The Best One Yet - “Canada Goose + Yeti + Resto Hardware" — The Goose’s strategic uniform. Snapchat’s augmented everything. 23andMe’s DNA SPAC.

Episode Date: February 8, 2021

Canada Goose shares surged because it had been forgotten by Wall Street. Snapchat collects less data on you than every other social media… because it’s betting on AR to make more money. And 23andMe is using a Hollywood SPAC to take DNA public.$GOOS $SNAP $VGACGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkSend us your Black History Month SnackFact here:https://docs.google.com/forms/d/1Hu00HOlQ-qb6S7Jx4CgnGOfzrA67_j_SLFqxvFKinEQ/editWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkLearn 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. Welcome back. It is Monday, February 8th. This is the best one yet, and we got three fantastic stories. Jack, what's our first story? What do we got today?

Canada Goose stock jumped 31% last week. Jack, I got four words for you, premium, pandemic, winter uniform. For our second story, on average, someone who uses Snapchat opens the app 30 times per day last quarter. 30 times, despite that absurd stat, Snapchat has never taken. turned a single profit, we're going to explain why. For our third and final story, billionaire Richard Branson, is taking 23 and me public via a spacquisition. Surprise, you're part Lithuanian and your spit saves lives. Snackers, before we get those three stories, there's an unprecedented moment we have to talk about here on Snacks Daily. Jack, we've got ourselves our first ever

pre-zucking, the first pre-zucking. Snackers, we're all fluent on the term zucking by this point. Yes, we are. Definition, zucking. When Facebook copies another company's product or feature. And of course, who could forget the stage five zuckings we've reported on? Jack, those are the worst when Facebook egregiously copies another company's product or feature. But last week, something unprecedented happened. The pre-zucking, a zucking before the crime is committed. Jack, this is like Tom Cruise and Minority Report. You dig up the past, all you get is dirty. The first ever pre-zucking, we could all see. Actually, not all of us could see it, but some of you saw it on Thursday night. And you couldn't even see it. You had to hear it because Mark Zuckerberg joined the new

viral rival audio app, Clubhouse, just to spend some time talking on Clubhouse. So we see Mark Zuckerberg hanging out in Clubhouse. So facto, get ready for a Clubhouse feature to be added to Instagram sometime soon. For Mark, Thursday's Clubhouse chat, it was kind of like, what would you say, Jack, a business recon trip. That's what that was. Hey, everybody, Mark here, how you doing? Question for the group, how likely are you to recommend this app on a scale of one to ten?

Still, Mark, wouldn't it be great at this feature we're in the apps you already use. One more quick thing for Mark, strongly agree. Agreed, neutral, disagree or strongly disagree, please. Reminder snackers, if you see Zucking, say Zuckin. Let's hit her three stories. You're tuned in the snacks daily. Yeah, babe. Spook 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 robber hood 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. Right.

Snacks is digestible. This news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Canada Goose just had its biggest day since 2018, Jack. Finally, Wall Street remembers that the Goose is part of the premium pandemic winter uniform. Canada Goose, only jacket to unofficially officially sponsor the Upper East Side. A Canada Goose jacket is perfect for braving Arctic temperatures while walking your poodle. Yeah, it is.

Even though, like, last quarter, by the way, one out of every four, four of Canada Goose stores was closed, they got a nice 5% jump in revenues to $370 million. And that led to a 31% stock pop last week for the Goose. Now, this is big. This is important because, get this, half of Canada Goose's annual sales happened in the last three months. It's basically a Christmas gift company. It is. They need to work on their summer game. But this got Jack and I focused on something different. You don't just want to find a trend snackers. You want to put together the whole uniform of that trend. The first garment of this trend is pandemic winter trends of outdoor dining, outdoor socializing,

and doing outdoor things because they're more COVID-friendly. But then there's this like whole other pandemic winter trend you got. You got affluent Americans having plenty of money, thanks to the stock market and the real estate book. You can kind of start to put together an outfit for the person that's partaking in both of these trends. This is a publicly traded premium pandemic winter uniform. This person is holding a Yeti mug. Yeah, an expensive mug for a know, that sub-zero hot chocolate, you've got to keep hot. I mean, that's what you got to do. This person is sitting by a fire atop a restoration hardware outdoor bench. Yeah, a little bit more expensive patio setup on which to sit with the aforementioned Yeti mug, Jack.

The last piece of the premium pandemic winter uniform is the Canada Goose jacket. And even most expensive parka for the body that is holding the Yeti mug sitting upon that restoration hardware bench. So, Jack, what's the takeaway for our buddies over Canada Goose? It looks like one stock had been left behind. Snackers, if the same trend is benefiting like a whole bunch of companies, someone may have been left out. Like Kevin McAllister in every movie, Wall Street can forget somebody. Yeah, it happens.

