The Best One Yet - Apple’s iPhone 11 day, Ford’s “junk” credit rating, and Next Door is the anti-Facebook

Episode Date: September 11, 2019

Everyone’s looking at the new iPhone 11 unveiled at Apple’s big product unveil (spoiler alert: new colors), but we’re focused on its strategic moves with Apple TV+. Ford’s bonds just hit junk status, so we’re looking at the decade that led to this. And Next Door is our “Unicorn of the Day” for its latest fundraise and focus on accountability.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 is Wednesday, September 11th. Feels like the first time. I can't believe we did this. Is this better than the first time we did? This is the best one yet.

Best snacks daily we've ever whipped up. Stocks barely budged. What have we got? Apple unveiled the iPhone 11. Big event. And the Pro Max is even bigger than the current XS. Darwin's freaking out. He thinks we need bigger hands over here.

We got to talk, though, about Apple TV Plus. That stole the show. If you have to pay for a Vente-Latte, maybe consider Apple TV Plus instead. It's the same. Second story. The unicorn of the day is Next Door. It hit a $2.1 billion valuation. Next door is the anti-Facebook social network for neighborhoods.

If only their founder's name was Zuck Markerberg. Third and final story, what have we got Jack? Ford just got an email alert from credit karma. Bing! Wasn't a good one. Not a good one. Its credit rating was downgraded to junk status. And the National Bank of the F-150 is going to feel the pain the worst.

Snackers, it's been 18 years since a bro. Brutal Day in September. This is something that we focus on at snacks every year and we don't want to forget it. We're going to take a quick moment of silence and then get to the pod. Snackers, we love having you with us. Time to hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and 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. It's not a research report or investment advice. Not an offer or sale of a security. Right. It's digestible.

Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. We're our first story. The one you want to know, Apple just unveiled its iPhone 11. New colors. Everywhere. A whole bunch of new colors. Like a freaky rainbow from vineyard vines.

But we're focused on the TV. The Apple TV and the Apple TV's low prices. Apple TV Plus. Let's talk first about the new iPhone. Everyone's talk about the iPhone. Let's talk iPhone. The theme here is a really confusing product name. And a lot of confusing.

camera numbers. I remember when the iPhone 3 was very simple to say it. I remember when it was just iPhone. That's true. And then he had a number. Now we have the iPhone 11. The iPhone XI, just kidding. It's just 11. They got the pro version, which is $1,000 or more. Impressive, sounds sexy. And then they got the iPhone 11 amateur. Worst name ever. It's not really called the amateur. Is it really not? Okay, we'll go with that. But that one starts at $700. But if you're not pro, you're amateur, right? I'm pretty sure. It's the ying to the yang. It's implied Apple, we get the hint. So to make sure that you upgrade, they're offering more than like Batman black, silver, rose gold.

No more moon color. They got six new colors, including purple. Boom. Yellow. Fancy. And what looks like... Snacks green? Can we say that?

I got to say it. Let's run with it. We can expense that thing at the company. I think so if it's the same color. I read that somewhere. Now, here's the other thing. They added another camera. Boom.

You weren't satisfied with one? Confused by two. Three, you can't escape this thing. Now, there's third camera. It sits on the... back the iPhone. It has an ultra-wide lens, so it captures 120 degrees of that incredible Grand Canyon view. This is like IMAX's younger, smaller cousin. And it totally fills the screen. So that little button you push to take the picture, that's like part of the picture

you're taking. But with three cameras here, we've got like a Gillette Mock situation. You also got all the razors. A fergy style hump on this phone. I know what you're talking about. To fit three cameras in there, it's got a bulge. It's a serious bulge. Now, one other camera feature we have to mention. We have to. Everyone's freaking out of this. I love the slow motion video feature on an iPhone. What slow motion? Whenever I'm golfing, I take a picture of myself swinging. It's wonderful. We do this. Very narcissistic of me. Sometimes we record the snacks in slow motion. Well, speaking of narcissism, now you can take a slow motion video in selfie mode because it's built into the selfie camera. He's right. This is jazz.

