff going to be doing after that?

He says he's going to focus on, quote, unquote, new products and early initiatives. Model airplanes? Is going to build model airplanes? It's like a cough, cough, space, space situation. He's going to build Amazon Prime Galaxy. Yeah, Prime Galaxy. Because he's a man of many hobbies. I mean, this is a guy who owns Blue Origin Rockets, so he owns a rocket company. He also owns the Washington Post for journalism. And he's rumored to buy an NFL team because, you know, why not round out the billionaire

hat trick? Owning an NFL team is American royalty. So Jack and I were looking back and reflecting on Jeff Bezos after covering him over the last decade. And if we'd to sum him up in his 27 years, it's part villain, part hero. You could argue he's a villain because his business and e-commerce in general has destroyed Main Street America. Yeah, the corner hardware stores, it's just, they can't compete, and it's worth supporting them, by the way. You should shop there. Also, his reputation with labor unions, yeah, weak to quite week. Yeah, we're going to round down on that one. On the other hand, you could argue that Jeff Bezos is kind of a hero because he has, you know, completely changed the way we live. Those annoying weekend errand runs,

those have been eliminated thanks to Amazon.com. Two to six p.m., Jack, we're going to get to Best Buy. I just don't know if we're going to have enough time. Also, yes, Jeff Bezos and Amazon have killed a whole bunch of mom and pop shops, but they also pay employees at minimum $15 an hour. Go point. And they pledge to be carbon neutral by 2040, which is ambitious. So, Jack, what's the takeaway for our buddies over at Amazon? The yawn is the greatest compliment an inventor can receive. That's not our quote. That's actually Jeff Bezos's quote. It was his quote from yesterday at the earnings report when he announced he was finally leaving Amazon. The reason he's so obsessed with yawning is because if you do an invention right, then the

surprising new things you can do after that, they become the standard, the normal at some point. And you just yawn. And here's what's kind of funny is we saw this actually happened yesterday. Investors kind of yawned at the news that Jeff Bezos was leaving Amazon. The stock ended up up 1% after news that Jeff Bezos was stepping down. Investors were almost validating that Jeff was leaving. It's a sign that Wall Street is confident that the thing that Jeff built can stand and go on without it. The yawn, the greatest compliment an inventor can receive. For our second story, GameStop, AMC, and all the other meme stocks, they all crashed yesterday.

We are focused on why GameStop trading was halted five times yesterday by the stock exchanges. Okay, so yesterday, here's what goes down. Gamestock and a bunch of other Reddit-powered meme stocks, we noticed they all started falling big. After rising 2,000% in January, GameStop stock fell. by 60% yesterday. Okay, on Tuesday, game stock stock was $400. Yesterday, Jack, where did they end up? $90. And that's because the stock prices of meme stock snackers, they didn't rise on a foundation

of profits. They rose on a foundation of hype. So in response to like all this insane volatility, once again, trading of meme stocks was restricted by brokerages and exchanges on Tuesday. Now, the last time these stocks got restricted, we saw a broad confusion and anger because people didn't know why things were happening. So Jack and I wanted to break it down. So here is why the brokerages and the exchanges can decide to restrict trading of certain stocks. All right, first, the brokerages, they can set limits on

trading of certain super volatile stocks. Yeah, like since last week, certain brokerages have continued to ban or cap the amount of trading in certain stocks. Even through yesterday, Robin Hood continued to limit the buy orders of these meme stocks. that have become so popular. And by the way, reminder, this podcast, Snacks Daily is part of Robin Hood. Squares Cash app, another popular investing app, they began yesterday to halt the purchases of AMC and Nokia. Yeah, because of GameStop's stock gets the Wall Street Bet's treatment, then brokerages need

extra cash to process all those trades through the pipeline system. We talked about this on Monday's pop. Yeah, it's like plumbing. But yesterday something different happened. The New York Stock Exchange and the NASDAQ, they can step in to let. investors catch their breath and think during moments of market insanity. Yeah, now on the one hand, when there's like a huge overall market panic, they can just pause trading, buying and selling every trade for 15 minutes for the entire market. This happened four times in March when the

