The Best One Yet - Bed Bath & Beyond’s “intervention,” Cronos cannabis’s humble-brag, and the new meme-messing internet law in Europe

Episode Date: March 27, 2019

Bed Bath & Beyond surged 22% for its best day in a decade, but because investors are having an intervention with management. Cronos’ quarterly sales surged 248%, but there was so much more to the Canadian cannabis company’s earnings report. And the EU just passed the biggest internet regulation yet that may make you have to come up with your own original humor.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's Wednesday, March 27th. And this is the best snacks daily. We've ever whipped up for you guys. This is the best one yet. I love it. Happy birthday to my number one oldest brother. Very nice. Happy birthday. Nick, his name's also Nick. Got it. Glad we got that in. Now, Markets rose by 50 points. Very nice. You know what else is nice? The three stories we got for you today. Incredible mix of stories. First is bed, bed, and beyond. Shares surge 22% because some investors finally staged an intervention. Jack, I hope we get to this bed, Bath and Beyond story, I don't know if we'll have enough time. Yeah, we're going to have a nice little Saturday. Second story is Kronos. The Canadian pot company released its earnings report,

and Nick, what's the opposite of a humble brag? It's a brag. It's a straight up brag. It was awkward. It was funny. Third and final story, the biggest tech regulation yet. We want you guys to know, because this could mess with your meme game. The internet will never be the same. It's completely different. Now, before we jump into that, guys, if you're in one of these six states, California, Arizona, Florida, Wisconsin, North Carolina, and then the little cousin of Vermont, New Hampshire. If you're in one of those, you're probably dealing with the avocado recall. Right, your avatose will never be the same. No, it won't. Well, it needs for the next month. This story boggles my mind, though. It's freaky. Now, this was a listeria kind of bacteria infection

on some potential avocados caught through a routine government inspection. I hope most recalls are caught through our government inspection. Yeah, the worst kind of recall, is six months into the, like, you know, everyone getting sick. So there's a fun, actually a scary fact we learned from this story. Which we did not know. We jumped into this story and we were freaked out. So you're supposed to wash the outside of your avocado? Apparently before you eat it.

Yeah, why? I'm not licking the crust. No one eats the skin that I know. Turns out that the blade that cuts through your avocado, it touches the skin and therefore it contaminates the avocado meat. As you're going through trying to get that perfect having situation, the blade the entire time is just dragging germs through there. Another thing for us to be afraid of.

Apparently you should wash everything. The big question is this, what shouldn't you wash? I'm hoping bananas. I mean, please, spare me the banana washing. Where is the end? Guys, before we jump into our snacks daily, just a little more thing you got to know. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks are about the hair ain't 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 recommending any security. 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, Bed Bath and Beyond searched 22% yesterday because investors are staging an intervention. I feel so bad for the company. This was so awkward. This is just weird. This was the biggest stock gain for Bed Bath and Beyond in like a decade. It was basically because someone pointed out how terrible the company is. It's like if you were at work and your boss fired you and then the entire office got up.

They start slow clapping. Yeah, yeah, we kind of agree with him. But not like a dead poet society like your awesome slow clap. More like a celebrate you're leaving. Yeah, and we're not going to do like a cake at the end of this thing. So three new activist investors control about 5% of bed bath and beyond. That's a lot of shares. And that's enough to like get attention.

And by activist investors, we mean like hedge funds, companies that have a lot of money to spend. These are big league investors who have very strong opinions. And they want to do one thing in particular. Replace the entire 12-person board of directors and the CEO. And there's a reason why they're not that happy. Yeah. Shares are down 80% for Bed Bath & Beyond since 2014. Bed Bath and Beyond is one fifth of its former cell.

Guys, sales for the company have fallen in each of the last seven quarters. So these activist investors, they're staying. aging and intervention. They're like, we have to do something. They're like, is everything okay, Beth, Math, and Beyond? We got to talk. Sit down. Needless to say, shareholders are relieved. Okay, so here's the interesting thing. What's the core criticism of these activist investors? Not enough bed and bath and a little too much beyond. They think the company has just gone out of control doing everything in a completely disorganized way. Well, first of all, in this tough retail atmosphere, It hasn't branded or differentiated or made unique any of its products.

