The Best One Yet - “Codename: CIA IPO” — Palantir’s ironic leak. Luminar’s laser stock. Uber/Lyft’s politics.

Episode Date: August 25, 2020

The secretive tech icon Palantir’s IPO paperwork just un-secretly leaked. Luminar is yet another electric car startup going public through SPAC — except this one shoots laser beams and is run by a 25-year-old CEO. And we’re looking at how the shutdown of Uber and Lyft in California last week didn’t happen, but revealed their unique in-app policy power about the new battle, Prop 22.$UBER $LYFTWant a shoutout on the pod? We got the form for Snackers to fill out right here: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. It is Tuesday, August 25th. Nick, I assume, stocks hit a record high yesterday. Jack, you're right. Just double checking this thing. You're correct. Yep, they hit record highs. Okay, not sure why. Tough to tell why these days, but good news nonetheless. And yet, we made this our best snacks daily yet. TBO Y, Jack, what do we got today? For our first story, Palantir is an intelligence company that profits on corporate and government secrets. Funny thing about Palantir, all their IPO paperwork just leaked, so we all became PFW. That's right. We are all people familiar with the matter of Palantir's IP. Second story, Jack, what do we got? A company that shoots laser beams is run by a 25-year-old CEO and is about to go

public on the New York Stock Exchange. Sounds like a video game. Luminar is the kind of company that stands out in a summer of the electric car SPAC. Not to be confused with Illuminati. No. For our third and final story, remember last week when Uber and Lyft warned all their California users that they were shutting down on Thursday. We had our calendars marked and then a judge stopped that from happening last minute. And this story reveals the policy power of a popular app's homepage.

But before we jump into all that good stuff, Snackers in the Bay Area, we feel you. I'm stuck in my 800 square feet with my wife and river with nowhere to go because it's so smoky outside. Jack, one second, I've got to get off hold with Rhonda from Delta because I just had to reschedule my flight back from the East Coast

to San Francisco. We already had a pandemic, an economic crisis, and a reckoning for social justice. Feels kind of cruel to add in a climate change fueled 1.3 million acres of forest burned in just the last 11 days. Snackers, we're talking about the wildfires in Northern California where there is currently the second and third biggest wildfires in the history of California burning as we speak. Now, Jack and I couldn't calculate the lifts on this thing, but we do have an early snack fact for you're guarding the size. Those 1.3 million acres of burned forest is already a greater size than the entire state of Rhode Island. Jack and I are looking at the map here, we got entire communities in flames from like Santa Cruz up to Napa. You know those giant trees that you can like park

your car under that like create a little, yeah, tunnel thing? There's like one in every Disney movie. They're incredible. They're like 2,000 years old and there are casualties of these forest fires. Not only that, you can smell what's going on in the air through your N95 mask. That's how thick the smoke has gotten. The air quality is atrocious in Northern California. It may not feel like T-Boy Tuesday today for all the Bay Area-Based Snackers right now. But Bay Area-Based Snackers, we're thinking of you. And making the snacks the best one yet, 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 are 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, LLC, member FINRA slash SIPC. For our first story, Palantir, the privatized CIA type tech company is going public. But think less James Bond and more Dwayne Bond. Picture a kind of guy with like a master's in science data from Cal Berkeley.

Yeah, the guys of Palantir have pocketperry. protectors, let's put it that one. So, Jack, can you tell me, like, what even is a Palantir? A Palantir is actually the fictional orb that Pippin stole from Gandalf while Gandalf was sleeping, which let Soron look into the whole Fellowship's plans to, like, I'm going to stop you right there. That is a great name for a company that spies on people. Let's run with that. This is a hilariously named company. Now, the reason it's so ironic that Palantir's documents leaked, it's in the business of keeping secrets. Snackers, picture like a CIA headquarters, but with free kombucha on tap instead of nothing. Now, Palantir is a private, basically consulting company that

provides intelligence, and they have two types of customers, corporate clients, and government clients. So the first one is your corporate client like your Morgan Stanley, a bank, and they need to track illegal money transfers that may come from a drug dealer. They call in the software from Palantir. They'll log into the software at Palantir and discover a web of payments. It started with one cartel in this country, moved through like a skeleton shell company, and ended up in an unmarked PO box and Poughkeepsie, New York. The drug money always does. Now, the second type of client is your classic throwback government client, not your corporate. Pallantir has been working with the Department of Homeland Security for a while to make sure that they can execute like better border raids.