pandemic caused a major bear market in the stock markets. Now, that's with the whole market. But when a single stock is in free fall, they can also pause trading of that single stock for five minutes. And yesterday, the New York Stock Exchange, they halted trading of GameStop five times because the price was absolutely free-falling. Five times for at least five minutes each over the course of the day Tuesday. So, Jack, what's the takeaway for our buddies who are investors? The exchanges forced us yesterday to take a five-minute mindfulness meditation. Snackers, on Monday, Jack and I got the chat with you about why a brokerage might restrict trading of a particular meme stock. But Tuesday was different. It didn't matter what brokerage you had an account with. Nobody could

buy or sell GameStop when the exchanges had halted trading. And the reason, when a stock is in free fall, people tend to panic. You see people selling their stocks, so you sell your stock too. Yeah, panic selling isn't good, and then it could spread. It could spread from one stock to the rest of the entire stock market. Suddenly, McDonald's shares can start falling for no reason, just because AMC stock is plummeting. So here's what the exchanges think. With five minutes, just to think about it, investors can decide with reason what they want to do. It's basically like a five-minute mindfulness meditation in the middle of the stock market in insanity. So the exchanges, they halted trading of meme stocks so we could all stop and think for five minutes.

For our third and final story, Uber. Uber is dropping $1.1 billion to acquire booze delivery, Drizzly. This reveals the huge opportunity in online alcohol delivery. Yeah, it does. Now, Drizley, headquartered in Boston, you got Duncan, you got Dahlene, you got Driesley. You do. And they're all focused on the beverage industry. Look at that. Drizley, delivering alcohol in like 1,400 cities across the United States. I don't know if I'd call two pumps the beverage industry, but Drizley does last mile loggers. They'll deliver it right to your door. Yeah, they won't. Now, we know you're thinking, this isn't a backdoor situation. No, to all the underage snackers out there, they're going to check your ID. In fact, they won't even drop off the package unless they're there with an

ID. And I'll probably want to see a credit card too. Now, Jack, what would you say the competitive advantages for Drizzly? They have navigated complex state-specific nuance of liquor delivery laws. And they're in 15 states now. We're going to assume like more than half the team are lawyers. Now, the Uber situation, that was Drizley, but the Uber situation lately, it's kind of funny. Uber Eats has eaten Uber rides in the past year. Yeah, it has. And now Uber, Uber Eats is washing down that whole situation with Uber drinks. Snackers, in the fourth quarter, Uber's ride hail business dropped by 52% compared to the previous year. But get this, their Uber Eats, their food delivery division surged by nearly three times,

and now it's almost as big as Uber rides. Uber is more pastrami, less camera. Perfectly put, Jack. Now, they also just acquired another food delivery company. Uber just acquired Postmates to focus even more on food delivery. So Uber now has Postmates and Drizley, both of which they're going to keep as separate brands and separate companies. Now, we also think there are some like cross promotional opportunities though now, now that they're all under one hood. You order the risotto on Uber Eats and they might have a little pop up that says, ping, do you want to get a bottle of Pinot through our Drizley company?

On the other end of the spectrum, while they've been like doing more with Uber food, they're doing a whole lot less with Uber rides. They just sold their flying rides division and their self-driving taxi. ambitions. They're more interested in moving food and drink than they are human beings. Again, more pastrami, yes. Less Cameron. So Jack, what's the takeaway for our buddies over at Uber and Drizzly? Alcohol delivery is one of the last frontiers of e-commerce, and we think cities and states should welcome it. Okay, some wild numbers from the last year, Snackers. Overall, alcohol sales to consumers like outside bars, outside restaurants, those have jumped 24% in 2020. That's because people aren't in bars or restaurants, and that helped Drizley's sales.

jump by nearly quadruple. Yeah, even though they're only in 15 states so far. Now, post-pandemic, we notice that cities and states are going to need some new tax revenues. They've been losing a whole lot of tax revenues in the last year. To win back some tax revenues, states and cities have recently loosened laws on sports gambling to bring in new tax revenue. All right, so here's what Jack and I are thinking. These same cities and states should loosen up alcohol delivery rules, too, because they are so complex and so disparate. Snackers, I dare you to try to to send a bottle of whistle pig whiskey from California where you live to your buddy in Pennsylvania. The state of Pennsylvania will make you feel guilty about doing this. This is like contraband there.