And thanks to like the whole treat yourself winter uniform splurging we've been seeing, both restoration hardware stock and Yeti's stocks have been up about 50% since the end of September. But before last week, Canada Goose stock had barely budged over the same period. Yeah. Jack and I noticed that we were surprised. If other stocks in this pandemic uniform are rising, why didn't the goose rise? Well, last week, after the earnings report, Canada Goose stock finally caught up to Yeti and restoration hardware. Yep, it's searched 31%. That earnings report

was the equivalent of Kevin finally getting his mom on the phone. Kevin! Of course, there are other variables that go into an investment thesis. Yeah, for example, like maybe like investors thought Canada Goose would have supply issues, so they didn't. by the stock, but they thought like Yeti wouldn't have that issue. But based on just the consumer behavior of this particular pandemic winter, it looks like investors had forgotten about Canada Goose. Jack, ducks fly together, but Canada Goose stock got left behind. For our second story, Facebook is 10 times better at making money than Snapchat is. What Snapchat lacks in data, it must make up for with augmented reality. Okay, we're going to sprinkle a little context here.

All of the big tech companies, they keep having to go to D.C. and testify in front of Congress. Snapchat somehow has stayed above the fray over in Santa Monica, but they've still never made a profit on any single quarter ever. Okay, wild fact that Jack and I whipped up. Since going public in 2015, Snapchat has lost a cumulative $7.6 billion with a B. Half a lift. Unfortunately, the streak did not end. Despite revenue growing 62% last quarter, Snap lost money again. Okay, so Snackers, here's how it breaks down. Like Facebook, Snapchat offers like a combo of picks, a videos and messages, but Facebook is able to squeeze out a whole bunch more money on that. We calculated that in the U.S. and Canada last quarter,

Facebook made $69 in ad revenue per user. Jack, Snapchat, $7. That's it, $7.00. Facebook's making like a premium-aged rib-eye steak with Merlot, Snapchat whips up like a happy meal. Nick and I found three factors to explain why Facebook makes 10 times more money per user. than Snapchat. Okay, the first tier is targeting of ads based on years of like your Instagram and Facebook scrolling. If you want to show a juicer ad to 26 to 34 year old urban folk who recently watched that Netflix documentary about the guy who falls in love with an octopus, he loves that octopus. Facebook has like a million people who fit that exact profile. Snapchat doesn't know nearly as much about its users. The second factor of Facebook's advantage is that the average Facebook user is basically

your great aunt at this point, not your little cousin who's still dependent on allowance. Advertisers are way bigger fans of your aunt Beth who has more money to spend than a freshman who's on Snapchat. The last factor is the quality of ads. That's key. And this is where we think Snapchat has an advantage. Jack, what's the takeaway for our buddies over at Snapchat? Snapchat's future depends on turning augmented reality into e-commerce. Okay, so advertisers clearly prefer Facebook to Snapchat, but that could change if Snapchat just does better ads. And by better ads, we mean an ad that is more likely to lead to a sale. And for that, augmented reality, AR could be key. Well, they've invested in spectacles, but Moji lenses Snapchat has become the leader in augmented reality out of all of the

big tech companies. Now, currently, the augmented reality on Snapchat isn't used to like crack science. It's used for shenanigans like a dancing hot dog to Rihanna. Jack, we just don't say shenanigans enough, by the way. In the future, though, augmented reality is going to be used for ads to let you, you know, like try on something that is being advertised to you. It's wild. Snapchat was bragging in their earnings call about this new partnership with Estee Lauder. In their makeup ads on Snapchat, you can try on the makeup using Snapchat lenses. So, Jack, like the Snapchat app becomes your vanity mirror.

If AR lenses on Snapchat can turn it into a virtual dressing room, that could lead to more sales. And that is how Snapchat could finally start making more money on all these ads. And maybe their first ever profit. For our third and final story, we got 23 and Me is going public with Richard. I'm sorry, Sir Richard Branson. Important correction. 23 and me is trying to use your spit and ancestry to cure diseases. Also Jack, Richard Branson doesn't have a job.

He always seems to have five jobs. His family would most be like, uh, what about us? He's just smiling and starting things. It's like what he does. And now he's got a SPAC. He got a SPAC. It's called VG Acquis. Corp. And it's acquiring 23 and Me to take the genetic testing pioneer public. The ticker symbol of

this company is VGAC, but once the acquisition's complete, they're changing it to me to reflect 23 and Me. Which is good. I like what they did there, Jack. Now, the 23MMe product, you may have seen it, it really is unchanged since 2006. You're going to pay 100 bucks or so for a kit that arrives at your door. And in that kit is a vial that you spit a bunch of times into, and then you seal it up and send it off of the mail. Yeah, and then they evaluate the DNA, tell you about like 90 genetic traits and other health info, and that's pretty much it. Oh, there's a little more. They'll also show you a glimpse into your ancestry and your family tree. So the product's kind of unchanged, but the insights have significantly changed in the last 15 years. For instance, today,

their data shows you how vulnerable your blood type is to contracting COVID-19. Pretty wild. And if you've known ancestry DNA, that's like the lift to 23 and me's Uber. They pretty much do the same thing. 23 and me happened to kindly share their entire investor deck with the general public. So Jack and I jumped in snack style, and we noticed like one pretty interesting theme going on. They claim that they're an experience company. They're trying to make their chromosomes feel like an experience. Go right down to slide number five, and you're going to see these bold, bold claims. 23 and me says the leader of media is YouTube.