Case and point, Jack and I noticed they got themselves a $49 million software contract to track illegal immigrants before they're deported. Let's just say Pallentere isn't afraid to get their hands dirty. Let's just say when you work at Pallentier, you're not putting all of your updates on the LinkedIn profile. If you work at Pallentier, you're not putting all of your updates on the LinkedIn profile. Palantir, you don't brag about working at Palantir. No, you don't. Now, Snackers, Palantir's IPO paperwork happened to awkwardly leak to TechCrunch just last week, so we got to jump in Snack style. So what that means is some reporter at TechCrunch got like text messages with screenshots of the S1 document, which has not gone public. So Jack and I are jumping in here, and there were two

key numbers that shocked us and basically told the whole story with Palantir. The first highlight is average revenue per customer. Like when Palantir snags a new client, and signs a contract, the average client is paying $5.6 million a year for access to Palantir's technology. That is a huge, huge number for average revenue per customer. Totally different business, but let's look at Facebook, which makes just $28 bucks per customer per year. Shockingly, Palantir is like the only company Zuckerberg would never suck. But that means that Palantir is making 200,000 times more money per each customer than Facebook is. All right. That sounds really, really good? But on the flip side of things, you see that Palantir is a 19-year-old company that can trace

the origins of like dirty money, but they can't find their own profits. No, apparently Palantir lost half a billion dollars last year, and they lost half a billion dollars the year before last year. This 19-year-old company hasn't made an annual profit since it was two years old back in 2003. Almost feels like they're not trying to find a profit. So, Jack, what's the takeaway for our buddies over at Palantir? If you know the customers, then you know the company. Snackers, let's look Closlier at the revenue breakdown of Pallantier, because that reveals who this company really is. Let's look more closelyer because $5.6 million per customer sounds big, so hopefully they got a whole bunch of customers. This would be a great company. Nope. Jack, they've only got

125 customers. And three of their top customers make up a third of their revenues. Now, that's a big risk that Wall Street's not going to be pumped about, because if those three ditch, then they lose 33% of their revenue. Jack, let's talk a little more about these customers. Are they building out some strong relationships with fast-growing sectors? Absolutely not. Most of their revenues come from the government. We're talking like DHS, CIA, NSA, the ATF, yada, yada. You throw a few acronyms in there? They're probably clients of Palantir. All right, but Nick, does this company have a bullpen of wheeling and deal and salespeople who are always be closing you? You mean like our buddy Timmy? Nope. It's the same old customers. 92% of those government customers they have were already customers. They're just repeat

customers. When you look at Palantir's customers, you see that it's actually a stagnating business, not that much growth, and pretty much government contract dependent. And once you understand Palantir's customers, then you really understand Palantir. For our second story, LIDAR company, Luminar, just picked the best ticker symbol we've ever seen for a new stock. L-A-Z. R. Lasers. I just want some freaking sharks with some freaking lasers attached to their heads. It's the self-driving car company just working on the eyes. That's the only thing they focus on the eyeballs. Now, Snackers, context for this story. This is the summer of SPACs. Yep. Hoking up with electric car companies. Last summer was Tiva Sandals. This summer, it's that financial stuff. And the hottest car companies

going public via SPACs are the ones with no revenue or no product. We've only old switcher on us. They're not selling anything, so they want you to buy them so they can sell something. So Luminar just announced yesterday, it is going public. It's going to have a publicly traded stock, and it's going to get there via a special purpose acquisition company, a K.A. A.K.A. a SPAC, we've talked about them on this podcast before. That's when a company that exists only on paper has IPOed and then buys Luminar for like $3.4 billion in this case. It's an unconventional way to go public, which is unsurprising because Luminar has an unconventional CEO.

25-year-old Austin Russell is the guy behind this $3.4 billion, just the eyeball, self-driving technology company. Funny story about Austin Russell. He was a freshman at Stanford University until he dropped out because a billionaire investor named Peter Thiel said, you should become a Teal fellow. I'll pay you $100,000 to stop going to Stanford and run this company instead. And then Austin did exactly what Peter Thiel basically told him to do, and now he's going to probably be featured on the quarterly new

letter. Austin Russell is all about LIDAR sensors. LIDAR. Now, to understand how LIDAR works, imagine closing your eyes and reaching across to like your grandfather, feeling his face with your fingertips so that you can kind of see that father, even though your eyes are closed. Feels like the kind of thing the grandfather would be doing to the grandson, but that's like a whole different story. It's also basically the plot of Matrix 3 because that's what Neo does the entire movie. Now, Lidar does the same thing. But it's a lot of the same thing. But Instead of touching the city and the sidewalk and the cars in front of you with its fingertips,

it touches the car in front of you with lasers. It shoots out harmless laser beams from the car and ends up mapping out a 3D landscape that Morpheus would approve of. Now, before we go on, it's important to understand the three things that are preventing self-driving cars from actually being on the streets and being a part of our society. The first preventative issue we got here is the regulation situation. There is still no self-driving cars. Act in the United States?

