The Best One Yet - Blue Apron’s reverse split, Domino’s self-driving minivan delivery, and Buzzfeed/VW union drama

Episode Date: June 18, 2019

Tech-focused Domino’s is unleashing a self-driving delivery minivan later this year. Meal kit pioneer Blue Apron’s shares jumped from 55-cents to over $8 because of a reverse stock split (we’ll break it down). And while Buzzfeed employees are pushing to unionize, VW’s shockingly just voted against the idea.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. This is snacks. Daily is Tuesday. June 18th. This is the best one. Yeah. This is a T-boy. Jack just punched something. Markets rose on excitement for Facebook's announcement, which is happening today. It didn't happen yesterday about cryptocurrency. A lot of enthusiasm. This is a Zuck coin coming out. We will cover that in tomorrow's hot. Spoiler alert. Today, we're going to cover three great stories. We got a good mix in here. The first, Blue Apron stock was under $1 per share on Friday, and yesterday they were over $8. We're going to order the salmon. Contrae and look into this magical reverse stock split side. We'll give a hint. That sounds like good news. It's not good news.

Nope. Second story is Domino's. It's testing a self-driving minivan in Texas. This thing is adorable, and it reiterates our point that Domino's is basically a tech company. Third and final story is our Econish story of the day. Just a little bit of ish in there. It was a big day for unions yesterday, both good and bad. We're talking BuzzFeed and Volkswagen.

We're going to break down the two stories. Before we jump into all that, we got to talk about our friend Aaron Rogers. The Green Bay Packers quarterback, Super Bowl champion, big snacks listener. He just launched a $50 million venture capital fund called RX3. We don't know what it stands for, but we like that it's kind of technical and has an X in it. Aaron tells us he's constantly approached by fans for investment ideas. Shocker. Hey, Aaron, look up here.

Aaron, business plan on the board. The fund has already invested in Hymns, which has an erectile dysfunction thing. And they've invested in core power yoga, which is a core power yoga chain. Now, Jack, you want to make your pitch? Yeah, I got a good pitch. So Aaron has invested in a helmet. a specialized helmet to reduce concussions. I got a better way.

Talk to us. Slow the players down. Yeah. Players are moving so fast. They are so huge. When they collide, damage is bound to have. Jack's picturing, what do you picturing? Like a field here with sand on it?

Well, think about playing catch on a beach. You run a little slower, right? Because there's a little give. We need to make that kind of give happen on a football field. Jack, big question. Can it scale? I don't know, but we need to just let that grass grow fewer concussions. We'll let Aaron make the call on that one.

In the meantime, listen to these. these key words. You're tuned in the snacks daily. We spoke to the lawyers. It's snacks about to hear, 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. 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. Robohood Financial, LLC, member FINRA slash SIPC.

For our first story, Domino's just in bailed a pizza delivery. covering self-driving mini-van and it's happening this year a mini mini mini man where it's kind of freaky look how do you describe this thing it's uh it's like a giant cooler yeah on four wheels that's doing a little too much it's actually a little bigger it's like a coffin on wheels that's that's size wise ironic because there's no humans in it this thing actually is kind of adorable let's get into the story so domino's loves technology we've covered it on snacks a bunch of times but this is tech to a whole new right they're testing this thing out in yustin first and it's going to happen in the third quarter of this year so you should

Google this. We'll actually tweet out a picture of this thing. Let's make it happen. It is a fully autonomous minivan called an R1. Now, California-based Neuro. Now, this is happening originally in Scottsdale, Arizona, which is like the Michigan of the 22nd century. The 22nd century.

You see what we did that. There is a whole bunch of self-driving car technology being experimented in Arizona. Right, because they've got the laws that are really encouraging it right now. Very loose experimentation. Like, come on, come try out your business. Just test it out to your thing down here. Now, Neuro itself, is pretty interesting because it's co-founded by a couple engineers who used to be with Waymo.

Right. Which is Google's self-driving car company. Now, here's how this thing is going down. It's a purpose-built vehicle, which is a very particular type of self-driving car. It's 8.5 feet long. There is no space in that thing for a human being. It wasn't even created with the idea of a human ever setting foot in this thing. There's no steering wheel. No brake pedals. There's got to be brakes. There's breaks on this thing. It's just enough storage for a bunch of pizzas and, like, some chicken wings, and maybe a cell. So that's one key. The other key that we thought was fascinating was where this thing is going to be. It's not going to be on a sidewalk. Right. Postmates and Amazon have tested out their own delivery fleet that goes on sidewalks around college campuses and stuff.

You should Google Postmates's thing. It's called serve. It's adorable. It's also cute. But this thing drives on roads, which is a differentiator. Also, it only can go 25 miles per hour. Right. So it's slowing things down around it. Yeah, cars are going to have to follow it at actually drive 25 Now, let's say you're one of our great snackers down in Houston and you're really hungry for pizza and you don't interact with human beings. This is how this is going down. You're going to go to your Domino's app. And you're going to notice. There's one store that's doing this.

