The Best One Yet - 🐣 “@cquired” — Twitter accepts Elon’s offer. Lululemon’s new club. AriZona’s 99-cent cans.

Episode Date: April 26, 2022

The Twitter board changed their minds — they decided to accept Elon’s offer to buy Twitter. Lululemon just launched an athleisure club for $39/month because the more ya sweat, the more ya spend. And while the price of everything goes up, the price of AriZona Iced Tea cans are still 99 cents — We’re looking at how this is humanly possible.$TSLA $GPS$TSLA $GPSFollow us on Instagram, Twitter, and Tiktok: @tboypodWatch us on Youtube: https://www.youtube.com/channel/UCly3md3CbnTFJP83lVUEcjwWant a Shoutout on the pod? Fill out this form:https://forms.gle/6xmhTDP8Tp6CjTrZ9Got a Fact of the Day? We got a form for that too:https://forms.gle/ZYRQe4m7o4Rv4exR6Learn 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. It's Tuesday, April 26th. And today's pod is the best one yet. It is a TVOY. Jack, what's our first story today? The least expected acquisition of 2022 is now Instagram official. Yeah, Elon Musk has acquired Twitter.

It's official. Yeah. For our second story, Lulu Lemon just launched an athleisure club for $39 a month. Yeah, the more you sweat, the more you spend. And our third and final story is that classic Arizona green tea can with ginsing and honey. Oh, Jack, a huge can. It's 99 cents. Always has been. Always will be. We explain how that's humanly possible. Spoiler alert, it's not.

But Snackers, before we hit that wonderful mix. Honestly, a fantastic mix did not expect the Arizona iced tea on the same day as Twitter. Our buddies over at Starbucks decided to up and publish unsolicited coffee advice for us all. Yeah, Jack and I were on the Starbucks website, and we noticed an article they posted about how to customize your beverage. They like fancy beverages. So if you want a medium coffee, get the heck out of here. Get this wild statistic, though. When it comes to variations and customizations on Starbucks drinks, Jack, how many options are there? There are 170,000 variations on a Starbucks caffeinated beverage. 170,000. Over at Dunkin Donuts, Darlene just whips up a lodge regular and calls it a day.

There's only two options, large or extra large or extra regular. Or two pumps or three pumps. But at Starbucks, they have permutations that a GMAT math problem would have. Yeah, Starbucks, they don't do coffee. They do logistics. Now, the most popular Starbucks customized drink, according to this article, is also the largest name drink. Jack, have you ever enjoyed the iced brown sugar, oat, milkshake, and espresso? No, but I bet you have. Yeah, it's delicious.

That's not a drink, Nick. That's a paragraph. The problem, Jack, is that I go in. I got to pause midway through the order so I can catch my breath. Breathe from your belly. Not your lungs. If you're enjoying this pot and you're getting a coffee right now, Jack and I don't want to stress you out. But you got 170,000 options.

It's a lot of options. Let's memorize our three storms. 15 years before this song, two boys from the Northeast met in the dorm. They had an idea that caused a cultural storm. It's the family to practice. 50% that's a fat tip. Tea Boy City on your at list. If you know, you know, because we're ready to go.

We can't wait no more. So just start the show. Start the show. For our first story, last week, Twitter didn't want to get acquired by Elon Musk. But yesterday, Twitter got acquired by Elon Musk. Actually, this all began really 12 days ago. And it began like all great acquisitions. Begin with a snarky letter.

Elon Musk wrote a snarky letter to Twitter's board of directors offering to buy the entire company. And he said very clearly, this is my last and final offer. It was $54, $20 to share. Again, because $69 is completely overvalued. Twitter. Right. And that valued the company at over $44 billion. Kind of the classic, I'm the richest man on earth and I want to treat myself kind of a thing. Now, Twitter's board responded to Elon's offer with poison. That's how badly Twitter did not want to get acquired by Elon Musk. Financial defense mechanism. It's called the poison pill. And we covered it last week on this

pot. We did. Jack, how would you describe a poison pill if we just want to extend the medical analogy? It's a self-prescription to not get acquired, like to protect yourself. If you got a case of Elonitis where Elon wants to acquire you, you would take a poison pill. If you don't want to get acquired. But Twitter's board yesterday changed their mind. Total 180. They edited the tweet. They announced yesterday they have accepted Elon Musk's offer and will be bought entirely by Elon Musk. Ifso facto, Twitter is now Tesla's half brother. Yes, that's actually really good. I think that's genealogically correct. Twitter's stock, by the way, RIP, it's going to go after Elon buys all the stock. So we know what you're thinking. How and why did Twitter's

board do a complete 180 over the weekend? Like, what were they doing over the weekend, Jack? Well, we recognized three types of pressure that have been laid upon Twitter's board the past couple weeks. Three types of pressure. So the first pressure, stock markets, they're just down. Stock markets are down. And as tech stocks are falling, Elon's 5240 a share, that's a cash offer that looks better and better every day. Pretty pretty, pretty good. Also, Twitter stock is a perennial underperformer. Yeah, and Elon's offer to buy that stock is about 38% higher than where Twitter stock was just back on April 1st.

