The Best One Yet - Apple battles Spotify for podcasts, Domino’s “Volemort-y” 9% drop, and Goldman’s pivot to main street

Episode Date: July 17, 2019

A report revealed that Apple wants to jump deeper into podcasts by signing exclusive deals with podcast creators sent Spotify shares down. Domino’s fell 9% after its earnings revealed it may be facing pressure from ”3rd party delivery aggregators.” And Big Bank Week continued with earnings from JP Morgan, Wells Fargo, and Goldman Sachs — and we noticed how expensive Goldman’s pivot from Wall Street to Main Street is getting.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. This is snacks. Daily, it is Wednesday, July 17. TBOI, the best one yet. This is actually the best snacks. Markets dipped a tad because President Trump commented that the U.S. China trade war is not even close to that. We got to throw us in the context. So stocks are still very close to recognize. Very close to record. They just inched a bit down. Three stories today. The first one, Apple is preparing for a podcasting war. Jack, I'm throwing this out there. Content has never been more king. Agreed. Second story, Domino's dropped 9.000. percent after its earnings report had a big, fat elephant in the room. This is a Voldemort situation. They wouldn't mention the name of the company, but we know who they were talking about. Third and final story, Big Banks, JPMorgan Chase, Goldman Sachs, Wells Fargo. They've reported earnings yesterday, so we're going to jump into the main theme that we found. And here's that theme. Goldman's pivot to Main Street is really expensive. But before we get into that, plant-based

meats have got a lot of attention on this pot. You got a couple pea-based sausages over the weekend? Beat-based burgers. I'm running out of alliteration here, but you don't know If you heard of merits. Because if you haven't, you should listen to what merits are. We're talking meat-based vegetables. The thing sounds ridiculous because it is. True story. They are making turkey breasts that are shaped in the shape of a carrot stick.

If you're wondering. They're coated in carrot marinade. How this happens, it's disgusting exactly as you thought. Think of those things when your mom was like put an icing on a cake. The funnel. Yeah, the funnel. They do that with the turkey meat. They do that with the turkey meat.

It looks like a carrot stick. It even has a little green sprout coming out at the end. You know who's behind all this? Talk to me. Arby's. We get it. You're really, really big into meat. A little insecure, but we'll roll with it.

Now, listen to these keywords before our three stars. You're tuned in the snacks daily. We spoke to the lawyers and we got to get some legal out the way. It's 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. We're not recommending any securities.

Nope. 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, Domino's is losing its key advantage. Fast, quick, cheap delivery. You know where pizza was invented?

Talk to me. Ann Arbor Michigan. That's what they say. That's where the biggest pizza company is in the world is based. It's called Domino's. And I think, are they still making those giant, like, cookie pizzas for burios? Yeah, the ones that are a little overwhelming. Everyone gets enthused about this.

I hope so. I hope they are. someone sent us a pick. Domino's announced yesterday had 3% sales growth in the United States over the second corner. And if you're curious about pizza abroad, because everyone needs a little bit of hometown pizza abroad, their sales internationally were actually worse, even though that's where two-thirds of their stores are.

So things aren't looking great. And the CEO grabbed the microphone and had to step up and defend himself to a bunch of angry Wall Street analysts. Wiping the Marinera office face. All right, guys. So the first thing you said was, it's really hard to find drivers because the labor market is so tight that that kind of low-level, low-cost labor is hard to find. So that was very direct of him. Then we noticed he did something that was a little indirect. He started talking about the other

headwinds they're facing. He's that they're facing headwinds from aggressive activity from third-party delivery aggregates. Sounds like a commando describing some like unknown enemy situation. He said third-party delivery aggregators 19 times in the earnings report. We counted it up. Now he also said that things aren't getting better anytime soon and the stock dropped 9%. Fun fact. Domino hasn't raised prices of their pizza in a decade. We check this out, and actually the Wall Street Journal did all the work on this. Yeah, we only found one source. It was the Wall Street Journal.

So, bold claim. And we're going to take it. They seem to verify their stuff. So clearly, prices are as low as they can get for Domino's, but it's even under more pressure from these third-party delivery aggregates. Right. These, like Voldemort situation, who are they? They cannot be named.

We're going to name them. Yeah, we're going to pull a Harry Potter and say the Voldemort here. It's DoorDash, Uber Eats, Grubbub, and Postmates. Brut. Brutal. They make delivery a lot easier via their apps, and they don't want to be named by your time. Everywhere you turn, $15 off your first meal. Or quack, if you get your delivery from Chipotle, delivered. And then let's say you're getting that late-night cassidia, you ordered it via the app,

you whipped up your Grubhub to do so. You're paying through the app so it's cashless, and you're watching the delivery driver make his or her way to you via the streets on the GPS and the app. If you're on a diet, these apps are dangerous. Now, they're all offering promo codes, too. So if you step on the subway, you're basically blitzed left and right by DoorDash Grubhubbub delivery codes. You order more. All this low-cost competition from the delivery apps is eating into Domino's business. So, Jack, what's the takeaway for our buddies over Domino's? Domino's isn't a pizza company. It's a food delivery company. Okay, this is wild context here. Over the last 10 years, Domino stock is up over a thousand percent.