But what we really got to focus on here, because the iPhone, that's a separate thing. We got to talk about the Apple TV. That's what excited. Jack and I at the most. Apple TV Plus is the $5 a month Apple streaming service. It's like Netflix, but with a much smaller library. It's basically Apple's attempt at doing something prime-ish. Yes. It comes out November 1st, and this undercuts Netflix by a lot. And Disney Plus, buy a lot. Yeah, Disney's seven bucks. I think Netflix is like 13 bucks. Apple is five bucks. But Jack, can you share the Apple TV Plus kicker with everyone? If you buy a new Apple device. This is true. Like an iPhone, an iPad, or a Mac, we're going to give you a free Apple TV for a year.

Not snacks, but Apple's going to take care of that point. It's like a car salesman. It's ridiculous. Basically, they're really trying to get you to take a bite out of the Apple TV plus. Now, at the end of this Apple event, which took place in Cupertino, California, and Steve Jobs theater at Apple HQ. It's dry heat. Tim Cook, the CEO, went up there, and he just pushed play on a bunch of trailers for

the new TV shows. Boom. They've got Apple TV Plus original content. We're talking to Steve Carell show. Reese Weatherspoon. And then that guy, Drago from, uh, you know. Carl Drogo from Game of Thrones. I don't know the actor's name.

He's a big snack listener, but he kind of scares me. He's a big man. So, Jack, what's the takeaway for our buddies over at Apple? Nick, I got to say, hit me. Even this event, through my eyes, lower prices. Apple TV Plus, lower prices. $5 a month. Newest iPhone price?

$700 a month. New Apple Watch 3. Yeah, well, that's actually not new. The Apple Watch 5 is out, but the Apple Watch 3 is $200. That's a low price. And these lower prices, they reflect Apple's struggle to stand out these days. Another key feature of this iPhone 11 is the A13 chip, which has 8.5 billion transistors. I bet you my A11 chip is just as good.

Apple has been lowering prices, and they're hoping this could drive iPhone replacements, or just keep you buying stuff in between like Apple TV Plus. Yeah, they're looking at the whole customer. They're going to sell you a device like a new iPhone every two or three years and fill in between with services like Apple TV Plus, Apple Music, ICloud. For our second story, Ford, its bonds just got downgraded to a notic. quite fun level. A junk level. We're talking junk status. Ford Motor Company is a junk credit company. Let that sink in for a second. Now, full disclosure, let this one out. In 2014,

Ford Motor Company was the first stock I ever bought. Jack, what? I encourage you to do it. Nick, it's a family business. Jack loves sharing this story. Forty percent of Ford shares are still controlled by the family. He's a sucker for a good family story. I didn't have the money to afford those shares. It's a conservative bet for a young person. Now, here's the situation. Now, here's the situation. Ford Motor Company needs a serious makeover. It's been trying to redo itself and it says it's going to cost it about $11 billion. Yeah, here's the plan. More self-driving car investment, less selling abroad, and less sedan. They want to keep selling these Ford F-150 trucks. You gotta mention the Ford F-150 truck. That's there. That is the sugar daddy profit puppy. I was going to, you took the words right

out of my money. Now, it's even making that F-150, electric to make sure Tesla doesn't beat it to the punch. Got $11 billion you mentioned, they got to raise that cash and they're doing it by giving out some IOUs. They're borrowing money from investors. And before it issues bonds. Which are those IOUs? Yeah. It gets a rating. It gets like a grade from a credit rating agency.

Now that rating agency comes in and says, how likely is Ford to pay you back if you're one of the bond holders? Yeah. They're like, are you a trusty Ted or are you a risky Roger? I was wondering what kind of alliteration you were going with there. I'm glad you did. Basically, they then come in and they assign a grade to Ford based on how likely it is to pay you back. So the top credit rating is triple X.

So picture like Tyra Banks here from like America's. next talk model. She's judging you. You can get a triple A, a double A, a single A, a triple B. Those are all investment grade really good ratings. Like Tim Gunn make it work kind of. Oh yeah. And Ford just got downgraded to double B, which is the threshold between investment grade and junk. Literal junk. That's how the kids call it these days. But to fully appreciate this story, we guys step back and talk about some history here. You want to go back? Can you take me back like 10 years? How about 1903? Take me. That's a little more than 10. I'll go. I'm willing That's when Henry Ford founded the company in Detroit, Michigan.