The second bit of pressure is proof that Elon isn't messing around with his offer. Elon apparently wasn't joking. He got the cash. And a lot of people were like, how was Elon going to get the cash? A lot of people thought his offer wasn't serious. but he got a whole bunch of investment banks to put up $25 billion in loan commitments to help him buy Twitter. And Elon is going to toss up the other $21 billion in cash to round out the offer. And he's probably going to raise that cash by selling his stock of Tesla.

Which leads to the third pressure on Twitter's board, Elon's bullying. Yeah. No surprise. Elon's been using Twitter to troll Twitter's board for like two weeks aggressively. It's the most ironic use of Twitter and Twitter history. And he's been meeting with big Twitter shareholders to win their support for his offer to put even more pressure on the board to accept. Okay, so Jack, looking at the whiteboard here, we got stock market pressure,

Elon's money pressure, and Elon trolling pressure. A lot of pressure, so the board changed their mind. So Jack, what's the takeaway for all our buddies over at Elon's Twitter? Now that Elon is going to own Twitter, he shouldn't forget Jack Dorsey's lesson, which is a playground with no rules, is chaos. A playground with no rules is chaos. Twitter has underperformed as a business, but it's still the number one speech playground that's out there. People go to Twitter to make statements. And that's probably because Twitter has rules and enforces those rules. Well, Jack Dorsey

co-founded Twitter and was CEO before Twitter had so many content moderation rules. Yeah. And instead of nuggies and wedgies, like on the playground, the worst. On Twitter before there were rules, you just have like ugly digital nastiness. Which is why Jack Dorsey said, and we quote, we didn't fully predict the real world negative consequences of unrestricted free speech. And Jack Dorsey elaborated on those negative consequences, describing them as... As abuse, harassment, troll armies, manipulation, bots,

and coordinated misinformation campaigns. That's what you get on Twitter when there's like no rules. Well, now that Elon's going to be in charge of Twitter, he shouldn't forget Jack's tough lesson, which is a playground with no rules is chaos. And now a word about our sponsor, Robin Hood. So for the last three and a half years, Jack and I were running a startup within a startup, basically. We turned our company market snacks into Robin Hood Snacks, the newsarm of Robin. And at Robin Hood, we co-hosted the Snacks Daily Pod that you got to know and love.

At Robin Hood, we also got to hire an awesome team of news people who run the Robin Hood Snacks newsletter. Wild fact here. The biggest newsletter in America, Robin Hood snacks. A key detail, though, not many are aware of is the editorial independence. So Jack and I set it up so that we could independently cover the most interesting and most important news stories of the day. Robin Hood's commitment to free, digestible news snack style was an awesome differentiator. Yeah, if you're not investing in Robin Hood yet to get started, go to robin hood.com slash t-boy and choose a free stock. That's robinood.com slash T-B-O-Y. Certain limitations apply all investments involve risk. Robin Hood Financial LLC, member SIPC. By the way, Robin Hood is no longer

affiliated with us or the podcast. For our second story, Jack, what's the biggest size they sell in Husky? 16 Husky, Nick. Every time, 100% of the time. Second story, Lulu Lemon is tired of just selling you stretchy yoga and jogger pants. Don't with it. Nick, I'm actually wearing Loulemon pants right now, so shouldn't I take over? After you. Please proceed. All right. Well, Lulu Lemon just announced they're launching an athleisure club. Those are our words, but it's the best description of what this club is. Honestly, it's an athleisure club. Nick, in 2019, on this pod, we covered Lulu's bold five-year growth plan.

Do you remember the goal? I remember well, Jack. It was double Lulu Lemons revenues. Well, Lulu Lemon finished that goal a year early. So they pledged last week a new five-year goal to double Lulu Lemons revenue. Okay, so Jack, how are they going to double revenues again at Lulu Lemmon's revenue? Well, one way is they're going to add products for tennis, golf, hiking, and they're going to do sneakers, too. But Jack, what's the cooler way that Lulu Lemon is going to double revenues again?

An athleisure club. Behold, Lulu Lemon memberships and Athletesier Club. Now, Lulu Lemon just announced last week a two-tiered membership that's coming this fall. There's a free version, which is basically a glorified loyalty program. You're going to get access to early drop. So if there's a slam and salmon sweater that suddenly comes out, You're going to get it. So that's pretty basic.

