The Best One Yet - “Cell-Based Meats disrupting Plant-Based Meats” — Memphis Meats raises $161M. Delta shares $1.6B of profits. GM launches a true robocar.

Episode Date: January 23, 2020

Delta unveiled the biggest corporate bonus plan ever, so we’re looking at its Return On Investment strategy (Happy flight attendants = Happy fliers). GM unveiled a robocar that reaches Level 5 on the all-mighty (and unofficial) self-driving car measuring stick for self-driving-ness. And startup Memphis Meats snags the biggest ever fundraise for a cell-based meat company — growing chicken thighs in the lab.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. And this is Snacks. Daily is Thursday, January 23rd. Nick, I'm as happy as a Delta flight attendant. Jack just bit his shirt he's getting so hungry over there. This is the best pod yet because our first story is about Delta, which made a ton of profits in 2019, so much that it's giving away a third of it back to its employees. A.k.a. about two months of pay.

We're looking at the three options companies have with their profits. You know what they say. Happy flight attendants. Happy flyers. The old adage. In story, Jack, what we got? Nick, it's finally here. What are you talking about?

General Motors unveiled a robocard that has no gas. Okay. No steering wheel. I don't know how this works. And six seats. Freaking me out. We looked at it. It looks like a giant microwave, people.

And we're going to remind you of the five different levels of self-driving cars. Six, if you include the auspicious level zero. Yeah. You've probably driven a level two self-driving car already. And you can brag to people about this. Third and final story, Jack. Memphis meets. Great name, bad name.

Grace land. It's where Elvis is from. thing. What do we got? This is the latest alternative meat and it's not plant-based. It's meat-based. But that meat was grown in a petri dish. It has raised $161 million to try to make cell-based meats a thing. Now, Snackers, before we jump into all that, you know we have spoken many a time with you about subscription. Subscription saturation. The diagnosis? You have so many subscriptions. You need a medical prescription. Dr. Kramer, this is insane. We found another brought to you by our buddies at Mercedes Benz. Just when you thought you had too many subscriptions, get this, it's an app-based

car subscription. It's basically rent the runway, but instead of taking out a dress, you're taking out a G-WAT. Snackers, if you're driving around in Nashville or lovely Philadelphia, you could have access to this wonderful-ish thing for as low as $1,100 a month. No big deal. You get access to 30 different Mercedes models from San Francisco. to SUVs to convertible? If you've got like aggressive FOMO and Fobo when it comes to driving, apparently this is made for you, Chad. Here's the deal.

You look at the app, you see what cars available. You drive into the garage and you can return the bends you're currently in and take a new bends out with you. The big question, how are you treating this vehicle? Is this like a rental car thing? You topping this thing off with gas? Do you need to clean it out before you return it? If you're eating like peanuts, are you going to push the crumbs away and clean them up?

Are you going to leave them in there? Snackers, if you have a 10-week summer inter- chip this summer. Oh my god. We have some advice. Buy a Casper mattress. Return it after 90 days for free. Hashtag not mad. The thousand dollars of money you saved on that Casper return? Pour that into the Mercedes car subscription. And you got a G-Wagon all summer. Boom. Subscripturation for days. Let's hit our three stories. It's actually about the hair ain't food. It's air candy. They don't reflect the views of the robberhood family. It's all informational 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. Jack, for our first story, can you please stick in in the overhead compartment and do away with all electronic devices? Please deliver your takeaway before delivering the takeaways of others.

Delta Airlines just dished out $1.6 billion in bonuses for its employees. That's a lot of money. Full disclosure here, Nick is a Delta groupie. We're talking fan boys. I'm not trying to brag, but I pretty much reached Unobtainium status. When Nick and I get on a flight together, he's like, oh, Jack, I'll see it on the plane. They're calling me. They're like, the plane's not even here.

It's like they're flying me on a plane to get to the plane. It's not a big deal. Actually, they're running out of, like, actual Sky Miles, precious metals. Yeah. Diamond, what carrot diamond are you? Definitely. Platinum is coming next. Now, if you've noticed your flight attendant is giving out extra kind bar.

It could be because on Valentine's Day, 90,000 Delta employees are getting a check. And that check is going to include some money. And that money is two months worth of their salary. I thought you were going to keep going there. Now, that is because of a profit-sharing deal. Delta is giving away $1.6 billion, which is 33% of its total profit from last year. This is the sixth year that Delta has paid its employees over a billion dollars in profit sharing. And this time, it's a record.