No one's like, oh, you really like my, I don't know, my lamp? Yeah. It's a bed, bath, and beyond. It's not the lowest price. It's not the best customer experience. These shelves are bed bath and beyond. No one says that. Yeah, they have a thousand stores, but those stores, according to the analysts, are cluttered.

They're dirty. The stores are out of control. You walk in. Last time I went to a bed, bath, and beyond, we had to use the buddy system because you just get lost. This thing is insane. Right. So they want the management. The new management should sell off its non-core brands, which include Bye-Buy-Babby, Christmas tree shops, and World Market, among lots of other changes. Full disclosure, I had never heard of Bye-bye baby. So, Jack, what's the takeaway for our buddies over at Bed Bath and Beyond? It's all about leadership. It's so true. Just a few people lead a company, but just a few people have a huge impact on its direction. Nick, the CEO has been at the company since 2003. Oh, my God. He's been running the show since before Facebook was a thing. He's got the same parking space. Every year he gets to like his annual review.

And HR is like, so any new ideas? Nope. Okay. See you next year. Now, here's the other thing. He's been getting paid $15 million while the stock's been sliding that ridiculous amount we've been talking about. These activists, they're really loud, these activist shareholders, and they sound pushy, but they are going to suggest surgical changes, and that could change everything with new management.

For our second story, cannabis producer Kronos, just to a little. an earnings report that highlights some like absolutely hilarious things about the pot industry right now. You thought financial reports were boring. Yes, you thought it was 40 pages of words that no one can spell. Unlike page two, Kronos defines how it weighs a kilogram of marijuana. That was an amazing section. Then it goes on to tell you it's breaking down dry cannabis versus oil cannabis when it's selling things. This can be pretty fun stuff. There's a great owner. There's a few Canadian pop producers that are publicly traded. it true.

Chronos is one of the smallest and cutest of the mall. It's really adorable as a company. Now, when it comes to how they actually did last year, let this number sink in. Their sales jumped 248% over the fourth quarter from 2017's fourth quarter. That is pretty darn good. It's very nice. So sales like tripled or quadrupled or something. And that's because Canada recently legalized cannabis in October.

Yeah, that got things like kicked up zero to 60 when it comes to pot sales. Right. But this company, we got to pull. put this in perspective. The whole company only made $15 million of sales in all of 2018. So it's growing ridiculously fast, but it's baby, baby small. It's still adorable. That's like the amount of sales of your local Dunkin' Donuts on like High Street in your local town. Now, there was one fascinating theme to this earnings report we got to focus on. The future. Technically, quarterly reports are supposed to be about like your last quarter.

Right. You're supposed to break down what happened in the most recent quarter. Super straightforward. But that's not what Corona is focused on. No, because it's caring about what's going to happen to legalization in the future. This company doesn't have much of a past. No, it's kind of like a high school summer internship, you know? Yeah, you apply for the job and they're like, can I see your resume? And you just have your name and your email. There's like, three bullets that your mom helped you with.

But you convince that person to hire you for your potential. You're like, I'll do anything. I'll do anything. The CEO, and this is a quote from the report, The growth potentials in the cannabis industry are vast. That's what he's focused on. And then we noticed a really interesting code word in here. Well positioned.

The CEO kept saying they were well positioned. And when we hear well positioned, we're thinking one thing. Yeah, I haven't done anything yet, but I am ready. I am here. It's like the kid in right field on the small fry team who's ready, but the ball never goes over. Always in an athletic position, not making any moves. Now, the company didn't even mention their annual or quarterly sales. until page 13.

So Jack, what's the takeaway for our buddies over at Kronos? When you need help, ask for it. Please. Kronos is so much smaller than its other competitive Canadian pot-producing companies that are publicly traded. Yeah, so it's getting help from a tobacco company. A big brother. Altria, this is the owner of Marlboro cigarettes.

It's a giant American tobacco powerhouse. And just a few months ago, Altria bought like 45% of Kronos. Yeah. And that's because there's no growth prospects in cigarettes, and it really wants to get a foot in this cannabis industry before it becomes too late. And so Kronos is loving this because Kronis is like, you know what, this older sibling of mine is going to bring distribution expertise. Yeah, connections, lobbyists. And like, how to deal with regulators. It's a wonderful partnership, and Kronos is hoping it'll help it grow big.