Not because it does the best pizza, but because it does the best fast, quick, cheap food delivered without you even having to get out of your system. This is like a pseudo-history take down here, But basically, when you look back on the age-old time of ordering in food delivery, you had a couple options. Go back to my high school days in Brattleboro, Vermont. All you could get was Chinese food or pizza delivery. Even in the great concrete foothills of New York City, we were pretty much going with Chinese or pizza a lot of us. But now these delivery apps have democratized delivery for any type of food that's being cooked like anywhere. If you've got a storefront and you're comping out food, you can be on one of these apps. McDonald's announced yesterday that it's now accepting deliveries through both Uber Eats and Doors.

So domino's dropped because its growth is slowing as delivery gets democratized. For our second story, strap on your AirPods, Jack. Apple is serious about podcasting so serious that we just found it's planning exclusive podcasts for Apple music listeners. This is all according to Bloomberg. Right, that's true. It created quite a splash in the podcasting community. People are freaking out. I mean, I guess it's all audio, so we don't know what they look like, but they reported

this via podcast. So according to Bloomberg, Apple is contacting podcast producers and asking them to go exclusive only on Apple. We know what you're thinking first. That sounds a little desperate. We know what else you're thinking. Did they contact us? They haven't. What they are doing, though, is they're pulling a Spotify. Totally pulling a Spotify. This is classic Spotify. The Swedish music streamer acquired Gimlet and Gimlet's 29 podcasts back in February and it pledged to spend $500 million total beefing up podcasts. And Spotify's had foresight because that investment has caught them up really, really quickly. They went from zero to like 15 to 20 percent of the podcast listening.

market really fast. Now, when it comes to the data, Apple is still like the big Kahuna Burger here when it comes to listens. True. Apple Podcasts and Apple iTunes dominates like 70% of all podcasts. The rest is kind of split up between a bunch of listening platforms and then Spotify. Spotify's growing, though. Now, we've seen these content wars in streaming video. You know, everybody's getting a show and they're signing exclusively with either Netflix or HBO or Amazon or Hulu. Basically, there's a whole formula here. Either you have to be a chef, you have to have an idea for a documentary, or you're a comedian making a comeback. Netflix will give you a show. Or you have to climb El Capiton at Yosemite. You'll probably get a show. Bring a GoPro with you,

and boom, that's like a two-part series. It seems the content wars were streaming in video. Maybe they're going to creep into the podcast space where everyone has to sign with either like Spotify, Apple, or who knows, Sirius X-M. We need an agent? Show me the money. So Apple, it was the status quo when it came to podcasting as a company. That's where the whole pod situation came in podcast. Yes. But there have been widespread complaints that Apple hasn't really paid attention to podcasts, and it's been a little under-optimized. Right. You made me listening on an Apple podcast platform right now, and you notice it's really hard to share your podcast.

Or if you're a podcast creator, it's hard to get data from the podcast. So Apple, though, has finally realized that podcasts are kind of a big deal, and it recently broke about iTunes to make podcast its separate app, both on the MacBook and on an iPhone. Now, I'd love to share this fact that shows a key element of podcast, but I know Jack loves this fact. This is a good fact. Jack likes this fact.

The number of Americans who are listening to podcasts on a regular basis, is growing fast, and it's up to 32% of Americans over 12 years old. Although, I want to point out, I think 11-year-olds would really like snacks daily, too. True. So, Jack, what's the takeaway for our buddies over at Apple? Apple used to create, now it follows. Apple was a pioneer in so many things. We're talking iPod, iPhone, iPad, Siri, Black Turtle Nacks.

Yes, now it is just copying others. Think about the recent launches Apple has had. Music streaming. That copied Spotify. Apple TV Plus streaming. That copied Netflix. Beats and HomePod. speakers. That copied Bose twice. Original podcast. Copied Spotify again. But AirPods are pretty

cool. I got to admit. Air pods are pretty cool. So it's still creating some stuff. That's a good one. For our third and final story, Jack, I didn't even say this to yet. Happy Bank Week. Thank you. Happy Bank week. I didn't even get to say that to anyone else. So on Monday, Citibank reported earnings. Yesterday, J.P. Morgan, Wells Fargo, and Goldman Sachs reported earnings. Tomorrow, it's Bank of America. Thursday, it's Morgan Stanley. Very nice. You got to round out the whole list. We know what that means. We're talking lots of business guys. of embroidered shirts with, you know, the little initials on the lower right. You know what we're talking about. A lot of functional buttons. If you don't know what we're talking

