The Best One Yet - ⚾ “Bodyslam Baseball Cards” — Fanatics’ wrestling move. Elizabeth’s Theranos prison. Toyota’s muda mojo.

Episode Date: January 5, 2022

Fanatics stole Topps’ baseball card deal with Major League Baseball… and now it’s using a pro wrestling move to buy Topps. The Elizabeth Holmes trial is finally over — she’s the rare corporate wrong-doer actually heading to jail. And one of the greatest streaks in American history just ended: Toyota stole GM’s 70-yr crown because it’s obsessed with crushing “muda.” $NKE $TM $GM $FGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

Oh, by the way, are those jeans you're wearing? You thought these were jeans? That's what I want people to think. They're not jeans. They're khaki, but you think they're jeans. Look at this. Look this. They look like jeans, right?

No one's good, no. They look really nice. Here we go. Three, two. This is Nick. This is Jack. And this is Snacks Daily. It is Wednesday, almost Thursday, January 5th.

This part. Yeah, Jack, what do you think? It's the best one, yeah. This is it. This is it. This is it. This is it. the best one yet. First story. Fanatics was worth $18 billion for sports jerseys, hats, and fan

gear. Wow. But now it wants trading cards too. Fanatics, they're using wrestling moves to make trading cards happen. For our second story, the biggest corporate fraud trial since Enron has reached a verdict. Elizabeth Holmes is guilty and is probably going to jail. For our third and final story, Toyota is now America's biggest carmaker. Shocker. Ending Detroit's 90 years. Nine decades, Snackers. It all comes down to one word. But before we hit those stories, Moda.

You know what pairs well with the Big Mac? Oh, Jack, how about a 30-minute bike ride while you're chewing that Big Mac? Snackers, wild story over in China. McDonald's in China is testing a new thing. We're talking an exercise bike that is the seat at McDonald's. You pedal while you're eating your Big Mac. When we were predicting like the robot restaurants and our predictions pods,

Jack, I don't think we were in. visioning this. Here's how it's going to look. You roll up to a McDonald's. Why not? And you grab your happy meal. Lovely. But instead of sitting at a chair with the table top, I'm following you. The chair is an exercise bike with pedals built into it. So like you're eating your 20 piece McNuggets while you're burning 20 calorie cycling. They encourage you to work out while you're eating. This is happening at the same time. If so facto, this is simultaneous workout and eating. Because calories don't count if they disappear while you're intake. Yes, that's Newton's fifth law of physics. You nailed it, you now, this is like Soul Cycle for your stomach.

It is. It is like if you ordered a Happy Meal button, instead of a toy, you got a Pelot. And it's not just about healthiness. No, they kick things up like three notches over at China McDonald's. When you're peddling, that's energy. And the pedals generate electricity. Seriously, that's like the sixth law of physics. There's an iPhone cord that comes out of the bike and you can charge your phone while

you're pedaling while you're eating. So you're pedaling generates the electricity. So you fill your belly with a McFlur. you burn the McFlare. You arrive with the empty battery, and then you fill your battery. Ronald McDonald, not just mascot. No. Spin instructor.

Yeah, nothing motivates more than a clown yelling at you. Pedal harder. Let's get a couple of these in the U.S. please. Why not? And then, Jack, let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. It's snacks about to hear rain food.

It's air candy. They don't reflect the views of the robberhood family. It's all informational just so. You know. 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, Fanatics, we're talking to a $29 billion sports apparel company. They are buying tops trading cards out of nowhere. Because to win a deal. Yeah, you got to give them equity. Jack, if you are wearing a. flat brim socks hat, a maple leaf sweater.

The New York Rangers beanie for your little cockapum. You probably got it at Fanatis. What about the pinstrips? You got to go with the pinstrives. How about our buddy Timmy? He's like wardrobe is sponsored by Fanis. Timmy has so many New York Giants jerseys. If you're born in Westchester, you're born with both a home and away Giants jersey.

