The Best One Yet - “@McConaughey... didn’t get hacked” — Twitter’s TBOY hack. Hasbro’s Scrabble app. UnitedHealth’s record (double) profit.

Episode Date: July 17, 2020

Twitter suffered its biggest hack ever, which could forever change its role as the direct-to-consumer communication platform. Hasbro’s new Scrabble app is causing aggressive drama among Scrabble purists, but the toymaker has learned its lesson from the ‘90s about cannibalization. And UnitedHealth just enjoyed a record $6.6B profit because you paid for health insurance but didn’t use it last quarter.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 Friday, July 17th. Hey, all you snackers out there, thanks for tuning into WTB-O-Y. There is nothing that radio likes more than a few vocal intonation. What's to deal with all that? I don't get it.

Sue's way too aggressive in the 90s. Perfect radio station, though, because this is the best one yet. And Twitter just had a T-boy, too. The biggest one yet. That's right. A huge Twitter hack knocked the stock and knocked the company's future. Our second story, Hasbro's new Scrabble app is getting a lot of hate from the purists that love to play Scrabble on a board. So Hasbro's ignoring the loud minority and cannibalizing its board games, finally.

For our third and final story, United Health just enjoyed its most profitable quarter ever. Because you have health insurance, but you're way too afraid to actually visit a hospital. But before we hit those great stories, the $600 a week extra unemployment insurance bailout checks end in two weeks. We're talking PQ, PPP, PPP, expires on August 8th. One bailout check, though, isn't expiring, and it isn't getting enough attention. We're talking the Lemonade Stand bailout. The Lemonade Stand bailout. Eight-year-old kids talking cool refreshments are feeling the quarantine burn this summer.

Yeah, you got ambitious Arnold Palmer upsellers, Jack. They can't rely on, like, just allowance money. So Kraft Heinz has the back of these thrifty and young entrepreneurs with lemonade stands, dishing out stimulus checks. We're talking the littlest bailout relief fund. Literally, that's the name of this thing, and it's by Kraft's Country Time brand. If you're under the age of 14 and you're selling lemonade this summer, pay attention. Yeah, these young CEOs could be getting an $100 visa gift card straight from Kraft.

I was pumping out pink lemonade on the corner of Spruce and Western Ave in downtown Brattleboro, which set the stage for a career in hospitality at the Olive Garden. Jack, I was posted up at 93rd Street and Park Avenue, because you catch more families on Park than you do on Lex, just closer to the 6th Street. Location, location, location. But when the littlest bailout relief fund ends up ending eventually, Jack, they're going to have to come up with something better at Kraft Heinz to support lemonade entrepreneurs. We're thinking a six-foot straw to encourage social distancing

and figure out a way that you can suck through a straw with your mask still on your face. Team up with Google already. Let's get drone delivery of this pink lemonade. This is great marketing. When you think of lemonade next time, you're going to think of those country-time tubs of yellow powder that you mix with a two-liter of water. When you can see the sugar crystals, you know it's good. Let's hit 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 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. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Twitter just got hacked, and here's how that could affect their business. I got to say, Nick, that hacking was T-B-O-Y the biggest one yet. So true. We got ourselves a case of an anonymous hacker who was able to log into famous people's Twitter accounts on Wednesday in not a pretty way.

Barack, Biden, Elon, Gates, Bezos, Kanye, Bloomberg, Apple, Uber. And a whole, actually, that's pretty much it. And then there's like a bunch of people who also have like verified blue check market accounts. who kind of like wish that they were hacked into? Dude, total fomo that Tim Tebow didn't get hacked. Absolutely. McConaughey's driving around in his Lincoln like, not me, not me, bro, not me.

