The Best One Yet - 🌯“Chipotle 4B TikTok views” — Stocks’ 13% drop. Thyssenkrupp’s elevator sale. Chipotle’s viral strategy.

Episode Date: March 2, 2020

Context is king, so we’re looking at the market’s decline last week — the worst since the financial crisis. Chipotle is powered by menu items lately, and we noticed they whipped up viral attention on TikTok — but we’re skeptical of the numbers. And Thyssenkrupp is the German elevator company that just sold its elevator biz — just like another elevator company did.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, welcome back. It is Monday, March 2nd. We got the best one yet. Yes. This is a T-Boy for sure.

So much better. First story, content is king. We like to say context is king. We've been saying that for a few years now. We're looking at what happened last week in stock markets. It was the worst week since the financial crisis. Our second story, Chipotle's latest social media promotion hit insane numbers. We're talking 3.9 billion with a B views.

That is like two-thirds of the world. That's a ridiculous. That's more than Mars. TikTok is bragging about what it can do for marketers. So we're unpealing that with deep skepticism. We're dancing. We're kind of enjoying it. It actually was a blast.

Third and final story. Tusen Krupp. I think you mispronounce that one. Jack meant to say Thysen Krupp. No, no, no. Tysen Kroop is a German elevator company just sold its elevator business. And we notice that's kind of a trend in elevators, you know, selling off your elevator business. Another trend in elevators, not having buttons in the elevator.

You just got to push that digital iPad on the bottom. But before we jump into that, a belated national peanut butter lover's day. It was yesterday. Jack and I are celebrating today. We can all celebrate today. I think that's fair. I mean, we're talking about peep butter, which is the grandfather of all butters. My favorite nut butter is this new one from Trader Joe's. It's called mixed nut butter. It's got peanuts, almonds, cashews, hazelnuts.

Jack can't make up his mind. Throw a few Brazil nuts in there. I don't know. I don't know. I have a peanut butter splurge every day at 4 p.m. It feels so good. I tend to go with the Justin's maple flavored almond butter that when I want to treat myself. We are thankful for Kelly Johnson.

who hails from Chicago, Illinois. She sent this in as a snack fact. We promoted it. Yeah, we promoted it to our intro stuff. Bakers. It turns out bakers are using about 230,000 pounds of peanut butter every week to bake those Girl Scouts cookies. The dosie does.

The dosie does. Not the tag alongs. No, don't mess with those ones. Now, also, we want to give a belated black history month honor to George Washington Carver, who is the man responsible for all the aforementioned peanut butter. George Washington Carver was born into slavery in Missouri in the 1800s. He then grew up to start researching peanut cultivation as an alternative crop for black farmers to grow their income in the 19th century. Now, that was huge for the agriculture industry in America, but he also invented, I guess he, did he invent or did he just do it for the first time?

I know he's like a barefoot contess of the 19th century. 200 different recipes for peanut-based products. We're talking peanut milks, peanut butter, peanut cheeses. A whole bunch of other ones, 197 other ones. Can someone please whip up some peanut cheese for us at 4 p.m. Washington Carver became a professor at the Tuskegee Institute in Alabama. He is also a legendary scientist, the man behind the peanut. Snackers, happy national peanut buttered egg belated.

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. The snacks about to hear 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.

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 FINRA slash SIPC. For our first story, the market's 11-year bull run is under threat. That's because last week the market fell the most in one week since the financial crisis. This is the thing that everyone's talking about, and this is the thing we should begin a Monday pod with.

Let's talk about the S&P 500. Oh, yeah. Single number. This is one single number that gives you a good sense. of the entire U.S. stock market. It's arguably the most efficient number ever created. That's because it includes the stock prices of the 500 most valuable American companies. Now, let's look a little back on, you know, the last week, February 19th. Just about two weeks ago. The S&P 500 is worth, you know, it's at 3,386. Which was a record high. Points. Now, just two weeks later, February 28th, actually seven trading days later, it has dropped to 2954. That is a 13% drop.

in seven trading days. That is significant. Now, the last time we had a week, as bad as last week, was October of 2008, which was when the financial crisis was happened. I remember, well, Jack was wearing pajamas. We were roommates. We were living in bunk beds. I was freezing.