Our buddy Timmy is the best Giants fan of the record. Fanatics, though, is the sports apparel startup of startups. Fanatics took on Nike, Adidas, and Reeboks in the sports jersey apparel game. We're talking the Derek Jeter number two. Megan Rapino number 15. The Russell Westbrook number zero. They're all manufactured by Fanatics. They are.

Also, Jack, I'm looking at this right now. The Fanatics founder, get this. He used his bar mitzvah money as seed capital for his first startup. Michael Rubin. Do you know what that first startup was? Talk to me. What is it? He was buying and then reselling skis.

Yeah. So he's a go-getter. But Fanatics isn't a tech company. They're not a ski company. No. But Fanatics throws up numbers like a tech company. It's worth $29 billion. With a beat.

Because back in the 90s, Fanatics focused on e-commerce, way before Nike and Adidas were even thinking about. And now Fanatics is the official partner of like just about every single major sports league for fan merchandise. And it's worth $29 billion, but it's a sumo. It is. Yeah. We're straight up missing out.

S-U-M-O. But this week, Fanatics pulled a move straight out of the squared circle. Yeah. This is a classic wrestling move that Fanatics did on a rival. In August, Fanatics out of the game. of nowhere launched a trading card division. Yeah, like forget the Derek Jeter jersey. They started doing Derek Jeter three inch baseball cards.

Only one issue there. Yes, Jack. They had no idea how to make trading cards. Because fanatics, they deal with cotton, not cardboard. They had no printing press. They don't know how to put holograms on those things. What are they doing over there? They don't know what they're doing.

But they didn't care. They outbid tops, the baseball card icon. Classic. That made Mickey Mantle cards back in the 50s and won the exclusive deal with Major League Baseball to make cards. But Snackers, for the last 70 years, Major League Baseball has had a deal with Tops since you're like great granddaddy to make baseball cards. Tops got dumped for Fanatics. So Tops was devastated. Baseball cards is what Tops does. Tops's passion in life is baseball cards. So Tops had to cancel their SPAC that was planned to go public at $1.3 billion.

And here's where things get freaky, Snackers. Yesterday, Fanatics and Netflix. they are buying tops for a fraction of what it used to be worth before it got dumped by Major League Baseball. So what we're saying is that Fanatics crushed Topps valuation by snagging their baseball card deal. That's not corporate finance. And then Fanatics acquired Top. That is a wrestling move off the top turnbuckle. So Jack, what is the takeaway for our buddies over at Fanatics? If you give equity, you are teammates in growth. Snackers, why did Major League? baseball breakup with tops after 70 years of being baseball card buddies? Because the MLB is a part owner of fanatics. Yeah, unlike Nike and Adidas, Fanatics offered sports leagues equity in their

startup years earlier. And that's a big reason why the leagues partnered with Fanatics. They wanted to partner with the company that they are part owner of too. Jack, looking at the cap table here, you know who else is an investor in Fanatics? The NFL. Yep. And all of the NFL players, since the NFL Players Association is a part owner of Fanatic. This strategy of sharing equity with partners is what's propelled Fanatics to a $29 billion valuation. And it's also how Fanatics launched a business that was nothing. Didn't exist. Six months ago.

Cards didn't do that. And now the trading card division alone at Fanatics is worth a reported $10.4 billion. Fanatics, they gave powerful partners equity. Because now they're teammates in growth. For our second story, the tech trial of the decade, Elizabeth Holmes of Theranos has been found guilty. Fake it till you make it. Yeah. Can put you in jail.

Also, the last time we're probably ever going to talk about Theranos now. Unless we say this is the biggest corporate trial since Theranos. There we go. That's true. Or she teams up with Adam Newman and they launched like a real estate pharmacone. Theranos founder Elizabeth Holmes. Yes. Not just a popular Silicon Valley Halloween costume.

Oh my God. 2020, you know, you had the turtleneck. You had the red lipstick, maybe a little vial of blood in your left hand. But the key is that gaze. Yes. That focused gaze into your friend's soul. Yeah, that. And then maybe you would like mimic Steve Jobs' voice by going a couple octaves lower.

