The Best One Yet - 🤸🏿‍♀️ “ClassPass’ work-from-home burpees” — $2T stimulus bill math.Twitter’s ad-pocalypse. Return of the eWorkouts.

Episode Date: March 26, 2020

Stocks popped (again) because the economic rescue bill finally passed the Senate, so we put the $2T spending total into a spreadsheet for you. Twitter and Facebook are enjoying bandwidth-breaking usage, but they’re about to face the ad-pocalypse of 2020. And workout platform ClassPass is launching virtual workouts — 1 year after they first tried the same exact thing and failed.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. It is Thursday, March 26. We are feeling good. The Dow jumped again yesterday. The first back-to-back winning days since February. Feels like a back-to-back Super Bowl.

By the way, I caught Jack wearing the same flannel two days in a row. You know that's a good sign. Okay, Snackers, Nick has been dressing like he's in the office every day, even though he's working from home. But today's rocking his crewneck t-shirt. It's a new thing. I haven't shaved in two weeks. basically look like a hibiscus tree. Jack, what's our first story, by the way? Our first story.

Behold, the Senate hath given us the stimulus bill. Jack, how many zeros in a trillion? Trick question. I think it's a trillion zero. We're looking at the bill for this thing. Huge number by huge number. Jack and I whipped out the old Excel spreadsheets. Crush some of the numbers so you didn't have to. Second story, Jack. Twitter and Facebook are living their best lives right now. To keep the social network up and running, Zuck's gone back to coding again. He's in someone's basement right now. But get this, all that extra social media use that the whole world is doing right now, so true. It actually will hurt profits in this corona con. We're talking adpocalypse 2020. It's coming. Third and final story. Class pass has just announced a new product,

virtual workout classes from your favorite studios. Funny thing we noticed about this new service, they launched the same thing last year and it failed. We're looking at this rare second chance product. It's a resurrection. Now Snackers, before we jump into all that beautiful stuff, you're probably spending a lot of time right now on every technology advice you have at your disposal. I'm rocking my iPhone 8, which feels like an iPhone 4.

I'm using this thing so much right now. I should have splurge the 11th. It also kind of looks like your flannel's like attached to a USB cord. Your fixation on my wardrobe today is a little weird. Now, if you are an iPhone, you're getting the full $800 out of that thing. But Jack and I looked into it. We were a little bit curious.

We had a little bit of downtime today. And we noticed that by Apple's, historic standards, all those Apple products in your home right now, they're kind of cheap. Let's rewind to 1985 before Nick and I were born, right when like Forrest Gump became an Apple shareholder, here it's a great movie. The cost of a printer from Apple was $6,995 MSRP. And they whipped up an early Elisa computer. That thing would have cost you $9,995 in the 80s. Even today, there are products whose price tags dwarf the iPhone that you've been using every second during work from home. Early Christmas jiff, Jack, I'm going to throw this on the stocking list for you.

18-kart rose gold Apple Watch edition, $17,000. But even if you're computing, there's something worth $52,000. The most souped-up version of the Mac Pro Computer is 52K. This thing comes with 4 terabytes of storage, which we have no idea what that means. I'll tell you, your iPhone right now, it's really feeling like a bargain. It's going to be jealous of the two Radiant Provega double-duo graphics processing units that apparently are stuck in this thing. If you've got an iPhone right now, at least it didn't cost as much as a Tesla. 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 snacks 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. We're not 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. For our first story, Jack, look out your wallet. Economic rescue bill of $2 trillion just got passed by the Senate. Snackers, that is the number two, yep, followed by 12 zeros with a dollar symbol at the beginning.