Yeah, cough, cough. Please, can you guys do away with the cheese plates? Every breakfast item includes a bunch of cheese. It's not what I want for breakfast. We need better breakfast on the Cranc continental flights. Turns out this profit sharing is a Delta company tradition. We looked back in 2014. This was jumping in snacks out to the press release.

It's beautiful thing. The press release from 2014 was like verbatim the same as this year's, just with updated years and updated amounts. Jerry, just copy, paste, and changes the number. There's a word doc, Jerry. Jerry, seriously, it doesn't matter. You're going to get a bonus anyway. Now, to be clear, the high-income executives at Delta, like the officers, directors, and general managers. I think, I assume all these people have some kind of thing on their jacket, like the extra wings.

A lapel. Yeah, lapel. Now, they're getting their normal bonuses. So this $1.6 billion, this two months of extra pay, it's for the rank and file worker bees. Including what Jack and I think is maybe the greatest job of all. The guy who gets to wear the big headphones stand in front of a plane and, and then use batons to determine where it goes. It's an international language.

This way. That way. But no words. Stop. This guy's amazing. I know who he is, where he works. It's incredible. Now, Delta claims this is the largest profit-sharing payout in corporate history. Like, not just Delta, any company.

It sounds bold, and it is, but Delta's not the only one or the only industry that does this. Now, some other companies are generous. In fact, look at Detroit. Since 2015, General Motors, Ford and Fiat Chrysler, have given a combined $5 billion of these bonus checks back to their employees at the end of profitable years. Also, there are other airlines that do a similar thing, just not as big. Makes us wonder, is this a union thing? Could it be a union thing?

Airlines have lots of unions. True. Car companies have lots of unions. And these are the industries we're seeing where profits are going back to employees. So, Jack, what's the takeaway for our buddies over at Delta? What's the ROI for Delta? What is Delta getting back from this? what is the return on investment?

Now, Snackers, there are three things that companies can do with their profits. First, they can repay their debts if they're up to their eyeballs in debt. Yeah, that's paying back their IOUs. Second, they can send a dividend to their shareholders or buyback stock. Basically, they're rewarding their shareholders for being owners of the company. Third, they can invest in growth opportunities for the company. They can invest in new factories, new planes, or this. So what is the return on this?

Bonus checks for employees. Well, first, higher morale means happier customers because the flight attendants are going to be a lot chippier, not as frustrated, and just really nice people giving you extra candy bars. Second, fewer people are going to ditch Delta and find some other airline, and lower turnover means lower costs for HR to train new workers. Also just creates a general corporate culture of kind of happiness. Generosity. Spread the wealth. Beautiful thing. For our second story, Memphis Meats just snagged $161 million in fresh funding, or as Jack likes to say,

Someone wrote them a check. Someone wrote them a check for 161 million. And this is the biggest investment ever in cell-based meat. We're not talking about plant-based meat. Which is like pea-based burgers. Or meat-based plants. Which is like meat-based carrots. This is more like meat-based meats.

But it's actually innovative, and we'll tell you why. This is meat that is grown in a laboratory. Sounds freaky. Shouldn't be that freaky, though. It tastes and looks just like regular animal meat, a.k.a. cell-based meat. Now, we know a lot of you home scientists are going to want to know how to do this.

Basically, you're going to need, like, a cell of an animal. And then you'll need a bioreactor, which is a fancy big metal jug. Yeah, just call quezon art. I'll whip one up for you. And with the animal cells, you need liquid to feed that little piece of animal tissue. Yeah.

And, like, in a very scientific way, it will actually grow. Yeah, you know, kind of freaky. Kind of like having a succulent six months, or sorry, six weeks later, boom, you got a chicken breast. Now, the company behind this, Memphis Meets claims this is more efficient because raising an animal on a farm requires lots of food. So true.

Lots of water. Yeah. And a whole bunch of land to let that cattle graze. Yeah, you've got all these cattle. They're socializing. They're living their lives. They don't really know that they're not going to be, you know, there. Now, on the other hand, Memphis Meets feeds this tiny bit of animal tissue.

