The Best One Yet - ❤️‍🔥 “Bitcoin's shotgun wedding” — FTX + Binance. Sweetgreen’s Rice Krispie. Carvana’s fender bender.

Episode Date: November 9, 2022

Bitcoin dropped 10% because of crypto’s 1st mega-merger: Binance and FTX. Sweetgreen’s newest product is a new dessert — but it’s really a recreation of an old dessert. And Carvana’s stock has plummeted 98% because it broke the #1 rule of sustainable growth: Hire Slow, Fire Fast.$BTC $ETH $SG $K $CVNAFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn 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 Wednesday, November 9th. And today's pod is the best one yet. It's a T-boy. It's the best one we've ever done, Jack. Yeties, as of this recording, we have no clue what the results of the election were. No idea.

Midterm election votes. Still being counted, could take days. These things take time, folks. They take time. You know what doesn't take time? Jack, what's our first story? Bitcoin dropped 10% after the awkwardest merger hookup we've ever heard about. FTX and Binance.

hate each other and now they're getting married. For our second story, Sweet Green just announced their earnings, but we're focused on their new product, their first dessert. It's not a rice crispy treat, it's a crisp, ricey treat. And our third and final story is Carvana. The used car marketplace has fallen by 98%. Because Carvana broke the number one rule of sustainable growth. But Yetis, before we hit that fantastic mix,

an absolutely perfect mix. I love this mix. Quick reminder before you start your Wednesday. Quick Wednesday reminder for the Yetis out there. Don't wander into someone else's home if you're not invited. We repeat. Drunken home intrusions are not cool. We suggest you don't do it. Here's the news, Yeties.

The chief financial officer of Tyson Foods did exactly that. He went out. He had a few too many pinos. Boom. He fell asleep in the wrong home. We're talking about the great grandson of the founder of the Tyson Meat Company. He's 32. His name is Tyson and he's the CFO of Tyson Meat. But he fell asleep in someone else's house. So he's probably not the CFO of Tyson Meat anymore. But that's not even the wildest part of this story.

No, it is not Jack. Yet he's remember the nose biter? Yeah, the nosebiter. The Beyond Meat C.O. who was so hungry, he almost ate a dude. Yeah, last month, the plant-based meat executive bit of human-based nose. It turns out both of these two insubter, who is... incidents were eerily similar. It turns out both of these mistakes were awkwardly alike. Because one of these men fell asleep in someone else's house. And one of these men bit someone else's schnaz.

One was the CFO of a major company. One was the C.O.O.O. of a major company. One leads America's biggest meat company. And one leads America's biggest not meat company. And both committed the crime in the same state. Arkansas. Sorry, in the same county. If you want to bite a nose and steal a bed, go to Washington County, Arkansas.

These guys seem to be cut from the same broth. They are brothers from another hen. So again, quick Wednesday reminder, yaddy. A quick Wednesday reminder for all the besties out there. If you want to have the best one yet, if you want to make today a tea boy, drink responsible. And bite responsibly too. Let's hit our three stories. Let's just keep it simple.

Let's get our three story. Fifteen years before this song, two boys from the Northeast met in the dawn. an idea that costs a 40%. 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, in the most dramatic week of crypto this year, Binance is getting married and acquiring FTX. It's crypto's first ever mega merger, but the loser is confidence. Jack, can we just talk about great writer? We haven't talked about her on the pod yet. Nora Ephron, fantastic writer. When Harry met Sally, sleepless in Seattle, you've got mail, anything else Meg Ryan and Tom Hanks are in. She doesn't write about love.

She writes about how I feel. Well, most relationships in life start well and end well. Some start bad and end bad, actually. But in Nora's writing, the relationships in her movies, they start badly, but then they end pretty well. Well, I think she just wrote the script for yesterday's Wall Street Crypto Stories. Yeties, let Jack and I introduce you to our two main characters. The two crypto exchanges, Binance, which is run by Shang Penziao and FTX. Which is run by Sam Bankman Free.

Now, Binance, which is a very good looking bachelor, launched in 2017, became the world's biggest crypto exchange. Binance is so crypto. So crypto. The founder says there is no headquarters. We're a decentralized company. We're a deco. They're mysterious in a dreamy way.