I was bottom bunk. Of course you were bottom bunk. Of course you were bottom bunk. I mean, when I was asking, I'm like, we're in Vermont. Do I have to wear three pairs of socks or four? I remember the TV on top of our fridge was like 700 pounds. I remember we were making the transition from like VHS to DVD on the Seinfeld tape. All right, but a lot of things have changed from the financial crisis days to today.

Coronavirus is an outside threat to multiple economies. Not like in 08 when we had a problem inside our economy, which was the housing bubble. And was mainly affecting our economy first. Now, this next part, I really wish I could show you a graph, but I can't. So we'll just talk this out. I mean, hey, we love talking with you guys. It's really fun, but there are some limitations to audio. Snackers, in March of 2009, the stock market hit the bottom of the post-

financial crisis moment. I was going study abroad in Berlin. I was about to visit me. I actually I visited Jack Flynn. We only consumed, I think it was chocolate and pretzels for three straight days. Since then, stocks, the S&P 500 has more than quadrupled overall. Snackers, there has also not been a single bear market, aka a decline of 20% since then. In that entire period. So we have 11 straight years without a 20% decline. That is the longest streak ever in which markets have not declined 20% at any point. We're down. We're down. 13% right now, but this is a relatively normal phase of a historically climbing stock market. Now, Snackers, what Jack and I found most fascinating was what happened Friday afternoon

right before the weekend when the Fed basically promised to intervene. They promised to intervene if necessary. We're talking about Jerome Powell, who's the chairman of the Federal Reserve. Big listener to the Snacks Daily. Snack are hardcore. He said, if the economy really suffers because of coronavirus and things get worse in the stock market, the Fed would intervene with lower interest rates, with charge. chugging in a bunch of money and try to rescue the economy. The last time we saw the Fed doing

something like this was the years right after the financial crisis to prop up the economy. So, Jack, what's the takeaway for our buddies over in basically everyone who's involved in the economy? The thing investors hate the most right now is the uncertainty. Coronavirus could be a major hit to the economy snackers or could just be a blip. Let's talk about the worst case scenario. Sorry, I had to go there, Nick. He's doing this. We're going to talk about the worst case scenario. What if the U.S. government mandates that we all stay home for 30 days to to let this virus, like, die out. Well, DoorDash, Slack, and Peloton are all appreciative of that situation.

So would Netflix, actually. But the economy would definitely contract. Factories would be closed. Profits would fall. But eventually, it would end. On the other side of the spectrum, you still have a best-case scenario possible, where the disease is contained and there's no disruption to everyone's daily life. Now, that is a pretty wild disparity between a month of the economy pretty much shutting down

and nothing really happening bad. Between points A and B, we're talking a lot of. distance here. And with great uncertainty like that, a lot of investors have taken their gains in the stock market from the past 11 years, and they're going to wait and see what happens. It's because of uncertainty. For our second story, Chipotle's viral social media marketing moment. I can't believe we pulled that out. That was incredible. Hit 3.9 billion views. But we are totally skeptical of this. We're talking about TikTok here, which is where it happened. The social media app powered by like a karaoke style video. Count me as a skeptic. Yep. Also, like 69% of TikTok users.

are like 14. If you're using TikTok, odds are you can't vote in the next election. We're talking about Chipotle's October burrito marketing campaign, which all took place on TikTok. Back in October, you may have noticed some videos of like a magician astronaut eating at Chipotle. And then you saw an influencer named Brittany Brosky, aka kombucha girl, eating guacamole at Chipotle, ironically tagging at Chipotle. And then you made him notice a famous Pomeranian account randomly posting, by the way, adorable, about free deliolce. delivery on Sundays if you order Chipotle, $10 or more. Saying adorable and Pomeranian is redundant. Also, each one of these posts was tag with hashtag burrito.

Yeah. Promoting the $4 burritos at Chipotle. That entire campaign was fascinating because now we're starting to see the numbers so we can evaluate. Get this, Snackers. The hashtag burrito was viewed. Can we spell that? Hashtag B-O-R-I-T-O-R-I-T-O. Because it was Halloween.

It was Halloween. It sounds kind of like burrito. It was borderline clever. hashtag burrito was viewed 4 billion times in October on TikTok. Once again, we repeat, there are 7 billion people on Earth. This thing got viewed 4 billion times. I don't remember our science classes, Jack, but don't we have only like a few billion atoms on Earth even?