And you're going to select the boop-boop-boop-robot delivery option. That's pretty exciting. Boop-boop, not included. So then I'm guessing on the app you'll be able to track the little vehicle coming to your front door. It's going to get up there and when it arrives, it's going to hit you with a unique pincode. Right. And that pincode, you walk out, you type it in. The thing opens up, voila.

Pizza. So, Jack, what's the takeaway for our buddies over at Domino's? Human beings are really expensive. We counted up Snacks Daily Style and noticed four Domino's partnerships aimed to cut out drivers. Okay, first, in New Zealand, there's a partnership delivering pizzas by aerial drones. Then they had one with Ford that was testing out of Michigan with self-driving cars, too. Right. That one just ended.

But Domino's is trying really hard to cut out the human being from its delivery equation. Just doing a little simple back the envelope math here, salary plus benefits, humans are expensive. Yeah, I mean, think about it. It costs, like, the popular minimum wage that's passing in states and cities is $15 an hour. Add on 30% for, like, health care and other benefits, you're talking $20 an hour. Let's say it takes a half hour to deliver a pizza. Buy a single person. That means the delivery human delivery boy cost alone for a pizza is $10.

That's a lot of money. This is exactly why Uber and Lyft are trying to cut out drivers in order to even become profitable. Development in the self-driving car cut out the delivery boy technology is going to continue. For a second story, Blue Apron just pulled off a reverse stock split. Yeah, every single share of Blue Apron just got 15 times bigger. I feel like I'm emceeing a gymnastics tournament over here. How did they land that thing? Nick, do you realize this story is exactly Tom Hanks in the movie Big?

This is the plot of Big. All right. Go to sleep one day, wake up, you're huge. We're talking about Blue Apron's reverse stock split. This thing is like, you know, technically, if you like drew abs on your stomach and they were like, hey, what do you think of the six back? Yeah, it's when you make some. you make something look better, but you don't change the underlying badness of the situation. Right. We've seen a situation like this before. For example, Apple shares got so big, so expensive

once upon a time. Yeah, this was a few years ago. Yeah, they were like over $600 a single share. It was, it was just getting awkward how expensive Apple shares had become. You're right. I can barely afford the iPhone. I can barely afford a share of Apple. So Apple decided, you know what, we're going to take these very expensive shares, split them into seven different tinier shares for like 90 bucks each, and that'll be good. And that was good news. Right. That was a stock split. That was a problem you want to have.

Exactly. A stock split. Blue Apron has the opposite problem. And it did a reverse stock split to fix it. This is called a reverse stock split, a.k.a. like a consolidation. Right. Instead of its shares getting so high and expensive like apples,

its shares were so low and cheap. It literally might have been delisted from a stock exchange. I mean, when the stock gets below $1 share, it's just a visually upsetting thing to look at. You need that number to the left. the period. So on Friday, blue apron shares were 55 cents each. On Monday, they were $8 each. We like woke up and a whole new blue apron situation. The company took 15 shares and turned them into one share. Now, of course, the catch here is at the underlying value of the company hasn't changed.

No, no. They just have 15 times fewer shares now that are 15 times as expensive. It's like instead of selling single blue aprons, they're selling 15 packs. Now, even though that helps alleviate the situation of the stock being too cheap, investors know it's not a great signal about how the company's doing. When this got announced last week, the stock fell 16% because it was a wake-up call of how bad things have become. Now, in total fairness here to Blue Apron, the meal kit pioneer, they did reference that this could happen way back when before they IPO. All of the struggles they're facing, it was outlined in the company's S-1. That is their critical pre-IPO paperwork. Every company that's doing an IPO issues an S-1, and an important part of it is the

Risks section. And Blue Apron happened to outline three key risks that we're kind of seeing play out right now. Risk number one, we have a history of losses and we may be unable to achieve profitability. Yeah, apparently that one came true because they're still not profitable and they've had to spend a lot of money on building out new facilities. Risk number two, if we fail to retain our existing customers or gain new ones, the business could become materially adversely affected. Well, their meal kit churn rate is extremely high because he got a lot of users who heard a podcast promo code, $50 off your first meal. They got a meal, and then they stopped meal kidding. Right. Third risk, if we fail to manage growth, we will be materially adversely affected.

Rough timing. Two years ago, when they IPOed, Amazon came out with a meal kit too. And now everyone, their cousin, their aunts, launches a meal kit. By the way, may I suggest an edit to Blue Apron instead of materially adversely affected? Just say, bad. That'd be great. Call the legal team. So, Jack, what's the takeaway for our buddies over at Blue Apron? This is why the S-1 should be required reading. All of the... of these risks are elaborated upon within the S-1, that pre-IPO document. If you're thinking about investing in a stock that just IPOed, you got to check it out. Look, it's 200 pages long.

Not like Friday night reading. But think of it like a magazine. Skim through it. Check out the sections that relate to you. And look at the key parts about risk. Yeah. And then with each like risk, ask yourself, do I think this will happen or do I think the company is actually good to go?

