The Best One Yet - “Canal Street of the Internet” — Wish’s public desire. A Wonder Woman Christmas. Affirm’s overdependent IPO.

Episode Date: November 23, 2020

Circle the calendar (again) for December 25th: It’s the new Streaming-palooza, courtesy of Wonder Woman and HBO. Wish is IPO’ing because Amazon doesn’t feel enough like a TV gameshow. And Affirm is also going public because you hate credit cards.$WISH $AFRM $TGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn 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, November 23rd. Happy last week of Thanksgiving. This happens to be the best Snacks Daily yet. This is so much better than the Snacks Daily. We did the other day. Jack, what is our first story? What do we got over there? Affirm is IPOing on the belief that you hate credit cards. But funny thing, you still want to buy that thing you can't afford. Yeah, yeah. You still want to treat yourself. You still want to treat yourself. So Jack's second story, what else we got? Circle thy calendars for December 25th. It's not Chris. Actually, it is Christmas, but also we're calling it, it's going to be stream a paloza. A lot of new flicks coming out. A lot of new flicks. A lot of new media strategy. Third and final story, Jack, Wish is the fourth and final major company that announced last week there were IPOing. Honestly, this is getting exhausting. But Wish.com wants online shopping to feel more like, you know, a TV game show. Let's go with that. But Snackers, before we hit those three great stories, it is Monday. It is officially go time. It's go time, Jack. For consumers, it is officially the holiday season. starting this week. You don't need a Starbucks cup to tell you the time of the year,

though, Jack, Starbucks holiday cups technically do, I guess, tell us the time of year. They really do. For retailers, though, this is the holiday season. It's the most critical time of the year for them. Black Friday, extremely literal day. It was a holiday with a purpose. Yes. To help stores and retailers go from the unprofitable red ink into the profitable blacking. But Jack and I got curious because this is a critical week. We were curious about who the most important customer for all these retailers is. And we're not talking like, you know, 18 to 55 year old males, not demographics. What single customer is like the driver of Black Friday holiday sales? So apparently the most critical customer in the entire economy for this holiday season is the

queen of England. The queen herself. She's like her own economic stimulus package. Get this. She's spending $40,000 a year just on these holiday gifts. That's almost to half a thousand dollars for each year of age that she has. And apparently she's got a little Santa complex going on because she has a casual, you know, 620 people on her holiday list. That's right. The Queen of England purchases gifts every holiday for 620 people. And we actually did the math. Yeah. That's only $64 per gift, which is a little less royal than I expected with the $40,000. A little stingy for like giving to loyal subjects. They're loyal. They're extremely loyal. Now her go-to gift, it turns out, is a Christmas pudding served in a little box, which explains the $64.

This is a $64 nice figgy pudding is actually very nice. That sounds great. Oh, by the way, Netflix, season six for the Crown, we're writing the stories for you. That's what we do. Snackers, happy beginning of the holidays. Nick and I had three pods this week before Thanksgiving, and then we'll be back with you Monday. We're going to miss you, but in the meantime, we whipped up three wonderful stories. Let's hit him.

You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. It snacks about the hair ain't food. It's air candy. They don't reflect the views of the rob of her family. It's all information. just so you know 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 robberhood

financial LLC member fenra slash sipc for our first story wish is a global flea market in an app that just filed to ipm wish's ambitions are global its growth so far as local it feels like a bumper sticker we turn that into a bumper sticker i think that has some legs i think that has some legs i think it has a bumper sticker potential. Snackers, Wish might just ring a bell for you because it's an ad on the jersey of the Los Angeles Lakers since 2017. That's right. They paid $12 to $14 million a year for that great shoulder advertising, but that ads, those ads are worth way more than that. Oh my God, so much more. Get this, one year into the deal, the Laker signed, you know, LeBron, not bad. So then the most popular superstar on the planet was wearing Wish on his shoulder for two seasons, which included an NBA championship. So Wish, Wish, got kind of cocky and said, you know what? Things are going great. LeBron has this on his shoulder. Why don't we IPO? There you go. Now, Wish, which is based in San Francisco, they call themselves an affordable and entertaining mobile shopping experience for billions to enjoy. That's like a lot of words to say. So Jack and I prefer to call Wish the Chinatown of NYC in an app. Yeah,

minus the delicious sweet and sour food. That's true. They're missing on the food. If you head downtown from Soho, you've seen the epic sea of colorful, plastic, cheap, cheap, stuff that New Yorkers can indulge. Shops on shops on shops featuring Nerf footballs to bike helmets to fake passports. You can get it all and it's all very affordable. That's in Chinatown in New York City. But if you open up the Wish app, they offer all those lovely plastic direct from China's stuff charming in one e-commerce app.