You're going to be on the do not fly list. If those same cities and states could loosen up the laws around liquor delivery, then they could levy a whole new tax on online alcohol sales. And considering how much those sales are up, you probably wouldn't even notice. Drizzly is the startup that is prepared for e-commerce alcohol nationwide. And Uber has noticed the opportunity in e-commerce alcohol nationwide. Maybe states and cities will too. Jack, can you whip up the takeaways for us over there? Jeff Bezos founded Amazon with his ex-wife and been CEO since until the fall. And guess what? Investors, they yawned perfect send-off for Jeff.

For a second story, GameStop lost over half its value yesterday as momentum stalled. And the trading was halted several times to let investors catch their breath. For our third and final story, Uber just acquired Drizzly, the leader in booze delivery. Online alcohol, last frontier of e-commerce. Now, time for our snack fact of the day. This one, like, LinkedIn in, this one got sent via LinkedIn, Jack, by Mike Holmes, who is networking over in Boston, Massachusetts. Mike is highlighting Lisa Cook for Black History Month.

She is a black economist studying African-American innovation at Michigan State University. Yeah, one of just 20 black econ professors, and her focus, patent racism. 1899 is the peak year for patent filing. by black people per capita in the United States. Interestingly, blacks and whites have actually been filing for patents at roughly the same rate up until 1890, and then it all changed. After 1890, social disadvantages, like quality and access to libraries and schools, started hurting black innovators.

Plus, he got violence against blacks with like Jim Crow laws. Oppression clearly hurts ideas. Fewer patents, less innovation. By the way, if you're curious about patent racism, Professor Lisa Cook didn't interview on exactly that on the Planet Money podcast. Definitely check it out. One last thing, Snackers. We need a correction from yesterday's story. It's actually more of a crucial detail that we left out. Yeah, yesterday we covered slip-on Nike's, their new go-fly-ease shoe. It turns out the idea for this sneaker that you can slip on without needing her hands,

it was the idea of a guy named Matthew Walzer. Yeah, it turns out in 2012, Matthew was a 16-year-old who had cerebral policy. He wrote to Nike asking for sneakers that made things easier for people with a disability. Sererebral palsy stiffens the muscles in the body and makes shoe lace tying a huge pain. The other takeaway to the story, Matthew's idea became a reality with this shoe. Thanks to the handful of Snackers who pointed that out. That's today's pod Snackers H-Y-H-Y-S-D. Have you had your snacks daily? We'll see you tomorrow. If you know, you know. And before we go, happy birthday to Snacker Ashley Park over in Shanghai, China. Congratulations to Christina Cors who just started a company in Cincinnati, Ohio. Brendan Silverman just

got the new job in the financial district of Manhattan. Matt and Ellie, happy anniversary in Philadelphia. Happy birthday, Edison, Almeda in lovely Newton, Massachusetts. Garrett Tuck, great last name. My brother's name is Tuck. Happy birthday in Cincinnati. I guess this is technically his first name. Ali and Willie Cunningham twins, happy birthday in Colorado. Happy birthday to John Christopher Lopez in Rosedale, New York, and Taylor Keller in Denver. Happy birthday to Emily Machado, who apparently listened to 12 episodes in one day. in the Bay Area of California. Someone called the Guinness Book. And happy birthday to Jacob Gaiuegos in Happy Valley, Idaho. And Kevin Goulmer in Washington, D.C. And Sophia Zang in San Francisco.

And Maggie in Atlanta, Georgia. And Maria Del Mar and Madison, Lee Sote. Happy birthday in Gainesville, Florida. Happy birthday, Risu Hua in East Lansing, Michigan, home of Michigan State. And Mark Daniel over in Dallas. This is Jack. I own stock of Amazon and Nick own stock of square. 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 Robinhood 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.