The Best One Yet - 🏋️‍♀️ “Apple’s secret personal trainer killer” — Pepsi acquires Rockstar. Government bailout chatter. Apple’s anti-Peloton app.

Episode Date: March 12, 2020

Another wild market drop has us officially in a “bear market”, and there’s chatter about a bailouts, so we’re looking at the last bailout and when/why they actually should happen. Pepsi splurged to buy Rockstar Beverages because you’re not a beverage these days unless you’re a “functional” beverage. And word leaked about Apple’s “Project Seymour” — a workout-guiding app that Peloton has a problem with (because it’s a problem for Peloton).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 Thursday, March 12th. Day number three. Yes. Working from home. We're here.

I'm looking at Jack. He's looking at me. Working from Jack's on, actually. I'm working from home, but Nick is still here. It's a wild thing. I actually enjoyed it. I may stay for a while. What are you having for dinner, brother?

Snackers, the bear market has arrived. Whip out the pause. The Dow is officially down 20% since its recent high in February. Jack and I, though, ate all of his Tostitos chips and whipped up three wonderful. stories for you guys. This is still the best one yet. Jack, first story, what do we got? PepsiCo wants in on the growing energy drink industry. Honestly, everyone is just exhausted. Look around. Everyone is exhausted. I need an energy drink right now. So it just acquired rock star energy for nearly four billion dollars. Sounds like an interesting price. Second story, Apple is working on a little something.

Goes by the name Project Seymour. This is actually a fitness app that can do dozens of different workouts right in your living room. It's not just going to count your steps and then nag you not to be lazy. By the way, remember, we're all exhausted. Third and final story. We've been hearing the B word a lot. We're not talking bots. We're not talking, uh, we couldn't think of other B words. We're talking bailouts.

Airlines are part of the chatter. So we're putting that into context with a big bailout story. The last big bailouts. We're checking them off. But Snackers, before we jump into all that wonderful stuff, we've got to have something to make you feel better. Yeah. If you're exhausted, you can have an energy drink,

or you can become a lord or lady or laird for as low as $50. Which is like $4. energy drinks these days. Now, this story comes from snacker Joe Moroni. Sent it as a snack fact. We upgraded it to an intro story. Sometimes you got to promote these things when they're good size. Get this. Technically in Scotland, you just have to own a piece of land. Doesn't matter how big. And you are eligible to become a sir or a dame. No one is looking at your like medical records. No one's checking the family tree. You don't even have to have a great accent. Also, it's not just Lord Lady. There's also a thing called Laird. Which in Scotland, a Laird ranks below a baron.

Of course. And above a gentleman. Classic. In the highly historic and misogynistic social hierarchy. Which we also knows means it's below Daniel Craig, but right up against Pierce Broson as well. Now, Scotland is a capitalist society. So naturally, some entrepreneurs put together some websites. They're buying up big plots of land and then like cutting it 100 by 100 into like one square feet

and selling you a tiny plot for $50. Boom, you end up doing this deal. And then you're like allowed to stick sir or dame in front of your. first name like on your credit card put that on your resume put it on your tinder profile try to squeeze it into your license plate one caveat jack and i found here if you're wondering about the coat of arms that's like an entirely different process i wasn't wondering about the coat of arms you don't get one here but you can dm judy dench let's in our three stories you're tuned in the snacks daily we spoke to the lawyers and we got to get some illegal out the way the snacks about the hair rain food it's air candy

they don't reflect the views of the robberhood family it's all informational just so you know we're not but recommending any securities. Nope. 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.

Robberhood Financial, LLC, member Fenbra slash SIPC. For our first story, Pepsi is acquiring rock star beverage for a cool almost. We're going to round up $4 billion. The energy industry drink is fast growing. Oh, yeah. Because everyone is exhausted. Everyone's saying hi. They're kissing.

hugging enthusiastically, everyone just kind of wants to go home. Remember Snackers, sleep is the super drug that like makes you a hundred times. In the meantime, Pepsi's providing the alternative to sleep. The thing is, Pepsi couldn't get in on the energy drink industry because of Rockstar. Right. Actually, Pepsi signed a deal way back in 2009 so that it could distribute Rockstar its 16 ounce cans. Those cans are giant. They look like they were designed by Nickelback. And part of the deal with Rockstar is Pepsi was not allowed to create a direct command. competitor of Rockstar while it was distributing Rockstar's giant nickelback design cans. No, that included any spinoff, including of Mountain Dew.