So Snackers, you know what Jack and I did? We jumped in Snack Silent Jack. What was the first thing that you saw? Before I even downloaded it, Wish told me that their stuff was 60 to 90% off. We'll pay you to buy this stuff. And then they randomly showed me an assortment of stuff when I opened it, including a stainless steel watch for $4 and a weighted training vest for $18. Not too bad.

But Snackers, because we had to dive in a little further snack style, we noticed they had this one wild feature called Blitz Buy. You spin a wheel with the tap of your finger, and then there's a countdown clock for you to throw as many things in your shopping car as possible, and the discount grows, the more items you put in your car. Basically, this is supermarket sweep, but for you to do solo on your phone. Naturally, 108 million people are using this scrolling endlessly through random assortment of extremely low-priced goods.

All right, so Jack and I have to size at Wish. And when you're looking at a different strategy here that they're pursuing, you got to compare it to the leader in the field, in this case, Amazon. Right. There's two unique differences that Wish has from Amazon. All right, the first is actually kind of on the back end. You don't see this? but this affects why you're not paying those bigger prices.

Wish has no fulfillment centers. It holds no product. It has no inventory. It simply connects you directly with a factory, probably in China. Yeah, which ships directly to you. Wish isn't a physical thing. It's just like a mysterious in the air connector. We said it's based in San Francisco.

That means there's a few laptops in San Francisco, Property of Wish.com. And a server in the middle of Nebraska. Now, the second key difference with Amazon is that Wish's growth so far this year, is 32%. Yeah, this is like the best year ever for e-commerce and its growth is lagging Amazon. And remember, Amazon is like way ahead of Wish.

Yeah, it is. It shouldn't be growing faster than this little startup. Plus, Wish is unprofitable. Jack almost coughed on his coconut water. So Jack, what's the takeaway for our buddies over at Wish? Wish thinks it can do what dollar stores are doing, but more fun and more scalable. Snackers, in the U.S., Dollar General and Dollar Tree,

they are major stock market winners of the past decade. Both of those dollar store chains have added more locations, Nick, than we have McDonald's in this country to serve low-income America. So the first way that Wish thinks it's improving upon those dollar stores is by being more scalable. Right. By connecting shoppers directly with the low-cost Chinese suppliers, it can serve, it thinks, the entire world at low-cost. And the second key difference is that they actually think they can be more fun at Wish than the dollar stores. Every customer that walks into a dollar store sees the same dollar store. Yeah, you do.

But Wish's app learns. about you, just like TikTok, and shows you the stuff that will delight just you, like a weighted vest in my case. But here's the problem. Consistent losses, they show that running a whole global business, not focused on, you know, any single country, is pretty costly. For our second story, Jack, wrapped or unwrapped. Christmas presents? I haven't decided. I haven't decided. I haven't decided. Gotta be wrapped. One thing about this Christmas is the same as every other. People are going to want movies. But we're calling this Christmas, this December 25th, Christmas stream. Amma Palooza. Yes, we are, because this is like nothing else we've ever seen in media. Snackers,