Elizabeth Holmes dropped out of Stanford and famously launched Theranos. $9 billion of Theranos. It was a startup that everyone loved because it could do blood tests with a tiny prick of blood, except it couldn't. And the 15-week trial of alleged fraud is over. And most of the trial was prosecutor showing evidence of founder Elizabeth Holmes, fraud. So where did they go to show that fraud, Jack? Pitch decks.

The classics. The pitch decks that every startup has to whip up and show investors. She used these pitch decks to persuade super wealthy individuals to invest in tariffs. And these pitch decks were the key to the case because slide number three and slide number six and slide number eight were misleading. For instance, Holmes doctored some documents to make Pfizer's logo, suggest that Pfizer approved the science of Theranos, which they didn't. Look, Canva is a fantastic tool, but you just can't do that in a PowerPoint. And tricking investors into thinking Pfizer endorses your product. That's not just misleading.

No, it's not. That is criminal fraud. Now, that is what the prosecutors alleged. But the defense, they portrayed Elizabeth Holmes over the last 15 weeks as a victim of abuse herself. They also portrayed her as an entrepreneur whose startup unfortunately failed. Yeah, they were like, hey, look, failure happened. It's not a crime. Leave Liz alone. But the jury didn't buy it. They convicted Elizabeth Holmes on four of the 11 charges brought against her.

Now, for each conviction, Elizabeth Holmes faces up to 20 years of jail time. Oh, and she may have to pay $3 million. She's going to appeal, though, and experts think she won't spend 20 years in jail, but she'll spend some. So, Jack, what's the takeaway for everyone who was watching this legendary trial? This is rare, a corporate wrongdoer actually going to jail. Snackers, there is a history. of corporate crime that is filled with empty jail cells. That's because of the unique nature of

white collar crime. Yeah, Jack, for example, the U.S. financial crisis, it caused billions of dollars in damages and completely destroyed lives. But no financial executives ended up in jail. Jack, you got America's opioid crisis that's resulted in over a million dead and addicted.

But the Sackler family, which invented and pushed OxyContin across America, has avoided criminal charges. But now you got Elizabeth Holmes' victims who were a way smaller group. We're talking like just extremely wealthy investors. Yeah. And the damages, the victims, yeah. It was a billion dollars worth of investment that got destroyed. But that pales in comparison to the damages of the Great Recession and the opioid to crisis. So here's what we think this case really reveals. It's easier to convict when the

victims and damages are very clear and very calculable. It's a whole lot harder to convict when the damage is big and broad spread across millions of people. Which white collar crime often is. For our third and final story, Toyota, they just ended one of the greatest streaks we had ever even heard of in American business history. You don't get great streaks outside of sports. You really don't. No, no, you really don't. Like, you got Joe DiMaggio's hitting streak. You do, you do, you do. You got Lou Gehrig's games played streak. You got the Ugon Huskies, women's basketball. They won 111 straight games over three seasons. We were honestly, we were trying to look at it. I found like a Beyonce Graham.

semi-streak, but then that was proved wrong at one point. I don't know. But this is a streak outside of the arena, and it is one of the great streaks of business history. 1931, General Motors passed forward as the top car seller in the United States, and they held on to that record for how many years, Jack? 90. 90. Because Nana buys the Buick.

Uncle Buck buys the Cadillac, and you get the Chevy Silverada. This is all the GM family. Until yesterday. The 90-year streak is over because Toyota just announced they were the top-selling car. company in America in 2021. They knocked out GM's crown. It's the first time ever that a foreign car company has sold the most cars

in the United States. It's like the plot of every season at Game of Thrones. Toyota stock jumped 7% on this news to an all-time high. Okay, so Toyota is now worth $320 billion, which is like 20 lifts. And it's more than Ford and GM combined. In fact, since the 80s, Toyota has

consistently been the most profitable car company in the world and the most valuable. Until Tesla just because Tesla is Tesla. Now, here's the best part of the story. Toyota, unbelievable accomplishment. They're not bragging. In fact, they're embarrassed.

Honestly, Toyota Jack, Toyota is embarrassed that they took the top crown in the U.S. Here's what Toyota's U.S. chief told CNBC about this mile. He said, you know what? Quote unquote, this wasn't our goal. He said, don't expect this from us. He said it's literally not sustainable for them to be the best in America.