Right. Mountain Dew spin-off energy drink. That's like redundant. Mountain Dew is an energy drink. There's like a whole marketing team of Pepsi. It's like, let's just add another X to it and another Z and we need another mountain bike image and boom, we got a drink. By the way, coincidence, Coca-Cola has the same deal with Monster beverage, which is like an exact mirror solution of the Pepsi Rockstar situation. Literally, Coca-Cola distributes Monster to stores, but isn't allowed. to create a direct competitor technically. So Pepsi kind of had no choice with this deal. You look at Pepsi's situation, soda sales are a slowing.

And energy sales are rising. So Pepsi's looking at the drawn board here and they're like, all right, we got two options. We could end our distribution deal with Rockstar, which we started 11 years ago, and then start an energy drink from scratch. Call in Jesse and the rest of the team to come up with an XZ-action verb Mountain Dew drink. I think they could have called it Pepsi pumped. I think you go with any verb that sounds like it could hurt somebody.

Or instead of all that drama, you could just buy Rockstar for $3.8 billion and immediately become the number three player in the energy market. We're talking ASAP ASAP, ASAP, you're there. You're number three. Rockstar is behind Monster, which is number one. Red Bull's number two. Bang Energy is number four. Again, verbs that could hurt you. Again, I feel threatened as we're talking about these brands. Side note here, is it just us or is every energy drink in a huge and flashy can? for some reason has like bikinis you can buy. Always. And loud mentions of energy ingredients we can't even pronounce. They're in a separate fidge that looks like it's got some radioactive thing going on.

Things got extra torring. You need sunglasses before you like purchase the thing. It's so bright. So Pepsi decided to go the easy route. Pay 3.8 billion. Now it's number three and can spin off Mountain Dew into energy spin-offs. Jack, is there going to be like extra glucer in an octane on this thing? Maybe a side of an oocyte. So what's the takeaway for our buddies over? at Pepsi. To succeed as a beverage these days, you need to be a functional beverage. Snackers get to know this term. Functional beverage. It means it includes ingredients that are providing some kind of health value, not just sugar and not alcohol. First of all, water. It's hydrated. Yep. It's free. There you go. But for non-free things, we've noticed a lot of like CBD infused this, adaptogen enhanced that.

Probiotic added everything. Yeah, if you don't have probiotics in it, what are you even doing? For example, yesterday Budweiser launched LQD Creative Liquids, which serves hard green teas and hard coconut waters. No joke snackers, this exact type of functional beverage came out yesterday when Pepsi announced the news. It's for when you want to get buzzed, not wasted, but also weller. Apparently, Bud's claiming this is including hero ingredients for health-conscious indulgers. Apparently, if you drink this, you'll become a hero.

Right. It includes low alcohol, but also ambiguously healthy coconut. and green tea health benefits. Functional beverages. Does that mean it's got less antioxidants? We got a feeling pro-oxidants is the next trend. You're low on the antioxidants, you go pro-ine-oxidance. For our second story, with the economic and market pain going on right now, the government's been chatting about the B-word. A lot of chatter. We're talking bailouts. The stock market is down 20% from its recent high. True. The economy could be starting up a recession right now. So Jack and I whipped out the old Miriam Webster over here. Can we get the definition of bailout. When taxpayer funds are given to or loaned to private companies that are at risk of bankruptcy.

Okay, so the pro here when it comes to a bailout is you're saving jobs for being eliminated. You're keeping the business operating because you're bailing it out. The con is you're encouraging companies to operate recklessly. And this is actually called moral hazard. Right. Because if you're bailing them out when they're operating recklessly, they may just keep on operating recklessly. It's like a kid crashes a car and then his parents get him a new car. So true. And then he crashes it again. His parents get him a new car. And he's going to keep crashing it. By the way, every snack right now is like, I'm thinking of that one person who definitely did this.

Bailouts can cause moral hazard because you're going to get a new car. Okay, so Jack and I, we had to like lift with our legs, now with our backs, put the Merriam-Whibster book back up in the... Let's whip out the old history textbook. Yeah, and let's look at modern bailout history for a moment. September 15th, 2008, the government did not bailout Lehman Brothers. It did bail out pretty much every other financial institution. not named Lehman or a brother or a sister.