And no one even knows. That's probably way wrong. I think we have catrillions and catrillions of atoms. I'm rounding down. I'm rounding down. Now, here's the thing, though, TikTok has only been downloaded 145 million times in the U.S., and this was a U.S. only marketing campaign. So that means that every TikTok user watch the video.

video like 27 times. Every TikTok user in the U.S. had to watch it 27 times for this math to work out. The video was really good. Ticktok users are really bored or the math is kind of off. Or we're getting lied to. We're getting lied to on the four billion. By the way, Snackers, in case you're not skeptical, turns out TikTok won't define what a quote unquote view is. We actually think you listening to this podcast qualifies as a view of the burrito campaign. Snackers, did you just like buy something at a store? That was a view. By the way, the only reason this trend happened is because Chipotle can promote a hashtag for $150,000 for the first six days on Chipotle.

But the real kicker is to pay the influencers that were promoting that hashtag. Like kombucha girl. That could be like $100,000 for each kind of influencer and we have no idea how many they used. We also don't know how much of that money is going to the Pomeranian and how much is going to the Pomeranian's parent. Once again, adorable. It does deserve to be said.

Now, we're truly wondering, was this a good deal for Chipotle? Now, Chipotle's head of marketing did point out that. burrito sales, sorry, burrito burrito sales rose 15% more than last year. But how much did Chipotle spend last year on TikTok? And how much did they spend this year? And we don't actually know. And if this was worth it, then we'd expect add money to start moving away from like other social media apps, especially away from Snapchat because they want to go to TikTok. But if this wasn't worth it for Chipotle, then Chipotle just wasted a bunch of burrito money. Bottom mind, you don't have to remind us that guac is extra every time Chipotle. So Jack, what's the takeaway for our buddies

over Chipotle guac is extra? TikTok's got a catch-22 problem. Snackers, to gain more advertisers and credibility in the U.S., TikTok needs to offer more user data and transparency. Right now, Chipotle could only target the hashtag burrito campaign based on your gender and your location. It had no idea if you actually like burritos. Right. Facebook, meanwhile, you can advertise to like a 26-year-old guy who's got a Labradoodle, goes to a Nescacac school, and lives with three roommates, two of which are named Timmy. Also, what's a view?

No one knows if you got to let us know. But here's the funny thing about TikTok. The more user data it gathers so it can do it more like Facebook it becomes. The more advertising it can do, the more concern it gets from the U.S. government. The U.S. Army has already banned ads on TikTok because they are just, they're just suspicious. Right, because TikTok's owned by China's bite dance, and China's bite dance may be influenced by China's government. So TikTok is the greatest threat to Snapchat. And the greatest threat to Snapchat's greatest threat is itself.

Whoa. Guadu. Guadu. For our third and final story, Jack, floor 13 or no floor 13? No floor 13. New Yorkers know what we're talking about. Thysen Corp is selling off its elevator biz for $19 billion. Nick, we went over this.

It's Tusencropp. Snaggers, no joke. Jack and I rehearsed this for four hours. I got this guy like slapping my wrist with a ruler over here. Dane. I can't believe you said Thysen Corp. I have no joke, Jack put a cupcake in front of me, and every time I mispronounced it, he moved the cupcake.

a little further away. Snackers, if Pepsi and Coke merged, you'd get America's version of Tusen Krupp. Right. They also would name it Pope, which would be awkward. In 1811, let's travel back in time. Jack loves history. I was a history major. We love doing this. Friedrich Krupp built a steel factory in Essen, Germany. In 1867, 50 years later, Tyson starts a steel company also in German. So then, in 1999, by the German law of Merge, don't hire a creative team and just put your names together, Tyson and Krupp became Dyson Krupp and created an industrial conglomerate. Also, you know Germans love really long words. The longer, the longer, the longer, the longer, the better. So this company's headquarters

is in Essen, German. Essen being the German word for food. Delacetessen. And then Rottweil is where their elevator division is located. And Rottweil, of course, is the home of the Rottweiler dog breed. True story. This is fantastic. I keep going. I could do this all day. I could go all day with German trivia. Now, Tyson Kroop just got kicked off the Dax. And the Dax is like the Dachs is like the Dow Jones Industrial average in the U.S. It's literally the 30 most valuable German publicly traded companies. So, Tyson Krupp is basically an ex-daxxer.