He's calling his assistant and he's like, shut down my Twitter account. And they're like, why? Everything's fine. He's got the whole PR team on it. He's like, I gotta get hacked now. So once the hackers got into these like incredibly powerful politician,

business people, and corporate accounts, long words. They kind of state. a minor league scam attempt. Totally. Basically, they tweeted from these accounts, I'm rich, I'm feeling generous, send me a Bitcoin, and I'll send you two Bitcoins back. And surprisingly, enough people got duped that $120,000 worth of Bitcoin was made from this scam. Although, Jack, we got to step back for a second. Snackers, Jack and I are looking at this number. Bitcoin's trading it like just under $10,000. There are $120,000 of money that these hackers

made. So does that mean like 12 people got duped? Yeah, the dirty dozen. Or one like rich person sent 12 Bitcoin. With all a bunch of Bitcoins and way too much time. Now, Snackers, logging into Barack Obama and Joe Biden's Twitter accounts is like one of the biggest bank heists ever. And yet the yield that they got was really tiny. Tiny. You got, it's like getting into Fort Knox and you walk out with like a gold friendship bracelet.

It's like, you know, there was so much more you could have done with that hacking. There was a lot more gold. Why'd you go with the Bitcoin? Now, Jack Dorsey ended up shutting down all the accounts that had verified blue checkmarks because he didn't want any more unauthorized tweets going out. Yeah, I think that blackout of Twitter verified accounts lasted for like 12 hours or maybe a full day. I can't remember, but they're back on now. It was aggressive. So Snackers, Twitter stock ended up dropping 4% right after the news, but a few huge questions are now being asked. What if the hackers had

accessed President Trump's Twitter account and like declared war? That's serious stuff. That's history textbook changing stuff potentially. What if they accessed Apple's account and announced they were acquiring Tesla? That could cause some wild market responses on Wall Street. I'll tell you, they probably could have made more money doing that fake acquisition announcement than they did with this ridiculous Bitcoin scam. I mean, not that we're saying you should do this, but if you were going to do this, you could do this. You buy a bunch of Tesla stock. You announce on your hacked account that Apple's buying Tesla. Then you sell your Tesla stock for like 20% gain. and walk away with billions.

I don't know if we're allowed to give out blueprints like this, but I feel like we're in Oceans 11. What we just described is market manipulation of Tesla stock. That would be illegal and wrong, but it potentially would have scored these hackers more money than this weird Bitcoin scheme. The third big question we're asking is, how did this even happen?

Yeah, it seems like they may have tricked employees at Twitter or paid them to get master access to the Twitter accounts. And it's a little alarming that there's some master password, that unlocks all Twitter accounts? What is this, the sort of a thousand truths? Jack, I feel like this is a one, two, three, four, five situation, if you know what I mean. Yeah, Elon and Biden, I'm looking at you. So after all this has gone down, it could lead to some possible increased regulation of Twitter. That's the other big concern here. We're guessing we'll see Jack Dorsey and his Gandalf style beard in D.C. for another congressional hearing. Not eating food all day until after the

hearing. So Jack, what's the takeaway for our buddies over at Twitter? Breaking news might not get announced on Twitter anymore. Snackers, President Trump loves announcing big things on Twitter. Elon loves doing it too, and every brand does as well, except for Facebook. Yeah, Facebook's like, Mark Zuckerberg's like, check out Facebook.com slash Zuck to hear, to hear about my thing where if you give me one Libra, I'll give you two Libra back. Classic Zucking. Now, a huge reason why so many people are probably on Twitter is because they want first announcements, early announcements in the first place. I think Twitter's slogan is like, this is where news happens lies, something like that. So what happened on Wednesday was pretty scary

because that's where the news is happening. And newsmakers might stop making big announcements on Twitter to make sure nobody hacks their account and causes a bunch of panic. So if like just a small percentage of these verified blue checkmark accounts stop announcing things on Twitter, that could hurt Twitter's profits. And that's why the stock fell another couple percentage points on Thursday. For our second story, Jack, can you turn and cough for me? Health insurer you know. United Health didn't just have a nice quarter, didn't just have a good quarter. It didn't even have just like an expectations beating quarter. It had the most profitable quarter ever. Ever. Get these guys the two participation trophies. Snackers, everything in the healthcare industry

just feels, it feels absurdly confusing. The whole industry is just one big fine print. They don't even use size like Helvetica 14, not a thing. The doctor's like, sir, I'm sorry to tell you, but you have an acute, displaced fracture of your retitubule. You do a couple takes, you do a couple shakes, and you're like, so I broke my leg. So I sprained my ankle. The health care business model is complex, but the health insurance business model is surprisingly simple. Snackers, here's all it comes down to, bicep one, bicep two. Maximize premiums, minimize premiums, minimize premiums that patients and the employers that might pay for your health insurance pay monthly for health insurance. And then minimize payouts to doctors and hospitals.

