The Best One Yet - 🧳 “An Escalade fits 60 Away suitcases” — iRobot’s makeover. Suburban’s biz class. FB’s non-decision on Trump.

Episode Date: May 6, 2021

We have 2 ideas for how iRobot can make itself over, because its Roomba vacuum isn’t living its best life. The Cadillac Escalade borrowed a strategy from the airlines (and that’s why GM’s stock jumped 4%). And Facebook’s mysterious Oversight Board just made a no-decision on the Trump ban, so we’re examining the Board.$IRBT $GM $FB $TWTRGot 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. It is Thursday, the new Friday, May 6th, baby. Snackers, a couple weeks ago, we talked about Peloton's dangerous treadmills. And we actually have a quick update for you on that story. Here's the update. They finally did decide to recall those treadmills because, you know, the kids and the fidoes out there were in danger when you were made a workout. Now that the recalls happened, we're going to repeat our takeaway from a couple weeks ago. First rule of crisis management overcorrect. First rule of podcasting. Make it a T-boy. Today's pot is our best one, yeah. For our first story, Rumba Maker I Robot. Should be dominating this house height moment right now. They really should. But they're not. No, so we got a two-part makeover plan, and it all begins with Rumba. For our second story, back to the 2000s rap scene.

Calac Escalades are why GM stock jumped 4% yesterday. Here's the thing, Jack, and I noticed. They took an idea from the airplanes, business class on wheels. 20-inch dub wheels. The third and final story, though. An ex- Danish prime minister, a journalist and a law professor, walk into a boss. Yep, and that is the beginning. getting of the Facebook oversight board, which decides whether to unbanned Trump's Facebook account

or not. But Snackers, before we hit those three fantastic stories, a wonderful, wonderful mix. Tuesday was May the 4th. It was, and Wednesday was Revenge of the 5th. Maybe you know, you know. But today we noticed the biggest thing since the Baby Yoda doll shortage of 2019. Get this, Snackers. Disney just launched a real-life lightsaber. A lightsaber. This is a highly technical product. Honestly, from the video we saw, we think it's going to be like a thousand dollars. If you have to ask, you can't afford it, and none of us want to ask. Now, not for sale yet.

Just the videos of this charming, deadly weapon toy is what you can see. And it does come standard with blaster bolts. True. And the crystal chamber power cell will not be included. Or is it included? No, you got to buy that yourself. But Snackers, Jack and I noticed a problem here. Disney is positioning this new lightsaber as a toy, and we think that's a mistake.

It's not a toy. No. We think it's wearable fitness tech. That's right. This lightsaber is wearable fitness tech. Because faux combat is an age-old exercise routine. From boxing classes to kickboxing, I mean, soul cycle of the 1600s, basically. Drop a lightsaber in your robe holster, and it's a Fitbit for the unfit.

It's the Peloton for the Padawans. Hey, Disney, have you seen the valuations that big tech slaps on fitness hardware? Have you seen them? Change the marketing on this thing, spin it off, sell it to some big tech company instead. Add a Bluetooth and sync it up to your Apple TV Plus. Hey, Alexa, commence, Yoda's. Eighth Century Abertax. Bish...

Let's hear our three stories. You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about the hearing food is air candy. 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. Robahood Financial. LLC, member Fembra slash SIPC. For our first story, I-Robot, its stock just plumbing it, 15% after its earnings. Brutal. We got a menu with makeover ideas for this Rumba vacuum owner.

Jack and I are running like a dry bar over in Italy right now. This is beautiful. Now, I-Robot is a corporation that predates Apple's ownership of the lowercase eye. It does, it does. Founded in 1990 by three MIT people before it got sucked by Will Smith. It's kind of the peloton of consumer bots. And it kind of looks like a blackberry that made it with a hoverboard. But 30 years after founding the company, IRobot is still really just one consumer product.

The Rumba vacuum. It's just Rumba. 90% of their sales are the cruising hoover sucking up crumbs from your butter toast over there. The other 10% is a cruising mop doing pretty much the same thing but the liquids. Like polishing away the spilled milk. They got you covered on the foods and they got you covered on the beverages. They announced their earnings on Tuesday. sales soared by 57% because work from home neck, you want to work from a clean home.