Now we've got to fast forward to like 2010. Okay. About 10 years ago, Ford was the only of the big three car companies not to need a government bailout. Right. This is when the car industry was really struggling, but Ford barely got through this period. Barely. Skimped by. Ford's big oval blue logo, they had to give that to a bank as collateral for a loan.

They just barely got by. They literally almost had to give away their logo to get through the financial crisis. They survived by their chin-chin-chin-chin, and in 2012, they were the first of the big car companies to return to investment-grade credit rating. But yesterday, we learned that they've now returned to junk, basically because they haven't kept up with their competitors. Here's the thing. GM seems much more like future-ready than Ford. Jack, so what's the takeaway for our buddies over at Ford, and please say chin-y-chin-chin-again? Ford is also basically a bank, and that's where this is going to hurt the most. Oh, Jack, what do I have to do to get you into this Ford Focus?

You got a warranty? I got a warranty. I've limited warranty. I got six airbags even though there are only four seats. All right, Nick, I actually need financing. Financing is an important thing that Ford does. And that's how Ford gets you into its cars. So Ford actually issues bonds to investors and pays, let's say, a 5% interest rate.

But then Ford comes out to you, Jack, who wants to rent the Ford Fiesta, but isn't certain, it says, hey, we'll lend you the money to do it at a 6% interest rate. You pay us. So Ford makes money on its loans. those loans help it sell cars. And then it pays the money back to investors who gave it an IOU. But now that it has a lower credit rating, investors are going to demand a higher interest rate from Ford. So it's going to pay more money. Having this junk status turns out to be really costly for Ford. It's like its rent just went up. For our third and final story, this one's a wild one. Unicorn of the day, we got Next Door. Next Door. It finishes its fundraise. It just did. It wants to localize

your neighborhood. Wait, sorry, next door. Two words or one word? What do you think on this one? Silicon, is it based in SF? Yep, yep. Got to be one word. Yeah, yeah, you got to rub hub, door dash. Door dash. I know what you're thinking. Next door.

They don't even do a capitalization. No, no. It just raised $170 million from venture capitalists, which gives it a $2.1 billion valuation. Mary Meeker, legendary venture capitalists. She's known as the queen of the internet. And she just got involved with this latest round. Now, next door is a localized social network for your neighborhood.

Exactly. And they kind of really want to keep it that way. They want to make sure you're only interacting with people in your neighborhood. So remember how. the early Facebook. I was like Facebook Generation 1. Remember? 2006, I was a freshman. I needed a college email address. Our parents can never get on it. Yeah. It's impossible. So Facebook used to be exclusive to like just one local group. Dot EDU. Now next door is exclusive to people in your neighborhood. Exactly. And it does this through an interesting verification process we'll get to. In the

meantime, here's where it is. It has 247,000 neighborhoods signed up across 10 countries. Now, Jack and I jumped into this purely snack style. Downloaded Next Door. and tried to figure out what was going on. So what'd you do? Tell me what happened. So basically, we inputted our email address, started going through the process. Then I hit this thing at like step five. They wanted to verify.

They said to ensure a trust. They're like, okay, Nick from San Francisco. Allegedly. To ensure a trusted environment of next door pack heights. Next door pack heights being one of those 247,000 bubble neighborhoods. Each member must verify their address by phone or credit card. So you chose phone. So you take the phone call.

That's them. and then it's like a recorded voice saying, this is next door, you are verified. Okay, so Nick was verified in Packhuts, and then he had access to the app. Jack, I jumped in deeper snacks. There were like six people in his neighborhood who have very unique needs.

Ashley over here, she just wants to borrow a ladder. Renee is offering to be someone's wedding photographer. If anybody knows anyone getting married, Renee can handle that. These are what they're posting. Then we got something a little concerning from Bruce. Bruce claims that he saw an orange jeep getting robbed. And he thwarted the thing,

and then the robber put the step back in the Jeep. Talk about a humble brat. A lot of concerns here. Probably just call the police, don't put this on Nextdoor. Marta went to Alta Vista Park. Yeah, great park. And saw some gift boxes and recovered them and is looking to find out whom they belong to. So she posted in Nextdoor, who's are these?