HBO Max, it was the brave and foolish movie studio that took a blockbuster to theaters in the middle of a pandemic. That sounds like the trailer of like a drama where everything's going to go wrong. It actually ironically sounds like the trailer of a Christopher Nolan movie. Yeah, that takes on what we're talking about. Tenet, a movie that nobody saw. It made about $350 million globally in theaters, which wasn't even enough to cover costs. All right, so not only did Tenet lose money for HBO and its parent company, which is publicly traded AT&T, it didn't even drive subscriptions for their streaming products. And that matters because HBO Max lags way behind in terms of subscribers, despite its pretty legendary collection of movies and shows

like Game of Thrones. Jack, let's whip up our very own Nick and Jack whiteboard over here. We got HBO cable plus HBO Max. Together they've got, it looks like, 38 million subscribers. All right. That is half as subscribers as Disney Plus and a fifth of Netflix. Now, let's step back for a minute. There used to be rules on how movies could become available, like the classic, got to be in theaters for 75 days. And after 75 days, the movie could spread their wings to digital rental, digital purchase, DVD, Blu-ray,

or you'd like stumble into it on TNT on cable. Jack, throw that away. Studios are doing whatever they want this year and apparently forever. So HBO announced last week they're trying something totally new with Wonder Woman 1984, a movie that looks awesome. They're letting fans decide. They're going to let you decide. Because on December 25th, Wonder Woman is going to movie theaters and HBO Max at no extra charge.

So you can go to the theater and like risk it to defy the CDC. Or you can watch Safely at home. This is a customer-friendly move giving them the choice. Jack, why wouldn't every movie do this? We actually think this could be the future for movie debuts. So Jack, what's the takeaway for all of? our buddies who are streamers. The century-old movie industry, they're back in full experimentation mode. Snackers, every studio we've noticed is used in 2020 to try out a new movie launch strategy and maybe a few of them.

Disney, our buddies over at Disney, they've tried like every possible launch strategy this year. Let's go back to our whiteboard jack. First example here, no extra charge from Disney for direct to streaming of the Hamilton movie. They did that on 4th of July weekend. I watched it myself. It was great. And then they did direct to streaming, but at a premium price with $30 Mulan. I watched that the weekend it came out too. Not as good as Hamilton. Full disclosure here. But for major blockbusters like Star Wars, Avatar, and Marvel,

Disney said, you know what, we're going to pump the brakes and wait until the second half of next year. Those profit puppies are like too valuable to place into an experiment. And Jack's probably going to see them anyway. But then Disney's taking its movie Soul, which is a Pixar film, which it confirmed is coming to Disney Plus directly on Christmas Day at no extra charge. That's why we're calling it Christmas Dream of Paloosa. So Snackers, we're thinking driving subscribers to streaming is the most important consideration here for any big media company.

How many million streaming subscribers do you have? That's what Wall Street cares about right now. Cable is dying. Theaters are like they're very injured. Streaming, though, is booming. For our third and final story, we've got another IPO here. Affirm is the legend of buy now, pay later, and they also want to go public in the next month. That's what this guy did with Affirm, which just filed its S-1 to go public.

Yes, they did. And I'll tell you, the S-1 reads like an Instagram post. Hey, how many times are you going to mention the word community Airbnb? We get it. A lot of fluffy flowerly language like purpose, community. Delightful? Responsibility. Let's go with a lot of the responsibility.

But funny thing Jack and I noticed about this IPO paperwork from a firm kind of reads like a college term paper. Yeah, it opens with a thesis on how millennials they hate using credit cards. Yeah, get this. Apparently 25% of Americans like age 24 to 36 don't use credit cards. But guess what? a big percentage of that Americans age 24 to 36, still want to buy things they can't afford right now. You're absolutely right. So credit cards, you know, they let you buy now and pay later. So a firm lets you buy now and pay later. But instead of applying for a credit card and having it like chase down your credit score,

a firm is just a one-click feature that you see at the checkout of your go-to retailer's website. Jack, $269 at Walmart for that wet, dry electric shaver I know you've been cruising for. You could pay $269 right now, or you could click a firm and pay $25 bucks a month over the next 12 months with no interest. And their key value proposition here is that a firm often charges 0% interest, but definitely no late fees. Sometimes they do charge interest, but in the instances they don't charge interest, they're still making money because the merchant, like Walmart in this case, they pay a firm for helping them close the sale. So Snackers, here's what Jack and I find fascinating about a firm. This is their key insight. You trust the brand you buy from more than the brand offering you money. For instance, that industrial chic coffee table with reclaimed pipes from West Elm.