On the other hand, we have FTX, also a very eligible bachelor's. Founded in 2019, it soared to a $30 billion valuation. The basketball arena in Miami is named after this company. Now, FTX is smaller than Binance, but still, it's one of the top five largest global crypto exchanges. And FTX is run by the politically active 30-year-old Sam Bankman-Fried, who goes by SBF. He's also known as the fro of crypto. Now, those two are the characters, but last week is when the drama started. It was leaked that Binance felt that FTX was talking crap about Binance to regulators.

Then it leaked that FTX was having money problems. So Binance saw an opportunity for revenge. To make it worse for FTX, they sold $500 million worth of FTX tokens. aka the second scene in when Harry met Sally. Sam Bankman Freed started feeling under pressure. It wasn't fun. He was angry at Shang Pang Zhao and Binance for making their crisis worse. The two hated each other and for a week they were tossing insults like Meg Ryan in a big sweater.

They were tossing insults on Twitter against each other. The whole world got to watch. But FTX was weakened. Investors were losing confidence. So FtX and Sam Bankman Fried became desperate. which led to yesterday the most awkward hookup ever. Uh-huh. Yesterday, Binance announced it is acquiring FTX.

And the way Jag and I see it, this is a hate merger. It's a hate merger. It's a hate merger. Yeah, FtX confirmed it, begrudgingly in a Twitter thread, this is a hate merger. FtX desperately needs cash. Binance stepped in with cash for an ugly marriage of convenience. And all that relationship drama caused Bitcoin to plummet 10% yesterday. The number four and the number one companies of crypto are merging.

So Jack, what's the takeaway for our buddies over in crypto? Confidence is the greatest asset in finance. Yetis, whether it's stocks or bonds or crypto, the most important asset in finance, it's really confidence. But investors who had accounts at FTX, they started losing their confidence the past couple weeks. Exactly. Rumors of financial problems led to account holders wanting to withdraw their assets. that's wanting to get out of FTX. They were nervous about FDX. They were.

And not because the CEO is a 30-year-old dude and a t-shirt with a fro. There was a run on FTC because crypto doesn't have an FDIC. Yes, the FDIC, the government program that guarantees $250,000 of savings if a bank falls apart. The FDIC is a blanket of confidence that spreads across the entire U.S. banking system and all the account holders. But crypto isn't the U.S. banking. system. Crypto doesn't have that kind of backup, so it's missing that confidence. Confidence in crypto was shaken yesterday. So the Bitcoin price fell by 10%. Confidence. It is truly the greatest asset in finance. For our second story, Sweet Green's newest product isn't a salad. It's a rice

treat. I mean, it's a crispy treat. I'm sorry. It's a crispy rice treat. I apologize. This is a classic example of the recreater economy. Oh, Jack, it's dinner time. You're craving that meatloaf, but I know you. You put that napkin in your shirt. And what is the biggest divisive food question every American faces? About salads? Yeah, let's go with salads. Are you getting kale or getting spinach? What's the base? Trick question. You're going with the spring mix with arugel. Now, what is the second biggest, most divisive question at American dinner tables? Are we doing dessert? Yeah, are we doing dessert? It's the big question. It turns out 45% of American dinner diners order dessert at the end, according to Sweet Green. If so facto, 55% don't know what they're doing.

But apparently 45% do. We're talking moose, flan, pie, cake, cupcake, tart, Sunday, more cake, all of that good stuff. Dessert is part of dinner for 45% of Americans. Well, $2 billion salad chain Sweet Green, they noticed that half of America wants dessert. And that's an opportunity because they're trying to move beyond. salad. Yeah, fast, casual, street green, they've got a problem. And what's that problem, Jack? Two-thirds of their sales happen at lunchtime. Two-thirds of their sales are like in one small part of the day. So the CEO says it's their priority to expand to dinner. Forget market share. This CEO wants to expand

meal share. But that's the problem because they make salads. They're a salad company. How do you make a salad at dinner? You need to toss a kebab on that thing? Is that a dinner? I don't know. A salad's just a salad, but a salad with dessert? Afterwards? Oh, Jack, a little more protein. I think you got yourself a dinner. I think that qualifies as a dinner, Nick. Mom, more meatloaf. So yesterday, Sweet Green announced earnings,

but Jack and I really want to focus on their latest product, which is the opposite of their core product. They launched dessert. Desert. It's a crispy rice treat. That's the name of the product. And it was designed by the chief taste officer who spent two years perfecting the recipe. This is like the Manhattan Project of sweets.