We had to count it out, double-check this thing. It really is 12, trust us. The bill is expected to pass the House and then get signed by the President, aka Becomes Law Copyright School House, Rock. Now, we're going to whip out a spreadsheet, go over all. all the numbers that add up to $2 trillion. They're adorable. But first, let's give some context. How big is this? Snackers, sit down, stand up, then sit back down because $2 trillion is two and a half times

as big as expensive as the stimulus package back in the 08 financial crisis. Wow. The 08 financial crisis was bad and we're spending two and a half times more to restart the economy. So Jack and I got the old whiteboard out. We got out the markers, one eraser. We're actually in two different places. So we did this simultaneously. Since we're paying for this thing? We should probably see a risk. Yeah, let's take a look and make sure this bill didn't overcharges for anything. By the way, we're thinking like CVS receipt that's like 12 pages long and potentially could be a desperation toilet paper move. All right, item number one on the receipt, $350 billion for small businesses.

And small businesses, congratulations. These are grants. No need to pay them back. Unless you layoff workers, then you do need to pay them back and then become loans. So we're trying to incentivize small business not to lay off workers. Okay, that was $350 billion. Then you You've got $500 billion going to big business. Those are straight up loans. You got to repay them. And there's some strings attached to them. There are enough strings attached to turn this thing into a guitar.

You can't buy back your company stock until you've repaid the loan. Basically, big companies, we're bailing you out. So you need to prioritize workers, not profits. Also, $75 billion of that is going to airlines and hotels. They can continue to employ people and you still get the chocolates on the beds because that's adorable and fantastic. All right. Those are basically the appetizers.

let's get to the main course of this bill, $150 billion for state and local governments. And that's critical because all these states, they typically charge sales tax. They're not getting any sales tax revenues right now. And if they're charging income tax, they're going to get less income tax revenue too, but they still have fundamental services they need to pay for. All right, you got $350 billion, $500 billion, $150 billion. Now we've got $100 billion straight up for hospitals and health care systems. They're kind of the front line of this war against COVID-19, so I'm glad we're hooking them up.

with some extra money. Okay, we've still got a lot of big numbers left, and it all gets summed up by $900 billion, which is the rest of the money. That's a big, hefty chunk. The majority of it is checks going directly to you and me. In fact, every American making up to $99,000 a year is going to get a check. We're talking Nana style sent home to you. By the way, kind of wish this were adjusted for everyone living in San Francisco, New York. Just going to throw that out. True, because 99,000 in San Francisco and New York is like 20,000 somewhere else. Yes, $99,000 basically gets you a large pizza in Manhattan. All right, so the check is going to be $1,200 per American making less than $99,000,

plus $500 for each kid that you've got in your house. And by the way, the rest is kind of going toward increased unemployment benefits. Right. If you get laid off as a result of COVID-19, you will get your full income up to $600 a week in unemployment benefits for four month long. Oh, and this includes gig workers who are typically ineligible for this kind of stuff because they're considered independent contractors. Right. Uber and Lyft drivers technically aren't employed and therefore can't get unemployment benefits usually.

Snackers, we hope you had a pencil handy. Added that all up. It brings us to $2 trillion. The number two followed by $12.0. So, Jack, what's the takeaway for our buddies who are a $2 trillion bailout? This stimulus bill fills the giant hole of spending caused by the corona shutdown partly. Snackers, you're probably wondering how much is $2 trillion really in the economy? It's 10% of total spending that happens every year in the United States. AKA it's 10% of America's GDP, gross domestic product. If the economic shutdown that's needed to stop the spread of the coronavirus shrinks the economy by 10%, this package would offset that.

The truth is, though, Nick, we don't know how badly the economy will be hit by this corona economy shutdown. It could potentially be less than 10% of the economy, or it could be more. But you can think of this $2 trillion as a giant epidemic insurance. that we're all cashing in on. For our second story, Twitter and Facebook are in a very awkward situation. People need social media more than ever. So true.