Not yet. So we're dealing with this patchwork of state and city laws that can't seem to stop bumping into each other. But the greatest innovation in self-driving car history is coming out of Scottsdale, Arizona, where they've got a dry heat and the friendliest jurisdiction. According to Scott from Scottsdale, a great snacker, it's like the Jetsons down there in Scottsdale. The second thing preventing self-driving cars from going mainstream right now is just straight-up safety.

And to make self-driving cars safe and not bump into a bunch of. bicyclist. That's key. Not hit your dog when it's crossing the street. Also key. You need a self-driving car with a good brain and a brain is made out of software. So that's why you got alphabets Waymo, you got Tesla, you got Uber, all of them are focused on the brain. Now the third thing preventing self-driving from going mainstream is cost. And that is what Luminar is focused on. That's because each car is blinked out with hardware to make the car see a la Jack touching his grandfather's face. Now, a set of LIDAR sensors, which are effectively eyeballs on a self-driving car, that's going to cost you tens of thousands of dollars. And Nick, nobody's going to buy a $70,000 Ford or Honda Center.

Excuse me, Exhibit. I'd like to upgrade my Civic by throwing LIDAR on this thing. Now, Luminar is working on the cost part, and they have one investor who has experience taking an expensive thing and figuring out a way to manufacture it on scale for a lower cost. Bring in part-time Shark Tank Shark Nick Woodman, also CEO of GoPro, who has experienced bringing down the cost to some extreme things. Okay, so that's helpful. They also have Volvo as an investor at Luminar, which is currently hyping up its own self-driving feature for highways, which it says will come in 2022. So, Jack, what's the takeaway for our buddies over at Luminar?

Who is going to get the profits in the self-driving industry? Is it the cars, the brains, or the eyeball? Snackers, to get a product into your hands. there's an entire supply chain that has to get involved. For iPhone, there's a whole bunch of companies involved, but we all know that Apple is taking most of the profit in the sale of an iPhone. For Android, there are also a bunch of companies involved,

but Alphabet Software is who's taken all the profit. Alphabet's taken the profits of an Android phone, not Samsung, the company that's actually manufacturing. So Luminar thinks their laser power to car eyeballs are actually the secret sauce when it comes to self-driving cars. They have a trademark look. at Luminar, which they hope becomes recognizable as like the best dang LIDAR in the industry. And if they can leverage that quality, then they can demand an extra $5,000 maybe from the car

companies to use their LIDAR tech. And if they can do that, it won't be Honda making the profits off of its civic self-driving car. No, no, no. It'll be Luminar who's charging huge prices for the crucial LIDAR tech. And everyone can touch their grandfather's eyeballs. For our third and final story, Uber and Lyft were supposed to be canceled on Thursday in California, but then the canceling got canceled and they didn't get canceled.

And now Californians have to brace for unprecedented corporate lobby. This is going to get freaky. And that's why we wanted to close the loop and round out the story. Snackers, remember rule AB5. The rule that you have to treat gig workers like you'd like to be treated. Basically the golden rule. This is the kind of thing that was draft. by like kindergartners.

One year after being signed into a law in California, Uber and Lyft had exhausted their legal fees. Yep. And they had to finally comply. So last Thursday, Uber and Lyft messaged all California users in their home state to say that they were shutting down for like three months until the election. They hated AB5 so much. They refused to comply and would rather shut down. Boom. Wednesday night, a judge stands up probably hit something on a table and says, I object.

That's right. Peel's Court granted the Ridehaler's request for intervention and delayed the implementation of AB5 until after the election on November 3rd. So the PR teams over at Uber and Lyft had a late evening, they updated their blogs and said, we're back, baby. They're like, never mind. Yep. Ride sure operations will not be suspended in California. So Snackers, we updated you that this could happen with all about AB5. But the thing that's key here is Proposition 22, aka Prop 22. Prop 22. Uber, Lyft, DoorDash, Postmates, and Instacart. They are all fighting hard for their own little referendum in the election, which is called Prop 22. They want you to vote yes on Prop 22. And what Prop 22 does is it takes AB5, which was meant to like regulate gig workers. And it carves out a special section for app-based transportation and delivery drivers. It's like AB5 is good. Except if those AB5 gig workers.