It's a lot of time. Two years, two hours is a lot for a recipe. Well, this new crispy rice treat is made of organic brown rice, quinoa, and a honey-date caramel. It's 190 calories of cubed goodness. And it sounds like a dessert that does Pilates. It does. And they did the research and development for this new dessert with a chef who was trained at the world's number one restaurant, Noma.

Yeah, hold the harvest bowl. This is the world's first dessert that's trying to win its own Michelin Star. However, this new dish. dessert sounds exactly like an old dessert. Funny thing, Jack, and I noticed, we feel like we've heard of the crispy rice treat before. The crispy rice treat. And you probably have too. The ingredients, the look, the name. Yeties, this is a modern take on the rice crispy treat. And that made us think of a takeaway. So, Jack, what's the takeaway for our buddies over at Sweet Green? Forget the creator economy. This is the recreater economy. Yeties, this new dessert from Sweet Green, it markets. It's

And that is half the battle. It markets itself because someone else already marketed this product. Someone else already built the brand for this dessert. And someone was Kellogg's. Kellogg did it in 1939. Like Americans have been enjoying rice crispy treats thanks to Kellogg's for generations. So Sweet Green could have created an entirely new dessert and that could have worked. But then Sweet Green would have the burden of educating the consumer and that doesn't work.

Instead, Sweet Green has recreated something we already. know. Exactly. It piggybacked off Kellogg. For free, Sweet Green is benefiting from the 83 years of rice crispy treat nostalgia. 83 years of someone else's brand building. Sweet Green's like, forget the creator economy. Sometimes the answer

is to recreate. It's the recreater economy. Now, a word about our sponsor, Robin Hood. A lot of Yetis don't realize how much prep work goes into this pot. We spend hours every morning jumping in T-boy style to earnings reports, CEO tweets, breaking news, heaven.

But Jack and I are toggling tabs like you toggled IM Convo's in 2004. Having eight tabs open can be stressful. You don't need that, especially when investing. Robin Hood offers it all in one app. Whether you want to trade options, ETFs, or stocks through Robin Hood Financial, or you want to buy some Bitcoin on Robin Hood Crypto. You can do it all on the Robin Hood app. If you're not investing in Robin Hood yet, to get started, go to robin hood.com

slash T-boy and choose your free stock. That's robinood.com slash T-B-O-Y. Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involve risk. By the way, this podcast is not owned or part of Robin Hood. We are not employees of Robin Hood. For our third and final story, Carvana's stock is down a get this, 98% in 14 months.

It's totaled. The stock is totaled. Carvana broke the rule of sustainable growth, which is to hire slow and fire fast. Used cars, historically like the least glorious part of American industry. Yeah, despite those car air fresheners, they're whipping out. I do love the Christmas tree-shaped freshener that says grape-scented on it, you know? Spruce. It smells just like a grin.

There is nothing like getting in the back of a taxi cab that has six of those from Mandarin-flavored all the way to black ice. But due to a shortage of new cars during the pandemic, used cars was the place to be. Carvana was the online marketplace destination for used cars. buying and selling used cars just like on Amazon. But they also had the option to deliver the car to your door, like Tesla does. Or like Disney World, they had those eight-story car vending machines in the real world so you could get your Tacoma pickup from a vending machine. They still have them.

If you just click like C-17, the robotic arm will grab your Miata and bring it down to you so you can drive it home. Back then, just a year ago, Carvana was crushing it. Revenue's jumped from $4 billion a year to $2,000. 12 billion during the pandemic. And before the pandemic, Carvana was making like $2,000 in profit on every car sold. That's not bad. During the pandemic, the profit margin jumped to $5,000 per used car sold. That's quite a markup.

Now, Yeties, that looks like a Maserati story for a stock until Carvana hit a wall. Part of the reason Carvana hit a wall is because used car prices hit a wall. Yeah, that 2014 Accura, its price is down 15%. since its peak in January. But something else happened, because Carvana stock's not down 15%. No, no, no, no. Carvana stock is down a lot more than that. And it's because Carvana didn't know how to handle success. During the pandemic, Carvana stock ballooned.