Right, because your doctor visit for that displaced fractals. sure you're right, tibula. That is the cost of health insurance companies like United Health. They pay for it. Your health insurance company hates your tibia is what we're trying to say. Now, United Health made $6.6 billion in profits from April to June, which is double last year because none of those payouts we just mentioned were happening. None of those payouts happened because you literally weren't allowed in hospitals for the checkups or the elective surgeries. Well, let's say in mid-April, you had this weird thing on your thigh and you thought it should probably get checked out. You didn't go to the hospital because your hospital may have been overrun with COVID patients.

I've been eating Jack's cold oatmeal and I'm growing this thing on my thigh. I don't know if there's a correlation doctor. Or if you had like an actual surgery to like fix your ACL, you probably weren't going to the hospital either. No. Because of COVID. They said come back in mid, you know, October when we're done wheeling with your tibia. All the things that make the U.S. healthcare system by far the most expensive on earth. Jack, they did not happen. But what did continue happening is people kept paying for their monthly health insurance, they just didn't use that health insurance. Now, Snackers, whenever Jack and I dive snacks dial into a story like this, we try to find the one hero metric that tells the whole story. So Jack, what's the hero metric? The medical

loss ratio. Snackers, that's the percentage of premiums that are paid out for medical services. And for United Health, it touched a historic 20-year low of 70% last quarter, which means $100 worth of insurance premiums. They only spent $7,000. 70 on like actual health services. The last time they were this profitable was like when Y2K was the thing. So Jack, what's the takeaway for our buddies over at United Health? For every Econ Yang, there's a finance yang. Your first thought on this story is probably United Health stock, which rose 4% of the last week.

But just like that behavior change helped United Health, it hurt someone else's business. We're talking about the lack of surgeries, which also means less need for surgery supplies. And really fancy, really precise supplies for surgeries for like, doctors, you know, the scalpel. Really small instruments, Jack. I think they're really small instruments. The scalpel is produced by Johnson & Johnson, and that scalpel happens to be Johnson and Johnson's profit puppet. So Snackers, when we step back and look at the Econ Ying and the finance yang, Johnson and Johnson's profits fell 35% over the last quarter. While United Healthcare's profits doubled. For our third and final story, this one's wild. The new Scrabble app is getting the

worst reviews we've ever seen. But it's actually Hasbro's smartest. move in two decades. Snackers, we're talking about the new Scrabble app, aka Scrabble Go, which is causing some serious D-R-A-M-A. Our buddies at Hasbro turn the classic word-forming board game into an app that you can play on your phone. But then they hired someone from like Candy Crush My Little Pony or Lisa Frank to take over the rest of the design. This app is covered in glitter, and the reviews have been pretty scathing. Aggressive things. Case in point, one person said it's like being inside of small intestine of a unicorn that just ate a bunch of rainbow skittles. Another probably baby boomer user said it's seizure inducing and an obscenity. And then finally, this may be our favorite. Someone just said this

straight up feels like Tinder. So Snackers, it sounds like the Scrabble purists flooded the app store and gave it one star ratings. Aggressive, but then 8,100 of them ended up signing a change.org petition because they want Hasbro to go back to the old version of the app, not the freaking new one. It's quite a little scandal. But Hasbro is ignoring the feedback from that loud, tiny group and looking at the bigger numbers instead. That's because mobile game downloads have quadrupled in the coronavirus. And Jack, who is the number one mobile word game right now? Well, it's Words with Friends, which is one of the original Zucks I've ever seen. True. It's basically Scrabble started on Facebook. Now it's in its own app. It was like a, it's like Zuck enabled Zucking in that case. And it's owned by the company Zinga.

Right. But Words with Friends 2 now has 40 million. downloads because people are stuck at home and they want to play with friends. But get this, Jack and I are blown away by these statistics. Turns out Scrabble Go only launched in March, but it already has 20 million downloads. It's like one of the top five of these mobile apps. 20 million downloads is greater than 8,000 baby boomers who signed a change.org petition. Now here's why Jack and I are fascinated with this story. This isn't just a consumer trend. Scrabble Go has pure profit puppy potential. Hasbro is a toy company, but only 8% of its sales are digital. That digital segment, though, Nick, is a highly profitable segment that punches higher than its weight.