But then there's a paid version of this membership, which is $39 bucks a month. That's pretty expensive. Is that Club Lulu or is that Club Apple? This is a Soho House for Schfittendenet. Exactly. But here's what Jack and I found so fascinating about this Lulu Lemon story. The way they described it was all based on their belief, the future of fitness is hybrid. The future of fitness is partly online from your home, like streaming.

Yeah, it is. And partly in the gym like it always has. Exactly. And so is this club. Yeah, for example, the online part, that's mirror. The like tech fitness product that they acquired for half a billion dollars just a couple years ago. Now, right now, you have to buy a $1,500 mirror to stream mirror classes. But this fall, they'll let you stream mirror classes on any screen.

So that's the online part. But when it comes to the in-person fitness, Lutl Lemon, like, got its friends together to hang out. Yeah, they got a handful of like boutique fitness studios, like Pure Bar, Rumbleboxing. Great place. What's it called? The Dog Pound? in San Francisco?

No, I mean, sounds dangerous. If you pay this $39 a month to Lulu Lemon, you can take classes at these in-person studios as well. And that's Lulu Lemons' Athleisure Club. And because the future of fitness is hybrid, they think people won't want to drop $150 bucks a month for an Equinox gym membership. You don't need a gold-plated bench press.

You're working out from home. Instead, just pay a much more affordable $39 because you're working out at home most of the time anyway. Stretch from a studio, do it at home, and get discounted Lula while you're mid-Shavasana. So, Jack, what's the takeaway for our buddies over at Lulu Lemon? Lulu is avoiding the Peloton model. Go in a class pass instead.

Okay, this line also from Lulu's Investor Day, also resonated with us. Immersive Fitness Marketplace. Lulu Lemon said they want to become an immersive fitness marketplace. Because when Lulu bought Mirror in 2020, we thought they were trying to have their own Peloton. Right. But when they mentioned Marketplace, that means Lulu doesn't want to be Peloton. They just want to be a middleman instead. Yeah, Lulu Lemon and Mirror.

They have their own instructors. They're doing their own videos for working out. But instructors in their own videos, those are some of the expensive fixed costs that have Peloton in deep trouble right now. So Lulu Lemon's new membership club is going to be with other instructors from other studios. Right.

More class pass, less Peloton. Lulu Lemon isn't just creating a club. It's actually building a tech platform. More class pass, less Peloton. For our third and final story, as every company is raising prices right now, one single company is not. This is our story of the legendary 99 cent huge can of Arizona iced tea. Okay, so Jack, how about that list of famous cheaper than things we were working on?

How's that looking? We only found one. Yeah. We said in Prague, everyone knows that beer is cheaper than water. We were like, what else is like that? Yeah, we couldn't think of anything. But over at Arizona beverages, their huge can of iced tea is cheaper than an empty can of that ice tea. Pretty much, yeah.

Let's talk about Arizona beverages. They're not based in Arizona, to be clear. They were founded in Brooklyn and now based on Long Island, New York. And they're called Arizona because the founder's wife like the pastel Southwest color scheme that's on their cans. And the founder's wife thought that Arizona is a place where you'd want, you know, water because it's a desert. Now, wherever you're getting beverages, you've seen Arizona. Ice tea because like the can looks like 1996. The cans are also huge. They're 23 ounces. I've never seen a can so big. The only thing bigger than the cans is the founder. Don Voltajia. The founder of the

company is 6'8 and runs the business with his two sons. Now this strong island based company is worth about $4 billion according to Forbes and it's tough category it's in. They're competing against Coca-Cola and Pepsi. Both publicly traded companies worth like 250 billion combined. And despite that, Arizona ice ice ice. T is famous for one thing and one thing only. And Jack, what is that one thing? 99 cents. That's it.

The 99 cent price is written right on those huge 23-ounce cans. Voltajio actually set the price 30 years ago. Hasn't changed it ever. And he insisted on putting the price on the can so that your local 7-Eleven can't charge you like a buck-19 for. So Jack and I are looking at these cans. How has the price not risen in 30 years? Jack, can you share the data?

Yeah. In the past 30 years, the price of high-finding. fructose corn syrup, which is an ingredient on all these beverages, has tripled. Jack, in just the past 18 months, the price of aluminum cans has doubled. Gas prices, labor prices, they're all up. How has the price of a Arizona drink not gone up to? Oh, 99 cents. That's worth way less than it was 30 years ago, too, you know, inflation. So there is huge cost and inflation pressure to raise the price of that can of like whatever, but the Voltaggio family won't bunch.

It's still 99 cents. It hasn't changed. Has it, Jack? What? That's not a can now. It's not a can of Arizona. I saw it downstairs from the studio. I was like, I got to buy this.