But advertisers have never needed it less. Jack, maybe my corsets on a little bit too tight, but I think this is a classic Dickensian situation. It's the best of times and it's the worst at times for social media. Wow. Does Charles Dickens have a noun DeKensian? This is good. I didn't want to go to 19th century English literature,

but sometimes you've got to do what you've got to do on this podcast. podcast, Jack. Snackers, with the whole world wearing sweatpants and working from home, the internet has been working overtime. And we're not just talking video binging. We're talking scrolling, searching, messaging, pretty much every verb I-N-G you can think of. Twitter's daily use is up 23% since last year. Facebook's multiple messaging apps have basically skyrocketed 50% we found out. People are even saying, F it, I'm going to buy a Facebook portal and let Zuck come into my living room so I can like talk to my grandparents and video. Nothing better than a catch-up with the in-laws and Zucks involved. You got to love that. But Snackers, there is one very big but we found. None of this

is any good for Facebook or Twitter if it doesn't boost ad revenue. Growing your user base before monetizing is like a really cute thing to do if you're a startup in San Francisco and you're meeting your first angel investors. Yeah, it doesn't really fly though for a $450 billion public company like Facebook. Yeah. Facebook investors, they want to see profits right now. Not just more humans addictively scrolling Instagram like what's currently happening. Twitter just announced it expects a loss this quarter, which would break its nine quarter streak of profits. Again, usage for Twitter is up 23%.

But ad revenue, which is how Twitter makes money, is expected to drop by 20% this quarter. And the problem that Jack and I identified here is ad apocalypse 2020. We noticed it's happening now. Businesses canceling plan spending on advertising. Think about it, Snackers. If you're an essential business, you don't need to advertise these days because people are literally loading up on toilet paper, Purell, and beans. Yeah, seriously, you don't need toilet paper ads right now because people are already buying toilet paper no matter what. It would be a waste. And if you're a non-essential business, you're not advertising right now, because you've been shut down. Yeah, people literally can't buy your product if you put an ad in the paper because you're non-essential. Now, we're expecting Google suffering through like the same issue right now as well. Higher use, which is good, but lower ad sales, which is bad. So Jack, what is the takeover? for our buddies over in social media with Twitter and Facebook. The corona economy features awkward and surprising gains and losses. Snackers, we rounded out a really nice list of other places we're seeing the same thing happening. Look at Target. People are spend hoarding at Target stores,

but only on low profit things like essentials and cans of Campbell soup. Or look at PayPal, which owns Venmo. People want to pay electronically more than ever, but they're spending less money overall in this economy. Look at local news. People need that more than ever to figure out how to deal with these like stay-at-home orders. So true. But local businesses are cutting back advertising and local papers because of the Corona County. The only thing unambiguously right now

that's suffering? Yes. Cruises are unambiguously having a bad time. No one is taking cruises. For our third and final story, we've got our unicorn of the day. Class Pass is launching a virtual workout again. This is the rare and elusive

resurrected product. You don't see this a lot. By the way, Jack and I had been looking into this. Barry's Bootcamp is doing free live ones on Instagram TV, like while everyone's quarantined these days. I just confirmed it checked out Barry's Instagram page, and some guy named Q had me doing burpees like two minutes later. Or you could just stay at home, not turn on Barry's and just have your partner yell at you for 45 minutes. Basically does the same thing. That's the essential recipe of a Barry's boot camp class. Now, Snackers, if you're not familiar with Class Pass, this company is both a gift and a poison for boutique fitness studios in your neighborhood.

It's a platform that connects the able-bodied Lulu Lemon-insconsed people in this world with available boutique fitness classes in your city. All right, so here's the way Jack and I look at this. On the one hand, Class Pass is pretty helpful for studios. If your yoga studio, like the pad in San Francisco, which Nick and I both love, Namaste. People can discover you on Class Pass. Right. It helps get your local Pilates yoga hybrid core classes on the map.

But on the other hand, class pass can be painful for studios like the Pad in San Francisco because it tends to command. monetize what studios do. It forces all the studios to compete on price, and then there's no customer loyalty as you bounce workout to work out to studio to studio. Right. Workouters will basically just scroll through the class pass and pick the one that's the lowest price, for example. So basically, ClassPass ends up becoming like the DoorDash at Boutique Fitness. And it's become a unicorn with a $1 billion valuation back in January. Just like DoorDash, Class Pass is taking a cut of your transaction. Here's the news. ClassPass just launched ClassPass live so you can stream your favorite local fitness class. right in your home during work from home during quarantine. So Jack and I naturally slapped on the spandex and decided to jump in snacks out of this one

because it screams at you that this is available as soon as you open the Class Pass app. We checked out a 5.30 p.m. class that went down yesterday, Wednesday, March 25th, which is called Con Body. It's a class instructed by an ex-con. Yeah, ex-con, former prison guy, best tagline ever for a fitness class. Con Body, do the time.