about, you can't afford it. Because it's not big bank week unless you have those things. Now, we learned the most, though, from Goldman Sachs's quarterly reports yesterday. And that's key because Goldman's been notoriously always a little bit secretive of what it's sharing out there. But they've got a new CEO, new page. They want to show you a little more leg. So, revenues beat expectations for Goldman. And it bradged the whole time that it topped the worldwide league table. This is the fantasy football situation. for investment banks out there. It announced it's number one in announced

mergers and acquisitions. It's number one in completed mergers and acquisitions. I feel like completed is all that matters. It seems like you could have just said you're number one in mergers and acquisitions. And it's also number one in IPOs. Now, this is important because it's almost like marketing because these are big deals.

And if you're a company that's going to go through a big deal, you want to make sure this deal actually happens. If you are about to IPO, this is the pinnacle of your business life. You're not going to leave it to some company that's like number eight on the league tables. So, if you jump into what's going on with their revenues, the majority of Goldman's revenues are coming from like investment banking and trading divisions like this. The sexy Wall Street stuff. But one thing that got us really curious at snacks was the profits, because Goldman's profits fell 6%. And that is because it is pivoting away from Wall Street and a little bit towards Main Street,

regular consumers like you and me. And we're starting to see that affect its finances. For example, it spent a whopping $1.3 billion on retail banking initiatives for like you and me. Intel banking, banking for normal people. You and me. Now, the brand is called Marcus, which is named after the founder of the 150-year-old investment bank. Classic name. They offer zero-fee, high-interest savings accounts. They offer personal loans.

Now, that's like a car or a boat or something. That's kind of like your basic go-to products. Then they're going to launch this year what they think is their sexy product. This is the headliner. It's a joint credit card with... Wait for it. Apple. Apple.

And it comes either in the iPhone digital version or a very heavy, very thick. thick, very substantial metal credit card. They say titanium's like, you drop this on a table, it's going to leave a thug. You've got to take this thing out for TSA pre-t. Totally. Now, they also warned everyone that five years is how long it's going to take before they turn a profit on this Main Street business. Yeah, because pivoting from Wall Street to Main Street, that costs some money, and it takes some time. It's not easy. So, Jack, what's the takeaway for our buddies over at Goldman? Bank earnings are a window into consumers' pockets. Right. You hear bank earnings, and you're thinking investment banking deals, stock trading interest rates in some nebulous confusing ranking

situation. That sounds like a fantasy football league. It's not just that. Nope. It's not just that. J.P. Morgan told us that credit card spending was up 11%. Two days ago, City told us that credit card spending was up 8% for them. Now, credit card spending, it can be dangerous. Be careful. You're throwing it on the plastic. Make sure you're not going into debt. Or on the titanium. But it is a sign that consumer confidence is still hot in this country. And you can see that in bank week. Jack, can you whip up the takeaways for us over there? Domino's used to be the only option for delivery. He had pizza and he had Chinese food. But now, thanks to growth in DoorDash, Uber Eats, and Grubhub, its delivery business is slowing. AKA, and I don't even feel comfortable saying this anymore, third-party aggregators.

Apple is reportedly declaring war against Spotify with podcasts. And by the way, Spotify shares drop 3% in the news. It is focused big on podcasts. Goldman Sachs is spending a lot of money to build a Main Street division, but it's still number one on Wall Street. You can't ignore Big Bank Week. It's where you can learn about consumers. Now, time for our snack facts. Sent in from like, I don't know, down the street.

It's our buddy Anquite in San Francisco. We actually don't know, but Monkeet, we love having it on the pod with us. So, you know what we're celebrating Buzz Aldrin, Neil Armstrong, NASA, the whole crew. Apollo 11. 50-year anniversary. For landing on the moon 50 years ago. And we were saying the other day, this basically spawned an entire like Hollywood genre of billions of dollars. Yes, it did.

But it also spawned India sending a satellite into orbit around Mars for 74 million dollars. That was only five years ago. It cost $74 million for that mission. Freakishly cheap. the U.S. was almost six times as much. Now, get this. Sandra Bullock and George Clooney starred in a movie Gravity. Love that couple.

Outer space movie. Incredible scenes. Now, that movie cost $100 million, more than it cost India to send an actual satellite orbiting around Mars. Incredibly frugal. You got to get these like Indian engineers running your wedding, Jack. Fugality. Yes.

Yes, I do. Preach. It adds up quickly. Now, a couple other key stories we're covering in our snacks newsletter. Facebook's head of cryptocurrency. His first name's Marcus. He got grilled by Congress yesterday and day two starts today. Snackers love having on the pot with us.

I feel good about this one. Yes, I did. And we'll be back again tomorrow as we're hoping it's better than this one. 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.