Now, here's the funny thing, Jack and I noticed, Snackers. The stock, though, despite all that, it dropped 11%. And it's one of the few stocks we've covered recently, it seems, that is not at a record high. And we're looking a little deeper. We jump in Snack style. Profitability over at Our Robot. It's down four points right now. And that's due to the ugly, unsexy supply chain issues.

I mean, I'm going to have to bring us back to 2018. Jack, the Trump tariffs, remember him well? Trade War. Phase one or phase two trade one. I still got the scars. Well, Irobots Rumba is made in China. It is. But I robot lobbyists were able to win an exemption so like they didn't have to pay all these

tariffs, these taxes on the Irobot. But the exemption expired on January 1st, 2021. And so here's the ipso facto. I robot now pays the U.S. government a 25% tariff every time it arrives in a port. Clearly, having manufacturing in China, based on our relations right now, is a long-term threat. It is. So they're building a new plant in Malay.

But that is like a whole costly thing. You got to outfit the place. You got to stick Rumbus everywhere. So last quarters miss and yesterday's 11% drop, that was caused by tariffs. But today's stock for I-Robot, it's below the highs this company reached back in 2017, 2018, 2019, Jack, 2020. Tariffs clearly Snackers isn't the only issue at I-Robo. We sniffed around.

There was something else going on here. So, Jack, what's the takeaway for our buddies over at I-Robot? We got two options for a makeover for iRobot. Option number one, change the name. Retail investors are increasingly a force in the stock market, and people know Rumba. DJ Rumba, that's Parks and Recreation. You know that. Iroba, on the other hand, is a Will Smith movie.

And we got some beautiful precedent here. I mean, research in motion, that was a Canadian company that made Blackberry, and then they changed their name to Blackberry. Irobot should probably change their name to Ruba. Okay, and this leads to our second wonderful, lovely makeover option. for the folks over at iRobot. I robot could put themselves up for sale. Yeah, big tech companies, they are clawing to get into your home these days, lightsaber.

Amazon acquired ring security cameras for a billion dollars to get inside people's homes. I mean, Google whipped out the checkbooks on us, Jack, bought Nest, the thermostat company, for a cool $3 billion. Guess what? Irobot's current valuation, it's market cap. It's $2.5 billion. I'm whipping out the whiteboard here, Jack. That is right in the meaty part of the acquisition curve.

It's a crumb in terms of big tech acquisition price. I robot. We got two makeover options. Choose one. For our second story, General Motors just exploded last quarter in a good one. Not in a bad way, in a good way. It's all because the escalades and the suburbs. That's the new business class. It is for the kids. Now, Jack, we're going to jump into the numbers here. First quarter last year, 2020, can you tell me the profits that GM had? GM made barely a profit. $300 million in Q1, 2020. Jack, first quarter this year, 20, 20. 2021, can you tell us the profits that GM has? $3 billion, $10 times more than the pandemic quarter of last year. It's because of the year-over-year thing. We talked about the year-over-year thing. And that's despite the shortage in chips needed for cars, which we've talked about. Which are the new toilet paper.

Right. GM prioritized the scarce chips they did have to make their SUVs in the trucks. But funny thing, the suburban and escalates that they're making, those are why we think GM stock just row 4% yesterday. It's a St. Bernard-sized profit puppy. Yeah, it is. a suburban is 19 feet long. Start measuring it in meters at that point. It's Panamax.

You're going to pick your kid up from soccer. If you're doing it in a suburban, you're doing it an escalade, you're making a statement over there. If you're going to have a Panera party in peace, you want to do it in the back of an escalade where they got tinted windows. Tinted windows, that way you can enjoy the salad. No one's going to judge it back there. Now, suburban and escalade, we notice they took a page from Delta and United's playbook.

Now, GM didn't say they took a page doing this, but Jack and I think that's basically the strategy. business class on wheels. Jack and I jumped in Snacks'all. We noticed something funky going on with like the pricing over with these particular SUVs. The 100 ton eight seat suburban starts at $52,000. And let me tell you, Jack, I'm opening up the door here. What do I got to do to get you in this thing? That place, 52K, it's going to get you 145 cubic feet of cargo space. Okay, we did the map. Yeah, we did. In 145 cubic feet of cargo, you can fit 60 away carry-on suitcases. Okay. Kids, we're going on a road trip. Pack for three years.