The big banks, the mortgage lenders, the insurance companies, they were all bailed out in the end of 2008. This was peak financial crisis. Then in 2009, you had another bailout, bailout of the automotive industry. General Motors and Chrysler were bailed out. Ford Motor Company was not bailed out. But, fun early snack fact here,

Ford put down its logo, that nice shiny blue oval, as collateral for the bailout. Yeah, isn't that epic? Yeah. Ford was like, we're not getting a bailout. We can handle it. this. Oh yeah. Somebody grabbed the logo, give it to the bank. Literally, they're like carrying it. Don't let it drop. Don't let it drop. They're like, we're good for this. Honestly, though,

if they hadn't paid back that loan, Goldman Sachs would probably own their logo. But they were good for this. They paid back the loan. They got their logo back. Then since 2018, PG&E, as in the Pacific Gas and Electric Company. California's electricity company, it's been blamed for the recent wildfires because, like, oh, power line falls and ignites a pile of leaves. They've basically needed a bailout and the courts and politicians are still figuring this one out. Yeah, that's TBD. 2019 farmers in the United States basically got a bailout. 28 billion dollars of taxpayer money went to the farmers who suffered because of the trade war.

Right, they couldn't sell soybeans. So that then brings us as we put the history textbooks down to our favorite question, who is getting the bailout potential rose? Who's getting the bachelor bailout right now? Well, no one definitively, but if it were to happen, this is where it could potentially happen. The first is cruise liner. Royal Caribbean and Carnival, they have 33,000 crew members each and nobody is riding on cruises. But cruise liners aren't integral to the U.S. economy.

No, they're not. So the second potential or bachelor is the airlines. Nobody is flying or booking right now. But they've got a decade-long history of profits and plenty of access to cash. Okay. Third potential bachelor, the oil companies. The price of oil has dropped 50% in just two months. But the optics would not be that good if you're bailing out one of the top polluting industries in the world in an era of climate change.

Okay, how about movie theaters? They're struggling. Hotels. Nobody's traveling. Bodegas. Fitness clubs. There's sweat everywhere. Churches, you don't want to congregate on a Sunday when someone might be sick.

This whole setup we just talked about, they're so fragmented. You just couldn't bail this thing out. It would also be weird for the government to bail out the churches. But who's filling those, you know, donation friends? Right, the big, like lacrosseks they hand out. So, Jack, what's the takeaway for our buddies over in the government who could potentially bail someone out? The only industry we think is worthy of a bailout right now is Boeing. Snackers, that's because Boeing is an industry.

We have one major airplane manufacturer in the United States, and Europe has the other one. Oh, and by the way, 600 companies supply the parts to Boeing 737 max alone, just that airplane, which means they're dependent on Boeing. Right. It has been one year since the second 737 max crashed, and honestly, when that thing's ready to be sold again, airlines might not even want it because of the coronavirus situation. And Boeing is reportedly maxed out their $14 billion credit limit, aka their credit card. And on news of that, the stock fell 18.

percent yesterday. It's down 55% since its record high. It's not clear if anyone's going to get bailed out, but if it is anyone, it could be Boeing. Because if you let Boeing go bankrupt, you might be letting those 600 companies go bankrupt, too. For our third and final story, this one's wild. We just found out about Apple's latest project. It's called codename Seymour. Seymour for now, technically, working term. This is an app that can replace your personal trainer on your iPhone. Honestly, terrible codename on this one. Seymour. Could have been sweat? Because Seymour does not sound like a fit guy. We definitely, the few Seymour's listening, but not the kind of person you think who's

crushing on the album. Now, this story is thanks to PFWTM. The best. We love PFWTM. People familiar with the matter. And some great reporting from 9 to 5 Mac. Right. There are some aggressive blogs out there that are perpetually obsessed with Macintosh computers.

And they tend to be pretty on point. It's pretty wild. Now, here's the thing, Snackers. Apple isn't just into tech goods. It's just like any other millennial. it's into health and fitness. So true. They've made a lot of interesting health investments.

Well, first of all, the Apple Watch may soon detect blood oxygen levels. No joke. So you could like, I'm not sure if you drop of blood on that. We're not engineers. Or if it's like wrapping around your bicep. We're also not doctors. Apple's also made some investments in fitness. Yesterday, it officially announced an initiative to get discounts at certain gyms if you meet workout goals

and those goals are verified through your Apple Watch. Right. You show up at crunch, you tag that thing to the treadmill. You do like 20 minutes. The Apple Watch actually connects with the treadmill, which is convenient. You hit your like sub eight minute mile goal and boom, three bucks off your next month. And then like beats per minute in the calories is actually a real estimate instead of just some random thing on the screen. Now Snackers, you may have noticed a theme here.