He's basically prison Mike. But what happens is you sign up for the class using ClassPass, and then they stream the event live on Facebook, live, Twitter, YouTube with a URL that you only got through ClassPass. In case you're wondering about the business model, Class Pass is not charging commissions, yet they said they'll institute those on June 1st when apparently they'll have less sympathy.

Here's the funny thing, though. Technically, this is a relaunch of Class Pass lot. Snackers, Jack and I thought this was fascinating. This is a rare second chance. product. They tried this out back in 2018, but customers were missing the in studio zen that you get from the pad in San Francisco. Literally, they had launched the same exact thing, but people were like, you know, I'm not getting the same eucalyptus smell. I'm not getting the pre-class banter I get from real-life yoga. You're not getting the hands-on adjustments, which everyone, I'm assuming,

intentionally misdoes the downward dog so that they can get a hands-on adjustment. Snackers, Jack loves hands-on adjustment so much. I got to come over and, like, move his mic for him and give him a tap on the right shoulder before we hit the pod. So ClassPass shut this down basically because people couldn't get hands-on adjustments from ClassPass live. So Jack, what's the takeaway for our buddies over ClassPass? ClassPass has an opportunity to achieve the ultimate app goal. Get your customers to have a daily habit. Snackers, ClassPass has signed up 30,000 studio partners, yet 90% of them are shut down right now during the quarantine. 500 Brave studios, though, have signed up for Class Pass Live. Nice. So you can get Pure Bar, physique 57, and Yoga Works.

I feel you. Live in your living room during this quarantine. Here's the key part, though. If ClassPass Live can build daily habits right now, that's huge long-term win for Class Pass in two potential ways. First, Class Pass live users could eventually switch to the core product, which is in real-life studio work, after the quarantine ends. Or people who are just trying out Class Pass Live right now may end up deciding to keep doing it

after the quarantine a couple days a week. Class Pass's quarantine goal? get users to have a daily habit. Jack, and you'll whip up the takeaways for us over that. The Senate just passed a $2 trillion spending bill to help rescue the corona economy. The goal is to fill the huge economic hole from this pandemic shutdown.

Second story, people are using social media more than ever, which is good for Twitter and Facebook. But adpocalypse means that businesses are come back on advertising, which is actually how Twitter and Facebook make all their money. Our third and final story, Class Pass Live is streaming classes from 90 boutique fitness studio, go straight to your living room. They have got one quarantine goal for this app. Earn your daily fitness habit. Now, time for our snack fact of the day. This one tweeted in by Vince Keggley from New

New Bronfels, Texas. First one from there. New Bronfels, Texas, a place I want to be. Don't call it Old Bronfell, Texas. Not nearly as good a place. The average American commute before this corona economy happened, I assume. True. Was 27.1 minutes in 2018. Now it's like 36, seconds from your bedroom to your couch. Exactly. But in case you're wondering, that's why we made Snacks Daily under 20 minutes long. So you could listen to one episode, then call your mom, and still have time to listen to your favorite song before getting to work. Or you get aggressive with this thing like our buddy Vince does and you'll listen to two episodes at 1.5 speed. Snackers, we got your back on this. Love today's Snacks Daily. Snackers. If you got a snack fact,

hit us up at Robin & Snacks on Instagram or Twitter. We'll mention you at the end of the pot. snack back, send in your name, get us your hometown. We want to make this happen. 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 or any of its subsidiaries or affiliates. The podcast is for informational purposes only, 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 a research report and is not intended to serve as the basis of any investment decision.

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