Honestly, Jack, there's nothing you like more than referencing that away suitcase. Great gift. I dance with that thing down the aisle. I don't blame me. Now, Snackers, these cars, these suburbans, the escalates, they're starting at 52,000. But get this. They're commonly selling for over $100,000, according to the Wall Street Journal. The base suburban, your traveling economy. Double the price and you'll travel suburban business class. Yeah. And these Suburans we're talking about. They're like $100,000 double the price Suburans. They've got a seat iPad behind each and every one of their seats for the ski trip. Exactly. It's critical. You want the dashboard to look nice. They got like a primeval forest amount of wood on that thing.

We looked at this. Even the bathroom in a suburban has an iPad to watch movies. I'm sorry, Jack, this thing has a bathroom? No. But if this Rolling Palace had a bathroom, you know there'd be an iPad. So, Jack, what's the takeaway for our buddies over the escalades and the Suburban's? GM sees price insensitivity signals. Snackers, walk up to Dylan, the car dealer, say you want an SUV, and here's the thing. That is going to become a beacon to Dylan. He's seeing dollar signs in his eyeballs. Because asking for an escalade is a signal that you can afford $52,000 car.

Yes, it is. But you're probably about to drop $100 for one. And that's why General Motors funneled all its available computer ships to Suburbanes and Escalade cars and the other higher-priced SDBs they also got. Because those buyers say yes to the high margin add-ons like Wi-Fi, Alexa, and iPads behind every chair. I mean, the Suburban

is basically a role in co-working space. But Snackers, if you go to Dillon the dealer and you ask for a tiny Chevy cruise sedan instead, that's a sign that you are price sensitive. And guess what? GMs stopped making most of their sedans because they don't want to deal

with price-sensitive customers. Because price-sensitive customers probably say no to high margin extras like Wi-Fi and Alexa in the car. But its two biggest SUVs have become platforms for the price-insensitive car buyers. Price insensitivity signals. For our third and final story, the most important case outside of court this year just happened. Facebook's Supreme Court just said that Trump should have been banned back in January, but Zuck still managed to make this case awkward. He still kind of made it awkward. Now, Facebook has got itself a little thing they call the Oversight Board. an international court of justice with the jurisdiction, Facebook feeds globally.

Nothing about the hey-go-nomestic. Created about a year ago, basically to help Facebook handle misinformation, graphic violence, abuse posts, all the hard stuff. It's quasi-independent. Keywords. They're based in London. And it's currently comprised of about 20 multinational politicians, journalists, human rights activists, and the ex-prime minister of Denmark. She's critical. You've got to have her there. Now, Facebook says this is an independent group with the Oversight Board to sign. Facebook would comply with. But we said the word quasi, because Facebook is paying these people through $130 million fund of their money. Not too shabby. And they have no legal obligation to accept the rulings of the Oversight Board. This oversight board is like the Jedi Council, but without the ability

to wield the force. Wednesday Snackers, this oversight board reached their decision on the Trump ban from Facebook. And here was the decision. Ready? We got the envelope out. Instead of guilty or not guilty, the oversight board said, Ness. Neither yes nor no. We're going to summarize the ruling in two excerpts. Yeah, basically, here are there two lines that say it all. First, Facebook was justified in suspending Mr. Trump's accounts on January 6th and extending that suspension on January 7th.

That's the first thing they said. However, it was not appropriate for Facebook to impose an indefinite suspension. So as you can tell, neither yes, neither or no kind of a Ness situation. And the oversight board looks like the Jedi account. Council, but with no Obi-WiWan. Now, Snackers, we all expected this decision on whether Trump's account was going to be reactivated or not. We were waiting.

We had the calendar circle. I mean, Jack and I, you were waiting for this. But the Oversight Board punted on that crucial decision we were all waiting for. They punted it back to Facebook and said Zuck has to decide on that within the next six months. Now, we thought the Oversight Board was going to decide on Donald Trump's Facebook accounts, future basically like a referee. Instead, it was more Monday morning quarterback.