When it comes to the health and fitness investments, they all intersect at Apple Watch. Then comes Seymour. A standalone fitness training app. Right. This app is going to be streaming for you videos of hands-on, guidance in dance, core workouts, rowing. Jack, I'm out of breath on this one. Waits, stretch, run. Also, you said hands-on guidance. I'm pretty sure there's no hands involved. It's a digital thing. Screen-on guidance. It's not being literal. Now, this is going to be available

the next time your iPhone alerts you that you can update the operating system. And the idea is it's for like, you know, people who don't know their biceps from their triceps, as well as people who are cling lifting their like body weight times six. If you need instructions on how to do a bicep curl, it can help you there. If you're so intense that you're doing a bear complex, snackers, look it up. It's the most exhausting workout I've ever done. You can basically lift a house after you've done one of those things. Well, this app, which is yet to be named, we think it's going to be called Fitness probably. Apple doesn't get that created. This app can do both. Now, the idea came likely from a guy named Jay Blonick, who's the senior director of fitness over at Apple. He's

famous from Bowflex, which was like the infomercial beast of the 90s. Also, he was crushing videos back in the day when your mom was on a Nordic track. for Stairmaster. Now, he has a positive fitness philosophy. So instead of having, like, reach 10,000 steps, which is a one-size-fits-all prescription. You can only do that in, like, New York where you're walking everywhere.

It has the Apple Watch do, like, a ring of goals, which are adjustable based on your fitness situation. The goal is the completion. So, Jack, what's the takeaway for our buddies over? We're sneakily at Apple. This is the best evidence yet of the power of the Apple ecosystem. Snackers, Jack and I think that because we're competitive. Pairing it, Project Seymour, to the fitness tech leader, Peloton.

Okay. At Peloton, the proposition is that you spend over $2,000 on a bike. Piece of hardware. Then you have to pay $39 a month for streaming for one type of workout spin class. That's the software. For Apple, though, it's a different story. You already spent almost $1,000 on an iPhone or an Apple watch. A versatile piece of hardware. And then you can stream 10 different workouts.

For free. That's completely different. Project Seamore. shows how Apple's ecosystem is an advantage over digital fitness competitors like Peloton. Jack, can we start cooking dinner and you wake up for the takeaways for us over there? Pepsi is the proud new owner of Rockstar Energy, which it paid $3.8 billion for. And Pepsi should rebrand sugar and caffeine as energy that's more functional. Second story, with stocks down 20% and a potential recession looming.

Politicians are chattering about bailouts. And the only industry we think that could be bailout worthy would be Boeing. Third and final story, Apple is reportedly about to disrupt the fitness industry with an app for Apple Watch and for iPhone. The Apple ecosystem can bench basically like twice its weight over there. What's your Macs, Tim Cook? Don't ask me. I haven't benched it. We don't want to talk about it.

Just a couple of those 30. It's not even talk about it. It's about reps, not Max. Time for our snack fact. This one sent in by Carlos Aquilo, who by the way, retweeted it to us because we love relentlessness. Yeah, that's good. You may have heard, Nick, that Amazon was originally supposed to be called Cadabra. Right.

As in Abercadabra. Right. As in the magical catchphrase. This is when magical terms were like pre-Hary Potter, no Latin involved. But they also, Jeff Bezos also considered Relentless because, let's be honest, he's relentless. And Snackers, in case you're curious, go to Relentless.com. You can do it right now. We'll wait.

It'll redirect you to Amazon.com. Right. So Jeff was really covering his bases back in, like, 1997 with his web domains. Also, quick correction from yesterday's story Snackers. Bree Bird tweeted at us to remind us that bamboo is not a tree. It's a grass. Bamboo is not a tree.

It's a really big edible grass. Highly intimidated. Pandas love it. Snackers, fantastic to have you with this day. Jack, what are we having for dinner? You better go home. Also, H-Y-H-S-D. Have you had your snacks daily?

See you tomorrow. This is Jack. I own options of Peloton and stock of Amazon. 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 decision. Robin Hood Financial LLC, member FINRA, SIPC.