There's nothing Jack likes more than mid-century modern furniture. I can't get this guy to stop buying stuff. It's amazing. Well, if you're buying that coffee table, you'd rather be indebted to West Elm who actually made the table than like your Wells Fargo visa car. Because if you lived through the 2009 financial crisis like Jack and I did, you may be one of the many millennials who trust the furniture. more than the finance company. And that's why revenues have doubled this year to half a billion

dollars for a firm, mainly because we're all just buying more stuff online, so we're seeing that affirm option more often at the checkout. Key asterisk here, though, a firm, shocker, still not profitable. Because it's a tech company. Yep, exactly. They did only lose $15 million in the last three months, which is a whole lot less than the $1 billion that Uber lost, by the way. But besides the unprofitability, we noticed another problem. Something that was mentioned, times in the S1 document. Get this, they mentioned the word Peloton 20 times. So, Jack, what's the takeaway for our buddies over at a firm?

A firm has one of the most classic business risks, over dependence on a single customer. Snackers, a firm name drop Peloton so many times in its IPO paperwork because 28% of its sales come from Peloton. That's right. Peloton offers a firm at the end of every bike, so you can either pay $2,000 now. Okay. Or get zero percent interest, $53 a month payments, which is a pretty good deal. Okay. And that's why Peloton ended up making up $50 million of a firm's revenues in just the last quarter. Now, you could look at that as good news for a firm. Yeah, you could. Because, you know, Pelotinistas are more affluent, so they're more likely to not default and actually pay a firm back. But the Fitness Paloosa,

the at-home fitness paloosa that Peloton is riding right now, that could change. Or Peloton could pick a different financing partner and cut a firm out of this deal. Boom, 28% of a firm's revenue suddenly would disappear. Our firm has that rare, freaky, over-dependence on one customer. Jack, can you whip up the takeaways for us to start the week? Wish is an eclectic flea market manifested in an app. Great synonyms, Jack. It's IPOing because its logo basically won the NBA finals. Second story. The movie industry is back in full experimentation mode this year. That's why Wonder Woman is given a streaming poloza for your subscription. this Christmas. For our third and final story, in English, a firm means to assert or to state confidently.

It does. In business, it basically means buy now, pay later, and depend too much on one customer. But screw those credit card companies. We don't like that. We're not a credit card company. Don't call us a credit card. Now, time for our snack fact of the day. This one sent in by Liam from Schenectady, New York, great town, Dutchman. Go Dutchman, which just happened to be my childhood nickname, by the way. And it also has to be where Jack's brother went to school, my dad. There's like a whole thing here. It's a great place. There's a whole thing here.

But there's also a whole thing with money. Turns out there are more $100 bills in circulation than there are $1 bills. But get this, four-fifths of those Benjamins, they're circulating outside the United States. What the heck? Most of those $100 bills, they're hanging out abroad. Makes no sense. Actually, it's kind of freaky. It actually makes a lot of sense.

Snackers, Jack and I want you have a fantastic kickoff to the holiday week. So we want to remind you that this podcast is produced by Robin Hood, which is done. democratizing finance for all. Snacks Daily, Robin Hood's Snacks, Robin Hood. For Snack's podcast listeners, you get a free stock if you set up a Robin Hood account. All you got to do, go to snackspodcast.robinhood.com to get your free stock on us. By the way, if you already have a Robin Hood account, awesome. You can still get a free stock if you refer Robin Hood to a buddy. Snackspodcast.com for your free stock. And by the way, H. Y, H. H. Y, Y, Y, Y, Sday. If you know, you know. And before we go, big happy birthday to Jaylen Chance over in Jacksonville, Florida.

And Giovanni Rodriguez in Woodbridge, Virginia. And Dan and Buttercup both have birthdays over in Long Island City. And Tina H. in Dallas, Texas. And Glenn in Chicago, which does logistics. And happy second anniversary to Megan and Justin Mass in West Fargo, North Dakota. And Robert, congrats on the new job with the Islanders and being from Long Island. Although this is a Rangers podcast. Although Long Island has fantastic bagels. Ninety-four. This is Jack. Nick own stock of Shopify. I own stock of Amazon. 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. The Free Stock Program of Robin Hood is subject to certain limitations and the offer is available to new users only subject to the terms and conditions at RBNh.co slash free stock. Free stock is chosen randomly from the program's inventory and snackers investing is risky.