It was. They just judged on what Facebook did in January, the more. morning after. They urged Facebook to be more transparent and how they make tough decisions and like less of the ad hocery things. Again, the oversight board, Jedi Council without the force, without Obi-Wan, and definitely without Samuel L. Jackson. No, definitely not, Sam. Now, meanwhile, Donald Trump launched yesterday a website that includes a blog where he can post Twitter-like, tweet-like things to his audience. And meanwhile, Republicans are now calling to break up Facebook in the wake of this news that he's not getting unblocked. So Jack,

What's the takeaway for our buddies over at Facebook? The most important challenge for social media is the one their most avoided. Funny timing on the Snackers because also yesterday, the Democracy Perception Index was released, which highlighted the biggest threats facing democracy worldwide. Big tech and social media were both on that list. Yep. So cleaning up Facebook and Twitter is crucial, clearly. Both Facebook and Twitter are using artificial intelligence and an army of human moderators to try to do that. But then you got the tough decisions.

artificial intelligence can't decide on. Like an elected politician who uses his tweets or post to divide, mislead, or lie. And that's a responsibility that Facebook and Twitter, they're simply avoiding handling. Facebook outsourced the tough decision on whether to reinstate Trump

to their oversight board. And then the oversight board said, Facebook is avoiding their responsibilities of reaching the decision themselves. And then, Jack, up the highway over at Twitter, their crowdsourcing moderation from users who like flag disturbing tweets, they don't even use the experts with extremely long resume.

That's an experiment they're working on right now called Birdwatch. Now, Facebook and Twitter, they seem open to anything when it comes to this stuff. As long as they can avoid being the ones who have to make those tough decisions. Jack, can you whip up the takeaways for us over there? Please. Irobots Rumba rebounded in sales, but it's profitability shrink. We got a two-part makeover menu for these guys. Change the name or sell to big tech.

General Motors made $3 billion last. quarter driven by the escalade and the suburban. Tell Dylan you want to see the huge SUV. Then Dylan knows you're not price sensitive. For our third and final story, Twitter's ban of Trump is permanent. Yes. Facebook's ban is unclear. The biggest challenge for social media is the one thing they're most averse to. Now, time for our snack fact of the day. This one, not going to lie, this one was like handed to me from my lovely wife, Molly Martel, who Jack knows well from our college days too. Okay. In New York City, people are saying right now, that it looks like the tulips planted in like the sidewalks are like amazing.

Molly has sent this way in advance. She was very excited about this. Yet the city, New York City, planted the same number of tulip bulbs that they did last year, a whopping 110,000. But get this, Snackers, there were 24 straight days of snow in New York City in February this year. And that part is key because we're no horticulturists over here, but snow coverage apparently helps the tulip bulbs grow their roots. Ipsophagto makes them bigger. Nick, what's the takeaway for our buddy, Molly? We've told you about revenge spending. This is revenge blossoming.

Happy birthday, Molly. By the way, Snackers, freshman year, Nick and I hosted a party first week of school. True story. Molly was there. Sophomore year. Yes. Molly lived down the hall from Nick and me.

I'm telling you, there was something there. The sparks were flying. Great girl. Great girl. Snackers, you look fantastic today. If you haven't yet, scroll down. Follow us on Apple and Spotify. Leave a five-star review.

Let us know what you're thinking. Nick and I'll see it tomorrow. As always. Can't out wait. Jack, are they going to make an away travel suitcase for our microphones or what? They should. And before we go, shout out to Samar and Reneitha, two snackers in Seattle who have a literal snacks corner in their home.

They painted a Robin Hood Snacks sign for where they get their snacks. It's a wonderful move. It's where they eat their snacks and where they listen to their snacks. And big ups to the Tony Nash who just dropped the new podcast episode we should all listen to. And Chris and Nicole just got engaged in Everett, Massachusetts, just outside of Boston. Lovely ring. I love what he did. Congrats to Keisha and AJ for graduating business school at the University of Utah, the Uts.

And congrats for the whole Kelly School of Business MBA class over in Indiana. The Hoosiers. And congrats to Abby Marino, who just got a new job at a tech incubator in the Gateway City of St. Louis. It's called this Gateway City, right? And to Rachel first job, Cape Town, South Africa. And happy birthday to Archie Harrison, Mountbatten Windsor, aka His Young Highness. And happy birthday to Ram Alexe of over in Vancouver. And Ryan Cooneya in Chicago.

and Sarah Vuka in Portland, Oregon, and Connor Norton in Sunnybeth, and Chelsea Minty over in Boulder, and Shane Yuzin in Newcastle, Nebraska. And happy Cinco to Mali to Molly Martel. Great girl. This is Jack. I own stock of Amazon and Peloton, Nick own stock of Apple.

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, 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.

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