Jack's doing air quotes on the feeds there. Yeah. That's their words. They say they're feeding the animal tissue. The exact amount of nutrients it needs to grow and nothing more. We're talking amino acids, sugars, trace minerals, and, you know, just a few vitamins for taste. If this sounds like an assembly line process to raise life, that's because it is. Yeah.

Kind of reminds me of brave new world. Aldous Huxley just finished it. It's a little dystopian, but then again, so is the concept of raising animals to slaughter animals. Right. This is kind of like messed up that we're perfectly optimizing the life process. Literally. At least we don't need to kill something. People just want the chicken breast.

we shall just give them the chicken breast. Memphis meat is not in stores yet. They're just building out a pilot production plant, but they have made like a burger that people have tried. Yeah. You can Google it. There's a taste test situation, and they claim it tastes the same.

The next challenge, though, for Memphis meats is going to be facing the acronyms. The USDA. True. I don't know what those stand for. But you need approval for both of them before you can start selling the product. In case you're wondering why there is now

such a focus on these alternative meats, the answer is because meat demand is going to double by 2050. And can the Earth handle doubling meat production by 2050? The answer is probably no. No. No. Mother Earth cannot handle twice as many cattle and pigs. She's like

and chickens. Like, come on, give me a breakover. Land and water are the two scarce resources that could prevent us from feeding the world by 2050. Now, Jack and I dug up this quote from the legend Winston Churchill, which in some

ways basically predicted Memphis meats. He was a two-time prime minister of the UK. This quote goes back to 1931. He said, We shall escape the absurdity of growing a whole chicken in order to eat just the breast or just the wing. Jack, I'm going to interrupt you right there because I feel like you're going half-Zs on the...

You're not going full way on the British accent. You feel like you're hesitating. I'm confused with the accent here. By growing these pots separately under a suitable medium. I don't think that was British either. I was kind of going in something... We're going to London next week, by the way. What's the takeaway for our buddies over at Memphis Meets?

By the way, very prescient line by Winston Churchill. Incredible. Is he a soothsair? I think he's from the 23rd century? Here's the takeaway, Nick. Memphis Meets is trying to disrupt plant-based meats. The idea is that conventional cattle raising for meat is not sustainable. But both plant-based and cell-based meats attack that problem of conventional cattle raisin.

Let's look at four key measurements here. First, the morals. The morals, both plant-based meats and cell-based meats prevent animals from being slothed. All right, the second stage here, environmental. I say that plant-based meats win because they have like 90% fewer greenhouse gases for a plant-based burger versus a beef burger. Cell-based burgers are going to be less resources, but it's not clear how much less the studies are inconclusive. The third key year is health, in which case you can argue that cell-based meats are kind of winning. Right.

Plant-based burgers, they're not that healthy. No, there's actually a lot of oil and processed stuff. They're not veggie burgers. And cell-based meats can be bred to be. more healthy than a chicken breast. Again, Brave New World, this is kind of messed up. The fourth and final pillar, which one will win on business? To be determined. Whichever can make the product cheaper, faster. That's the winner. For our third and final story, General Motors just unveiled a highly anticipated robocard. Jack, can you share the name with us, which is insane?

Origin. Origin. It's called origin. Kind of could be like a fragrance for dudes. Or the first movie of every superhero series. Wolverines got an origin. Batman, Origin. 007, Origin. Superman, Origin. Wonder Woman, we could use an origin story. Now, Cruz is the name of a San Francisco-based tech company that develops computer brains that can drive a car.

It got acquired by General Motors way back in just 2016, and they just unveiled origin. This thing looks like a ski gondola with wheels. Here's the kicker. Every seat in it is. is the same, as in they're all equal, as in there's no driver seat. It's like a living room. You got three seats on one side, three seats on the other side. They're all facing each other.

And yes, Nick, no driver's seat. Oh, you know what else there isn't? No steering wheel. No gas pedals. Actually, there are a bunch of cup holders, which is great. Now, this is not just a concept car. GM says this is a fully engineered vehicle that is on its way to production. It also sounds like it could be a very awkward thing because you're kind of forced to just talk to everyone around you in the car.