work for DoorDash, Uber, Postmates, Instacard, or Lift. And what this new Proposition 22 from the teams over at all those gig apps is saying is, don't treat our workers and drivers like employees, but don't treat them like independent contractors either. It's a Goldilocks compromise, which will actually be a lot less costly for Uber and Lyft. Yes. And probably keep prices of Uber and Lyft rides lower. So Uber and Lyft are saying these drivers won't get minimum wage or overtime or unemployment

or workers' comp when it comes to Prop 22. But they're not going to get nothing either. They will get 120% of minimum wage guaranteed as long as there is a passenger or groceries or pad tie in the car. So if you're an Uber or Lyft driver or a DoorDash or Postmates deliver, you're looking at this and it's kind of just good news for you either way. One's better news. One's better okay news. Right. Better or er news. Oh, by the way, Prop 22 also says drivers get some subsidies

to pay for their health care insurance. So Jack, what's the takeaway for our buddies over at Uber Lift and everything gig? Prop 22 is a David versus Goliath situation, and Goliath has a secret weapon called Digital Billboard. Snackers, Californians are preparing for an onslaught of vote yes on Prop 22 ads hitting everywhere ASAP. That's because UberLift DoorDash Instacart and Postmates

team up. Have put together $110 million to win this campaign. The power rangers. On the other side, you got the... Vote no on Prop 22, which doesn't have nearly as much support. Vote yes on Prop 22 has a ton of corporate money. Vote no on Prop 22 has labor unions and a couple of political activists. But what Jack and I find so fascinating about this story and the grand conclusion of the drama is the secret weapon that Vote Yes has. If you've downloaded Uber, Lyft, or any of those apps,

and you live in California, get ready for some push notifications that are like, vote yes on Prop 22, or else you better get a car because this won't be here anymore. And when you open your Lyft app and get ready for some reminders that pop up that say, this will go away unless you vote yes on Prop 22. David is showing up in a Hyundai Sonata in three minutes and vote yes on Prop 22. And when you get an email back from DoorDash customer service, look at the bottom of said email and you may notice a reminder to vote yes on Prop 22. Were you satisfied with this resolution, vote yes on Prop 22.

The key here, Snackers, these apps are their own. digital billboards, and that is a huge policy advantage. Jack, can you whip up the takeaways force over there? Palantir is the 19-year-old intelligence company that hasn't figured out profits. Its customers tell you everything about the company. Government, secret, not growing. Second story, Luminar is a self-driving car company that's not making any cars. They're just making the laser eyes, which they think will take profits out of the whole value chain. For our third and final story, Uber and Lyft aren't getting canceled in California, but the drama isn't over. The apps are about to start reminding California to vote yes on Prop 22 because they have the

power of the app billboard. Vote yes on Prop 22. Now, time for our snack fact of the day. This one tweeted in by Fano Manon from a lovely DeRodon, India, which is a small town in the Indian Himalayas. I thought Vermont had altitude, Nick. We've never had a snack fact sent in from this high above sea level. Now, the countries with the world's highest coffee consumption on Earth, Nick, are all in Scandinavia. Yeah, and it turns out out of all the Scandinavian countries, Finland is leading with 26 pounds per person consumed of coffee a year. Now, interesting that Finland leads, that was a surprise. Progressive. But 26 pounds per person per year, what does that mean?

We had to do the calculation. We couldn't do lifts. In this case, it turns out to six cups per human per day. Six cups of coffee per day. I mean, what is it like AP, U.S. history finals every day? Well, I think it's like daylight there, 23 hours of the day, like half the year. That's twice as much coffee as Brazil. That's triple as much coffee as America.

The takeaway, no wonder why oat milk was invented in Sweden. Now we understand it. You got all that coffee. You're going to need some oatmeal. And you got a lot of IKEA furniture to assemble. So before we go, Snackers, Andrew and I lean, and happy six-year anniversary down in Miami, Florida. Svana and Rob, happy getting engaged from Braintree Mass.

Jerry and Anna from Mounted View, California, thanks for bringing Chloe Elizabeth into the world over the weekend. And Eric and Andy just got engaged on a yacht in the Hudson River. Incredible, they're both keepers. By the way, happy birthday to Jonathan Choy in Los Angeles, California. And Yoshinari Yashikawa, out of her in Japan. And Yosef Haber turned in 21 and Bates Shamesh, Israel. And Manzi Ayur in Mumbai, India.

And Tyler Reynolds turned in 22. in Santa Cruz, California. Kevin May in Austin, Texas. Emmanuel turned in 26 in Cleveland, Ohio, Rome on the lake. Jake and Jay, both turned in 30 down in South Carolina. Ethan Grabber in Zurich, Switzerland. And happy birthday to Jose in Brooklyn and Verrage in Sacramento. And Connor in Arlington, Virginia.

And Monica Gotha Raker in Mumbai, India. And finally, Robin Hoodie Ian Porter in lovely Denver, Colorado. Snackers, that was a great time. If you have anybody's not snacking yet, ask them H-Y-H-H-Y-H-Y-Y. You guys look fantastic. Have you had your snacks daily? That's the question. I already can't wait for tomorrow's tea boy. Spoiler. If 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, 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.