For our third and final story, we're covering the aggressive new link ban. Oh, yeah. It's the biggest internet regulation yet happening in the EU. Yeah. And we know this is happening across the pond, but, Classic Snacks Daily style, we jumped in because we know this is going to mess with like your influencer future. This is going to mess with your meme game. If you're trying to, you know, drop a line about Forrest Gump and some chocolates, may not be happening anymore.

So the new law will end the wild west of the internet. And that's exactly what the EU just passed. Yeah. It's banning the sharing of links or the posting of videos or the uploading of anything that is copyright protected and doesn't belong to you. Now, some haters at a group called like the German League of Online. Pirates. That's a real thing. It's a real thing. They called this a dark day for internet freedom. So if you're like a Facebook all-star and you get 100 and 200 likes per post because you're putting up funny stuff on the internet, that's probably not your stuff. You probably just took it from a movie. You're going to have to actually think of original thoughts now. Yeah, believe it or not, we can't just like pull humor from other people's humor. Now, this sounds like this whole law and this whole regulation is an exaggeration. Sounds like we're making this up. It's not. Not the case at all. All, 12. 28 countries in the EU have two years to basically make this happen.

So here's what this actually means for you on like a day-to-day basis. This law, it's targeting Google, but it affects everybody. So first let's talk about Article 13. My favorite of the articles. Which is being dubbed the end of memes. Basically, if you're trying to drop a line in a post on a friend's page about, you know, winter is coming. Yeah, for Game of Thrones, not happening.

You got to do something more like winter is on its website. Way? Winter is coming belongs to HBO. You can't post it. Exactly. Article 11. It's going to require Google and Facebook and other tech giants to build in filters with AI that automatically prevent you from posting that.

Now, we're not talking about companies posting these things. We're talking about regular old human beings. It wants to block any user-generated content that references any copyright material no matter who you are, even if you're a bot. The funny thing about this is the biggest opponents of a lot, which are Reddit, Wikipedia and Pornhub, among others. They've just been loving this Wild West situation. They have been thriving.

It's been incredible for them. So, Jack, what's the takeaway for our friends who are everyone who uses the internet? The U.S. talks about regulating the internet. The EU actually doesn't. Yes, remember those four beautiful letters, G, D, P, and R from a few years ago? Online privacy regulation. That was big regulation from Europe a few years ago, all about privacy. Now we got the EU link ban, which is banning, you know, copyrighted stuff.

from being posted by others. Yeah, basically why is this happening? The EU is annoyed at American tech companies. It's not happy. They are really annoyed at Google, Facebook, Apple, and Amazon. And so they're passing these laws and no one's stopping them. Nope. And if you're Google, this means you could end up paying fines if you were complicit in this pirating.

Jack, can you whip up the snacks daily takeaways for us? Sure can. Thank you. With the EU's new link ban. You got to know. The U.S. talks about regulating the Internet. The EU actually does it. It's so true.

This is going to, this might affect some study abroad rates, Jack. Bedbath and Beyond shareholders cheered this big intervention because it's all about leadership. I lost part of my soul in a bed bath and beyond. And Kronos is asking for help because it's just a little guy and it's getting it from Tobacco Giant Altria. It's adorable and our favorite words from the earnings report. It is well positioned. Now, time for a snack fact of the day from Snacks Daily. Jack, what do we got here?

In Switzerland, there is an animal cruel. law. This is amazing. That bans owning just one guinea pig. Incredible. If you own a guinea pig, you need to own two guinea pigs because you need to give it a friend. You can't deny it that, right? You can't let it live in isolation. And that's fair. Cuckoo clocks and animal companionship. Go Switzerland. Now, a couple other awesome stories we're covering in the Robin Hood Snacks daily newsletter. First, Lyft is opening up bank accounts for its drivers. And then Uber dropped a cool $3 billion to buy its Middle East rival, Corrine. Awesome to have you guys on the Snacks Daily Pod with us. Remember, we got to have you

click subscribe and give us a five-star rating. We will talk to you tomorrow. Can't wait. 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 investment decision. Robin Hood Financial LLC, member FINRA, SIPC.