Last year, GM sales fell while Toyota's rose. Toyota's 2.3 million vehicles sold last year. that was 114,000 more than General Motorsault. Toyota doesn't want to brag, even though they kind of deserve to brag. Yeah, because General Motors and Ford didn't have computer chips last year. So they had to shut down some factories during crucial times. But Toyota had enough computers ships last year. They weren't sharing them.

Yeah. But they had enough. So, Jack, what is the takeaway for our buddies over at Toyota and our favorite word? Their success all comes down to our favorite Japanese word, muda. Moota. Muda, muda, moota. Japanese term for wasteful. And Toyota, they hate Muda. According to Toyota's corporate website, Muda, they define as any process that doesn't add value.

And Snackers, there are seven types of Muda in this world that are not adding value. And unless you find and destroy all seven types of Muda, you repeat, destroy the Muda. Then that waste is going to erode Toyota's processes and eventually their profits. So destroying Muda, that requires obsession with operational efficiency. how Toyota became the most valuable car company. Until Tesla. Right. True.

Toyota's U.S. sales, they grew while General Motors shrank because Toyota was able to source chips. Cushing Muda. I heard about it first at business school. We loved crushing Muda. But it's how Toyota was able to find those chips so quickly. It's a manufacturing religion and a life philosophy. And just helped Japanese Toyota make American history.

Jack, can you whip up the takeaways for us over there? Fanatics outbid tops? Now it's acquiring types. Yeah, it gave equity to have teammates in growth. Theranos's Elizabeth Holmes has been convicted guilty. Yeah, we got the rare corporate wrongdoer going to jail. Toyota broke GM's 90-year street. Because Toyota has a history of crushing Muda.

Which helped it avoid Muda even when there was a chip shop. Because we all hate Muda. Muda is the worst. Time for our snack fact of the day. This one tweeted in by Nathan Cormier over and lovely. Indianapolis, Indiana. Middle names didn't exist before 1835. Before that, it was just like a fad in ancient Rome to sound fancy that like slowly died over time. But in 1835, it was introduced in a university textbook, according to Nathan. Get this, Snackers, only three of the first 17 American

presidents even had a mental name. Way back in 1911, just one of every three American children were even given a middle name. But in the last century, the middle name has like roared back to become a thing. Now, Dumbledore has three middle names. This is like a snack fact, but then a snack fact. My buddy Doug Grinzike, he's got older siblings with middle names, but when he was born as a triplet, his parents are like, I'm not coming up with six names. And isn't your first name actually your middle name? No. But my first name is technically John. That's what I was gone for. And sometimes I call myself John Jack Craig. Gave yourself two middle names. All right, there we go. Must be nice. Snackers, you look fantastic

today. If you haven't yet, turn to the person next to you when you're getting lunch and say, hey, HY, HYS day. Have you had your snacks daily? If you know, you know. We'll see you tomorrow. That's how we grow. And before we go, a thanks to Vinnie and Angie Sabatino in South Florida for all their Naples recommendations. Thanks for the restaurant. And happy one year work anniversary at Google to Dolly Wang in Shanghai. And Robert and Brianna Radcliffe, happy nine year anniversary down in Boyd in Iowa. Happy 21st to Karina Gonzalez. in Orlando, Florida. And Raj V.

Mata, happy birthday over in Siam. And anybody else celebrating today, make it a T-boy. Celebrate the wins. This is Jack. Nick and I both own stock and Peloton. Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors who are associated persons of Robin Hood Financial LLC and do not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates.

They are meant for informational purposes only and are not a recommendation to buy or sell any security, cryptocurrency, or investment strategy in any account. This is not an offer or sale of a security, not a research report, and is not intended to serve on the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robin Hood Markets, Inc., Robin Hood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk, including loss of principle and past performance, does not guarantee future results.

Robin Hood Financial LLC, member FINRA, SIPC. That was great. You hear my turnbuckle line? That was really good. Dude, that was a perfect verbology. I also threw in the squared circle. That's an if you know, you know.