Come meet me and I'll help you know. Now, Yvonne. Yvonne went on a vaguely political argument that they're trying to start and no one seemed to be taken to this thing. So if I was on this thing and I like ran out of a stick of butter, you'd go to next door and someone hook you up. But interestingly, we noticed Cameron posted a two-bedroom, home for sale in Vallejo Street. Okay. And the reason why? That was an ad. That's how it makes money. Exactly. And it sells ad to people in very unique, local,

neighborhood-y things like apartments. And because Nextdoor is private, it doesn't have to share this information, but it did say that it's doubling its sales so far this year. So it's a social network and it sells ads. Sounds a lot like Facebook, but it's actually the opposite of Facebook in a key way. Exactly. Facebook is a major open social network. Major and open. But Nextdoor is a local closed. social network. And being local and closed like Next Door allows it to take one key feature, accountability. Exactly. Before joining, you get accountability. It verifies who you are, that you actually live in the neighborhood and what your address is, and you have to have

your name linked to your account. After joining, you also get accountability. Well, if you do something, if Yvonne takes this political argument one step too far, don't do it, Yvonne, and crosses some lines. We don't want to do this, Yvonne. She'll get ostracized from the community. Why are you doing this, Yvonne? And nobody will lend her a stick of butter. I'm not even talking to of on. Jack, what is the takeaway for our buddies over at Nextdoor? We're going to play a game of who might acquire Nextdoor. We thought we'd have a little fun with this takeoff. So Nextdoor's business sounds like it's going well. It's worth $2.1 billion. It's a private company. It's an engaged daily social media site and it's at an attractive potential price. It could stay private

for a few years. It could pull a Facebook, continue to grow and then go public with an IPO. Or it could, well, it could go badly and the business could like go bankrupt. Yeah, that's the fourth option. But the option we're wondering, it might get a acquired by somebody. One potential suitor could be Yelp. They already have a vividly powerful commercial restaurant local recommendation. And it's all about like rating. So if like Billy is mowing lawns for $10, you could rate Billy on Yelp if Yelp acquires next door. This would be a nice compliment. Another option here, a wild card, Google. Google. Google has Google Maps, first of all, which is like the ultimate neighborhoody thing. It's also got Google Nest, which controls like the

thermometer in your home. And they have like cameras kind of Amazon ring stuff. which could somehow get integrated. Exactly. And having Nextdoor would give Google another attempt to try a social network. Last idea, IAC, which is the primary owner of Match Group, the dating app, but also Handy, which is for local handymen. So if our buddy over there Ashley still needs to borrow a ladder, maybe she could team up with Handy if that's owned by the same company very easily to have someone do the job. Snackers, you've heard about Next Door. Let us know who you think could acquire them. Jack, can you whip up the takeaways for us?

Apple's iPhone 11 Pro has got three cameras, and that's getting all the focus. but we like the $5 a month Apple TV Plus. Boom, it undercut all the other streaming rivals. Ford's expensive turnaround has credit rating agencies concerned. It's a little more risky, Roger, a little less trusted Ted. And next door is the $2.1 billion hyper-local anti-Facebook social network. And it could have strategic value for a particular lucky quire. We want to know what you think.

Snackers, time for our snack fact of the day. Key moment happened yesterday. We got to talk about it. Alibaba's co-founder is retiring as the wealthiest man in China. We're talking about Jack Ma. Who's basically the Steve Jobs of China. He's basically the Bezos of Beijing. Yes, he is.

And he is the number 21 most richest person in the world by building Alibaba. Alibaba is the Amazon of China. And this is a big deal. And now Jack Ma is moving on to the next thing. Snackers love to having you with us today. Let's do this tomorrow. Talk to you then. Can't wait.

This is Jack. I own shares of Amazon and Nick own shares of Alibaba. 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, 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.