Now, a problem for Tusson Krupp, the German economy is probably definitely in a recession right now. Another problem for Tusson Krupp? China, its biggest importer, because, you know, they're building a ridiculous amount of buildings that need elevators, is in a trade war and has coronavirus.

So Tusson Krupp is struggling. It needs cash badly. It's steel, its submarine division, its car parts derision. So much fun. They're all struggling. It's offered up its elevator business to sell for $19 billion, and that deal just got done.

And it's going to take that money and pay off loans, which is kind of depressing, but good progress. And also pay some retired workers who are demanding pensions every month. Also, funny thing Jack and I noticed, they got a new headquarters building in Atlanta, Georgia, in American headquarters. This thing has set itself up with like 18, 420-foot elevator testing shafts. It's because they're, you know, they got an elevator division. But now they've sold off their elevator division, but they're going to keep those test shafts.

Someone may want to talk to someone about that. Somebody's just going to drop an egg and they're going to be like, listen, wait for it. The other wild thing we notice is the Tusson Corp CEO who had this extremely blunt and awkward statement about the deal. With this sale, we are paving the way for Tussonkroop to become successful. You would never hear an American CEO be that blunt. They just admitted in that quote that they're not successful. An American CEO would have said, we're doing this deal because we're trying to get better and we're going to get better at getting better. And so TussonCorp stock jumped 9% on the news, which brings us to Jack.

What's the takeaway for our buddies working hard over? There's a major power imbalance in this sale, like a bad Tinder day. Tusson Corp's elevator biz Snackers was the most eligible bachelor on paper. It's got a steady cash flow. Long history of profits. Great five-year plan. Take this team home to mom and dad already, Jack. He's also got an adorable Rottweiler puppy. Also, little competition. There are only like a few elevator companies out there these days. Check out the elevator you're in. It's probably either made by Otis, which is based in Connecticut, or Tusson Krip, which is based in Rottweiler. Snackers. One of using an elevator right now.

snap a pick. We want to see it. We bet it's Otis. Now, private equity companies, they buy entire firms, typically supported by bank debt. Then they buy from a position of strength, especially when the seller is desperate. And TusonCrip is desperate. Its stock was at a 17-year low.

So this private equity company got a good price. Jack, can you whip up the takeaways for us to start the week? The U.S. stock market suffered its worst weekly loss since 2008. Snackers, the SB 500 is down 13% in just seven trading days, but it's normal for markets to not just always go up forever yeah true our second story chipotle spent a bunch of money with

ticot promotions and allegedly got four billion views might as well throwing a tea on it round up and say four trillion views ticot's got a catch 22 problem i third and final story tuss and croup is selling its profit puppy the elevator yeah we got to work on that pronunciation a private equity company is swooping in to take it private for 19 billion dollars because it was eligible now time for our snack fact of the day this one from aldi gilby in lovely maybe one of the most beautiful place on earth. Stell and Bosch, South Africa. You've been there? Yeah. Easy on the Sauvignon Blanc while you're there, Ollie. Allie is from a vineyard. So, Ollie is a bit of a tech guy, apparently. One byte of data is eight bits of data. Most of the actors like, okay. Yeah,

we weren't blown away by that one either, but then get this. But a half a bite also has a unit of measurement. It's called the nibble. Spelled, N-Y-B-B-B-L-E. Eight bits is a bite. Half of a bit is a nibble. We're going to say it for the fifth time in this crowd. Adorable. Wait, so what's a snack like a hundred bits definitely should be a trillion bits we also got to wish a snack or birthday a happy birthday to amanda jackson a k a.a a snacks vangelist in seattle a snacks evangelist a snacks evangelist according to her fiance john she's got nine enemy with the pronunciations again according to her pronounceer john she's got nine lifts worth of friends and family and her entire team at amazon listening to snacks dale full disclosure john owned shares of amazon and jack own shares of

Amazon. Now, we got a part with HY, HY, Sday. Snackers, have you had your snacks daily? Share it with friends. We'll see you tomorrow. Have you know. You know. 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.