Because they're drawing upon a wide spectrum of possibilities here. The S-1 should be required reading. For our third and final story, this one's big. We got two big union news. Buy one, get one free. Start with Volkswagen. VW workers just said no to union. And then BuzzFeeds go in kind of hardcore on unions.

Yeah, so we'll start in New York City. Take me there. Got my MetroCard. BuzzFeed workers just went on strike. It's trying to form one of the biggest labor unions in digital media. And this wasn't just any strike. This was four offices of BuzzFeed. 2 p.m. Eastern Time workers just walked out.

They're basically like, look, I got like a couple hundred of my BuzzFeed buddies. and the top people in BuzzFeed aren't recognizing me as a union. Now, this isn't totally a surprise because in the last year, 12,000 individuals in media have been laid off, fired from media companies. And when people are getting laid off, they want to protect themselves, and unionization is one way to ban together. Exactly. There's an interesting correlation there.

So the more job insecurity there is, the more push there is to join a union, and we're seeing that in the data. There's been 30 news media websites that have unionized in just the past two years. Okay. So that's BuzzFeed up. north and New York. Let's go down south. Talk to me. Chattanooga, Tennessee, where Volkswagen has its one American factory. Workers just voted again not to union us. Right. They're basically saying we are happy not to be recognized as a union right now. The vote was 833 against 776 four. So this is the second

time that this particular plan has voted to not join a union where the majority of workers have said, we don't want to create a Volkswagen union. Right. And VW management is like, are you sure? We just gave you a second try. We vote on this or what's going on here? So let's talk VW. This is the auto industry, which is famous for unionization. Right. And the core reason of why you should unionize, collective bargaining. Collective bargaining is a technical term. It basically means we're stronger together. Right. You're not going to go into your boss office and say, hey, I need to raise ASAP. Well, you could, but it'd be hard. Right. You get the whole team together, the whole office, and you're all pushing for raise. And then you can demand a raise. And it's a lot easier. That's the key value prop of unionizing.

Now, the reasons why you shouldn't unionize, and this is what the VW workers were concerned about, it was about being labeled anti-business. Right. They basically said VW management is treating us fine. I like my pay. I'm living a decent life. I don't want to mess with management. Don't want to rock the boat.

Unizing. Exactly. They're worried they'll be labeled as anti-biz. So, Jack, what's the takeaway for our buddies pushing unions and taking away unions, VW and BuzzFee? Unions have been taking a beating in the U.S. Except in the media industry. True. So the U.S. is the only VW plant that is not.

not unionized. All other VW plants in the world have unions. Now, even more interestingly, in Germany, unions have a power in which they get a seat on a board. They get like the biggest piece of chicken, not even the case in the United States. Right. And so there's actually a North-South Republican Democrat historic divide in being against unions or four. Right. It gets pretty political here because you've got like pro-business anti-union. That's the case for most Republicans. Right. And Democrats tend to be pro-worker and pro-union. So the VW News is a continuation of a trend of declining unions in America. And a big exception is media, an industry that's struggling.

Jack, can you whip up the takeaways for us over there? Domino's continues its quest to eliminate delivery boys with self-driving hotbys. Just put in the pin and get your pie already. Second story, Blue Aprons, reverse stock split is a bad sign, but it warned us this could all happen. The S-1 is your best friend. Sidel down with this thing. Third and final story, VW and BuzzFeed.

VW's Novo is another bad sign for unions. Fascinating union news. I'm glad we could jump into that one. Jack, time for our snack fact today. This one sent in by Yao Li from wonderful Calgary, Alberta, Canada. Calgary, Home with the Flames. Still a little bit snow up there from what I understand. Yao, big snacker.

Nick, you ever heard of Andrew Warholah? No unfamiliar with the term. No? Andrew. Andy, perhaps? Andy Warhol. Have I seen his work? Andy Warhol's work you have seen.

A famous Campbell Soup artist. He actually used to be Andrew Warholah. And he dropped the A in his name because he noticed it started selling more of his painting. Now, Yao was curious about this because she went to a museum exhibit, she told us, and noticed it. And she looked up a few other celebrities who have made some minor changes. She noticed a bit of a trend. Jennifer Aniston? She lied to us.

Jennifer Anastasicus. Wish I had known that. Elton John. Reginald Dwight, apparently. And then Jamie Fox just decided to start from scratch with what his mom gave him. Eric Marlon Bishop is his real name. Also, John Wayne, the tough guy Western actor. his real name is Marion Morrison, which I kind of think is a cooler name.

Yeah, it's not really a Western thing. Now, a couple of other great stories we're covering in our Snacks newsletter. You've got to look out for it. First, Pfizer just acquired a cancer drug company for $10 billion. And then Facebook is unveiling key details about its new Stablecoin. Stablecoin, which is, we're going to call Zuckcoin. Zuckcoin. Let's go about that. Check out tomorrow's pod and we will cover Zuck.

Can't wait. The Robin Hood Snacks podcast you just heard reflects the opinions of only the host. 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 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.