All right, so if we jump into the business model of this specific Hasbro app, it's freemium. It's a freemium model. Actually, you could almost call it freemium plus. If you download it, you have to see ads. Or you can pay $8 to download it and never see an ad. But here's the kicker. If you're really into the game and, like, users are spending like 100 minutes a day on the game, you can pay between $3 and $100 for in-app perks. For instance, instead of just having your board covered in squares where you can put letters, you can change the shape of a square to a flamingo all over your board and dress it up with a bunch of backyard decoration.

People are actually paying for those flamingos, and you can't get that kind of recurring revenue from a board game. Board games are kind of one and done purchases. So, Jack, what's the takeaway for our buddies over at Hasbro? Hasbro is finally over its cannibalization anxiety. Snackers, when you launch a new product, it can actually, end up hurting sales of your main old product accidentally. Case and point, when Tesla launched the affordable Model 3, it ate up all the sales of the Model S because it was like 90% as good as

the Model S, but like half the press. Classic cannibalization, Jack, I'm glad you laid it on us. So back in the 90s, Hasbro had the opportunity to turn Scrabble into a PC game you could play on your gigantic, like, Gateway Computer, but they didn't because they were afraid it would cannibalize sales up the board game. And then 10 years later, they ended up losing. their board game users to a fake version of Scrabble that was on Facebook anyway. Again, Words with Friends, the original Zucking. Again, Category 1 Zucking. Now, Hasbro is realizing it needs to go where players are, regardless of cannibalization

concerns. That's why we think this quote from the head of mobile gaming at Hasbro is critical. The app is going to substantially increase the number of people who are playing Scrabble. And Snackers, if you're Hasbro, that's the only thing that matters. Jack Kenyo, whip up the takeaways for us before the weekend. Twitter's hacking was the biggest one yet. And it could reduce the number of big announcements that actually happen on Twitter, which is what you go to there for.

Second story, United Health loves that you didn't get that expensive procedure done. But Johnson and Johnson hopes you get that expensive procedure. Third and final story, Hasbro finally turned its famous board game into an app. A trend is your friend, and the trend is for gaming and apps that are covered in $100 worth of glitter. Now, time for our snack fact today. This one, we got like two in one month from Joe Moore in Jack. I'm going to let you say it. Whoa, Wattusa. Not Wauwatusa everybody. It's Woh Wattusa like, whoa, whoa, whoa, Ms. Lippick. It's the best name we ever get to pronounce. Whoa, whoa, whoa, Wattusa. Turns out Joe pointed out, you know, A6 shoes. Everyone's seen Aisks choose choose.

I'm a big fan of A6. My wife only runs in Aisks. Yeah, they're a very academic running shoe. They're kind of, you know, they're not Nike's. They're like a little higher breed. It's the runner's shoe for runners. And turns out A6 is an acronym stands for anima sona incorpori sano, which is Latin for sound mind, sound body. Jack, that was the most mindful sounding pronunciation of Latin I've ever heard. I loved how you did that. Thank you, Nick. Now before we go, happy birthday to Nicole Vigliotti, who's getting married to Luis had to cancel this summer, but congrats anyway. We're sure it's going to be lovely. Early congrats. And happy birthday to Kevin Griffiths from D.C. who just turned 27 and also did something unprecedented. Get this. Both his sister and his buddy Ali both asked for this birthday shot-up.

And then we got to say congrats to Brenna Mulholland and Kelly Weigand, who are getting married tomorrow in lovely Knoxville, Tennessee. Speaking of UT Knoxville, Chloe King, happy birthday. We heard you're a senior there. And finally, happy birthday to Stefano Lightner, who turns 29 and just moved to SF. Snackers, have a fantastic weekend, and remember when you're six feet away from someone, yell, H-Y-H-Y-S-D. Have you had your snack?

Daily. We'll see you a Monday. Can't wait. If you know, you know. This is Jack. Nick owns stock of Apple and he owns a Bitcoin whose name is Ben. It hasn't done anything. 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, 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.