Actually, it was two bucks. 99 cents. They will not budge, even though there's no chance. It's profitable after all these years. Kind of tastes like an adult Capri's son. I'm just going to put that out there. So, Jack, what's the takeaway for our buddies over at Arizona iced tea? Sometimes you sacrifice a lost llama to win.

a profit puppy. The 99 cent price of those iced tea cans, that's not a price. That's a marketing campaign. Yeah. The unprofitable ice teas they sell for 99 cents, those make up only 25% of the Arizona beverage business. Yeah, but 75% of Arizona sales come from more expensive, more profitable goodies. Exactly. And because customers are so absurdly appreciative and loyal to Arizona because of those 99 cent iced teas, they love anything Arizona makes. Jack, how about I? gallon of Arizona Arnold Palmer. That's a profit puppy. Jack, how about Arizona

nacho cheese microwaveable grab and go? That's a real product, and it's also a profit puppet. Customers are so thankful for Arizona's Lost Lama, then they'll buy the profit puppies too. That's the story of the 99-cent can of Arizona iced tea.

It tastes pretty good. Jack, can you whip up the takeaways for us over there? Elon is buying Twitter, which will be his fourth major company he controlled. But he shouldn't forget. at Jack Dorsey's lesson. A playground with no rules, it's chaos. For our second story, Lulu Lemons at Leisure Club. It's part in person, part online, and part shopping. Yeah,

it's a strategy that's less Peloton or class pass. Our third and final story is those legendary 99 cent cans of Arizona drinks. They used to be profitable, almost certainly aren't anymore. Yeah, sometimes you sacrifice a lost llama for a profit puppy. I still got the corn syrup, I think, all over my face. High fructose. You don't. You don't. I want to mess with the low fructose stuff. Don't touch the low fructo stuff. Now, time for our best fact yet. This one sent in by Jack and me because we thought it was pretty cool fact to share with you.

Jack from Vermont, where I'm recording right now, and Nick from San Francisco where he's recording. Right here. Speaking of the internet, Google is typically the most trafficked website in the world. Yeah, if you don't believe us, Google it. But one company got more web traffic than Google did last year. And Jack, what was that one company? beat Google in like first time in a long time.

TikTok. TikTok. TikTok got more web traffic than Google in 2021. TikTok dethroned Google from being the top of the internet. I mean, people spend an hour on TikTok on average per day, right? Well, ironically, TikTok beat Google because everyone was TikToking the customized Starbucks orders that they were doing on TikTok. 170,000.

Everyone listening, whether you're enjoying that iced brown, sugar oat, milkshake, and espresso, or the classic 99-cent Arizona iced tea. Jack and I will see you tomorrow. Thanks for listening. We'll see you then. If you know, you know. And before we go, happy birthday to Katie

with the fitness instructor side hustle having a birthday in Milton, Massachusetts. Happy 21st birthday to Sean Green in Tuscaloosa, Alabama. And Christy Draw, happy birthday in Taipei, Taiwan. Ashita Singh, big shout out to Miami, Florida.

And Gita turning 70 in Aurora, Illinois. Happy birthday to Alma in Thousand Oaks, California. And Ariya Vasquez over in Irvine, California. 53rd birthday to Breyer Chung in Roderden, Oregon. And Jack, Alicia Keltz, just paid off her very last student loan. H, yeah, Alicia, H yeah. And to anybody else celebrating something today, make it a T-Boy. Celebrate the wins.

This is Jack, Nick on stock of Apple, and Nick own stock of Lulu Lemon, and we both own stock of Pelton, Twitter, and Robin Hood. And now word about our exclusive sponsor, Robin Hood. Look, we're not tech guys. We're not engineers. Nick, I'm no product manager. You look great, but we're not technically. When our computer's not working, Jack and I turn it off,

and then we turn it back on again. But when we moved to California to join Robin Hood, we were in tech's mecca. So we were soaking up as much about the tech industry as we could. One thing we saw about the tech industry at Robin Hood was insane customer focus. Every product launched, every tweak made to the app

was a laser-focused move on customers. Robin Hood would be interviewing hundreds of users to figure out of one tweak of one button in the app would improve the experience. Inside of Robin Hood, we saw that everything the company did was focused on the best outcome for you, the customer. If you're not investing on Robin Hood yet,

to get started, go to robinode.com slash T-boy and choose a stock. That's robin hood.com slash T-B-O-Y. Certain limitations apply. all investments involve risk. Robin Hood Financial LLC member SIPC. By the way, Robin Hood is no longer affiliated with us or this podcast.

Beautiful. Oh, my God. Thank you for your patience, Jack. You're an incredible partner. So, so appreciative. I wouldn't say that on the record, Adam.