Also, Snackers, be scared. skeptical of that like, so true, claim, because car executives have been infamously over-optimistic when it comes to when self-driving cars will actually be here. I think Elon Musk promised us robo-taxies six years ago. Now, the name, origin, it's like the center of a graph. You got the x-axis, the y-axis, and right in the middle, zero comma zero. I don't even think we're allowed to say it. I think you got to hire the guy who does movie trailers to be like, origin. Yes. Origin. Now, the question you need to ask yourself when it comes to self-driving, cars. What level of automation is this? Snackers, there are five levels of automation when it comes to

self-driving cars. Six if you include level zero. Let's start level zero. What do we got you? This is like a stick shift Chevy cavalier that you learned how to drive with some annoying driver's ed teacher in high school. Level one is just your standard cruise control. We've had it for decades. Yeah, basic. Level two is adaptive cruise control. Cruise control's cooler cousin. Yeah. The car has some like automation here. It will control how fast you're It'll even slow down if you're coming up on a car that shouldn't be in the passing lane. It should be in the right lane. Level three is mostly self-driving under some conditions.

Tesla's autopilot, I think, is a level three self-driving. It would fit very snugly in there. It works, but like make sure you're only on the highway and make sure it's not raining. Level four is fully self-driving sometimes. Make sure it's not snowing. Yeah. Make sure there's no pedestrians around. No wintry mix.

Everyone hates wintering mix. And it can self-drive. Now, level five, there's no steering wheel, there's no gas pedal. It's always, always, always self-drive. So when it comes to origin, this seems to be a level four. Yes, it's self-driving, but we expect it won't be able to get out of every pickle. It finds itself in all the roads. Classic pickle that.

Now, this is the third time we've referenced pickles in like three days. Oh, the Bavarian pickle. The Bavarian pickle is a legend. Now, when Origin doesn't know what to do, let's say there's like a moving van in its lane, and like a human would just drive around the moving. Vandah and safe. Origin won't cross the median. No, it plays by the rules.

And so you're going to have to hit like a red button, and somebody at Cruise headquarters is going to hijack control of this vehicle. We got a, looks like a double park situation. We're going to have to go around here. And that person will literally have like a remote control, like a video game, and drive the car around and then let it drive itself again. So, Jack, what's the takeaway for our buddies over at GM and Cruise? If you need a ride, check Uber, check Lyft,

but also check Waymo and Cruel. Snackers, we've known that Google and General Motors were spending billions on self-driving cars. Yes, and they're not trying to sell you a self-driving car at a car dealership. No, no, no, no, no. They're trying to launch fleets of self-driving Ubers. And once these cities and states pass laws allowing Sons steering wheel wheel cars to happen, they're currently illegal everywhere. Like these rides aren't legal yet.

When that happens, boom, as soon as the regulation changes, cruise will launch in that city. I assume it's going to be in Arizona. They're going to launch an app. It's going to be called like Cruise Ruff. rides or something. And then you're going to check Uber, check Lyft, check Waymo and Cruz because they might offer rides cheaper because they don't have to pay a driver. By the way, this is Nick and both Jack and I own shares of Tesla.

Jack, can you whip up the takeaways for us over there? Delta is giving back $1.6 billion of its profits to its employees. Better company morale, less HR costs, happier companies better profits for next year, which leads to more bonuses. Second story, Memphis Meets is trying to eliminate the animal from the meat. Cell-based meats, competing with plant-based meats to compete with meat-based meats. Third and final story. Circle of Life.

General Motors's cruise has fully developed a six-seater microwave on wheels. The origin could be offering a $5 ride soon instead of a $10 human-driven lift. Now, Snackers, time for our snack fact. Tweeted at us by Herod from Los Gatos, California. I think they pronounce it Los Gatos. I know they do, but they shouldn't. It should be Los Gatos. Pablo Escobar.

Medellian himself, he had a drug empire that was so big and profitable, it was bringing in $420 million of revenue every single week. By the way, we're definitely not endorsing this. No. This is the drug trade. In fact, it was so big that they lost $2.1 billion a year in cash that would be either lost or physically damaged. He also used to spend $2,500 a month on rubber bands to hold together giant wads of cash.

Which you know, his account was like, Pablo, can we not use? use the unicorn colored bands. They're so expensive. He's also a great account. He's like, we're missing $2,126,0,338. A lot of that's going to the rubber bands. Snackers, tweet us at Robin Hood Snacks. We would love to get you some snack fact shoutouts.

If you haven't yet, make sure you review us on Apple. Give us five stars if you're feeling good. We love five stars. It helps us get discovered in the Apple platform. Snackers, can't wait to chat with you tomorrow. We'll see you then. Max 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.