Yep. The leader of hospitality is Airbnb. I totally agree. And the leader of health care is 23 in Mexico. That's an interesting claim. That's led to like 11 million customers over the last few years. I'm a customer. This is Jack. I'm 6% Cocker Spaniel. Yeah, I can validate that. Now, that has led to $305 million in annual revenues, but they're also surprisingly losing money. Revenue is slowing. This is 23 and me. I'm 70% nervous. So Jack, what's the takeaway for our buddies over 23 and me?

23 and me is a genetically perfect representation of the flywheel. Okay, so the first part of a business drives the second part, which then recharges the first part, which amplifies the second part. That is the flywheel. It's called the flywheel effect, and it's like an accelerating circle of life. Yeah, the first part of the business is like spitting into 23MET tests. But the second part is kind of surprising. The second part is they actually now make medications based on that. GlaxoSmithKline is a global pharmaceutical company that invested 300 million in 23 and me a couple years ago to get access to all of that genetic data. they've teamed up, they're working on 30 drugs together. By the way, if you're uncomfortable sharing

your genetic data, you can opt out. So interesting thing about this industry, it takes about seven years to develop a drug a whole long time, but with the genetic data from 23 and Me, they think they can do it in half the time. That's why we think this is a flywheel, because if you hear that 23 and me data led to a new life-saving drug, yeah, then you're more likely to tell your friends to sign up and send your spit over to them. But then that data leads to more life-saving drugs and on and on it goes. 23 and Me is a genetically perfect representation of the flywheel. Even if it's losing some money right now.

Jack, and you'll whip up the takeaways for us to start the week. Canada Goose is a lot like Yeti and restoration hardware during this pandemic. But Wall Street had left its stock behind until last week. Snapchat is on the JV online ads team making 10 times less revenue per user than Facebook. Augmented reality, that's where Snap can beat Facebook. For our third and final story, 23 and Me is going public. but its revenue growth is slowing. But if it's data lead to life-saving drugs,

that could ignite the flywheel effect. Now, time for our snack fact of the day. This one's sent in by Jennifer, so we're just going to turn it over to Jennifer. Hey, Jack and Nick, I'm Jennifer Contraveas from Chicago. We do logistics. Madam C.J. Walker, born as Sarah Braid Love, on a cotton plantation in Delta, Louisiana,

the same plantation where her parents were enslaved before the Civil War, suffered from a scalp ailment that caused her to lose much of her hair. Her experimentation with home remedies and store-bought treatments led her to create a hair balm called Madame C.J. Walker's Wonderful Hair Grower, an African-American hair care product that came to market in 1905. She eventually opened up a factory and a beauty school in Pittsburgh. All this innovation and business savvy paved the way for her to become America's first female self-made millionaire. Jennifer, love the entrepreneurial profile. Madam C.J. basically took her problem,

turn it into a million dollar solution and a beauty school and a great snack fact. Keep the snack facts coming. If you want to send in your audio snack fact, we got a Google form in the notes of this episode. Snackers, you're going to have a fantastic week. We got your back, H-Y-H-Y-S-D. Have you had your snacks daily? If you know, you know. See you tomorrow.

And before we go, Ben and Haley, best of luck on this cross-country road trip. You got this. Kansas City, Sedona and Santa Fe. Those are my recommendation. Zesentanka. snack anniversary all the way snacking from turkey. Congrats to Justin Lee for finishing med school in Connecticut and Andres Rodriguez

having a baby in Monterey, Mexico. Happy birthday to Amit Day in Calcutta, India, and Jose Hufflai Iragora in Bogota, Columbia, and Jay Weddell in Columbus, Indiana, and A.D. Ready in Sunnyvale, California. And Demandze Warren in Tampa Bay, Florida, and Ben Wojewitt at

State College, Pennsylvania. And John Gorman in Crum, Texas. And happy birthday Tyler Troutman in Lumberton, Texas. And Cohen James in Cincinnati. Jan and Alex Koo, happy anniversary in Seattle. Happy fourth anniversary to Brian and Melissa in La Hala. And Derek and Emily, we don't know the number, but enjoy the Annie in St. Louis. Congrats Jorge Garcia for moving into a new pad in Austin, Texas. And Sajiv, 31st birthday from L.A., living in Tel Aviv, but stuck for the past month. Now in Buenos Aires, due to the pandemic.

That doesn't sound too bad, though. Your wife sends her love. This is Jack. I own stock of Netflix. 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 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.