What price did it hit, Jack? $360 bucks a share. And Jack, where is Carvana stock today? Seven. Yeah, $7. The company's value has dropped 98% from $360. $60 a share to seven. Carvana looks like the NFL rookie who got the big signing bonus and splurged on like two mansions

and a yacht. But now, sadly, Carvana's broke because it didn't know how to handle the wealth and fame. So, Jack, what's the takeaway for our buddies over at Carvana? The rule of sustainable growth? Higher slow? Fire fast. You know what, Yeties? A lot like Peloton?

Carvana experienced a tripling of sales during the pandemic. And a lot like Peloton, Carvona waste. did that incredible opportunity by overindulging on hiring and marketing expenses. They were spending on sales, marketing, and administrative costs. Which is known as SGNA. Yeah, that SGNA, oh, it tripled for Carvana since 2019. Instead of slowly hiring the right people for the right jobs, Carvana was hiring really fast. And then when spiking interest rates signaled trouble for the car financing industry,

Carvana fired too slow. Carvana is finally cutting costs, but Wall Street thinks it's too little too late. Because Carvana, they broke the number one rule of sustainable growth. Higher slow, fire fast. Jack, can you whip up the takeaways for us over there? The number one and number four crypto exchanges signed a non-binding agreement to merge yesterday. Confidence, it is the greatest asset across finance. And our second story is Sweet Green.

They just launched the crispy rice tree. Forget the creator economy. This is the re-create. economy. It's pretty good. Our third and final story is Carvana. The stock is down 98% after reporting their latest huge loss. Carvana broke the number one rule of sustainable growth, higher, slow, fire fast. You showed by example there. Really tried to get into that one, Jack. That was good. That was good. Now time for the best fact yet. This one sent in by Rachel Hauer from lovely Grafton, Wisconsin. Push and play. Here we go.

The state of Arizona does not observe daylight savings time, largely due to weather. Daylight savings was enacted nationally in an attempt to conserve energy. Arizona was granted an exception in 1968 due to the extreme heat. If Arizona were to spring forward, the sun wouldn't set until 9 p.m. during the summer. Well, you know, Europe does daylight savings, but they do it like two weeks after we do. In Soviet Russia, clocks change you. Arizona doesn't get to sleep in Sunday. It's the dry heat.

Yetis, you look fantastic today. And remember, wherever you are, whoever you see, whoever you eat cake with, ask them H-Y-H-T-B-L-Y. Have you had the best one yet? That's how we grow the pod. If you know, you know. And before we go, congratulations to Yetis, Kim and Sam, on their four-year anniversary down in Los Angeles.

And happy birthday to Rotimi Williams in Lagos, Nigeria. And good luck on that master's program, Rortimi. Happy birthday to Trisha Paul in Boulder, Colorado. And a happy birthday to Nat Welch over in Beacon, New York. Happy 25th to Caleb Byer in Des Moines, Iowa. And Jack, we got a 40th birthday for Jason Delos Reyes in Falls Church, Virginia. And Emily Rose, happy 27th down in Columbia, South Carolina. Six-year anniversary of her 21st birthday.

And to anyone else, celebrate something today, make it a T-Bowice. Celebrate the wins. This is Jack. I own stock of Amazon and Disney. Nick own stock of Beyond Me, and we both own stock of Pelton and Robin Hood. we both own some Bitcoin. Now, a word about our sponsor, Robin Hood. A lot of you listen to our show while you're driving. Two hands on the wheel.

Keep it 10 and 2. You might be cruising, Chris, no rush. Stay in the right lane. Or you might be doll lane from Duncan, dotting from lane to lane. And there are different drivers on the road. They're different investors too. Maybe you're cruising down the long-term lane with stock investing, or maybe you're a more advanced full-speed trader.

Well, the Robin Hood app helps put you in the driver seat wherever you're at in your investing journey. not investing on Robin Hood yet. To get started, go to robinood.com slash teboy and choose your free stock. That's Robinhood.com slash T-B-O-Y. Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involve risk. By the way, this podcast is not owned by or part of Robin Hood, and we are not employees of Robinhood. Dude, it's really cold here, and for some reason, cold weather makes me feel like I should drink during the pod. Sounds like we should have a discussion, Jack. It's the beginning of winter.

I hate to break it to you, but it's only getting colder. This is Nick. This is Nick. Why don't you look at me when we podcast together?