The Best One Yet - 👟 “De-Yeezying Round 2” — Adidas’ Kanye breakup. Weber Grills’ BBQ deal. YouTube’s short Shorts.

Episode Date: October 26, 2022

After 9 years of marriage, Adidas is breaking up with Kanye — and that’ll cost it $250M in unsold sandals. Weber Grills surged 30% because they may get acquired by that annoying guy at your backyard BBQ. And all that Google wanted to talk about in its latest earnings was short Shorts.$ADDYY $WEBR $HA $AMZN $GOOGFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn 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. It's Wednesday, October 26. And today's pod is the best one yet. It's Wednesday. The Wheel Wednesday. It's the T-Boy Halloween costume competition. It continues.

Are you going to go as a headless Bitcoin holder? Or are you going to go as a Peloton mummy? We want your costume ideas today because voting for the best one begins tomorrow. Hit us up at T-Boy pod on Instagram or on Twitter. Business theme. Halloween costume ideas. Hit us up. Business Jack, what's our first story for the teapy? Weber Grill stock just searched 30% because it may get acquired. By that annoying guy at your fall barbecue. Our second story is Adidas. It's officially ended the nine-year relationship with Kanye

West. And that's going to cost Adidas $250 million in unsold sandals. But our third and final story is Google's alphabet. They just kicked off an enormous week for tech earnings. But all that Google wants to talk about are short shorts. Who wears short shorts? Under Bichai wear short shorts. That's just wearing short shorts. But Yetis, before we hit that fantastic mix. Just the perfect mix for a wacky Wednesday. Where are we going with here? Weird Wednesday? Oh, the wheel Wednesday. The wheel Wednesday. I like where we're going with this. Wilder can't pronounce is ours. Let's just round it up. Let's go with it. Yeties, the World Series begins this week. Philadelphia, Phillies, versus the Houston Astros. Who

you got? The fall classic. But this isn't just baseballs and bats on the line. No, uh, our entire economy hangs in the balance. That's right, because of Philadelphia. Besties, the Phillies performance on the field could crush your portfolio. Because the three times that Philadelphia has won a World Series this entry? Yeah, Jack. We've entered a recession the same year. Get this, Yet these. Over the past 100 years, if a Philly team wins, we all lose. And we know this thanks to a shout out from Yeti Spencer Waries of Virginia, who pointed it out. If you don't believe us, Jack, Let's go to the whiteboard over here. The last time Phillies won the World Series was in 2008.

Gray went for Philadelphia. Great recession and financial crisis for everyone else. All right, let's go back to 1980. That's when Philadelphia beat the Kansas City Royals. And then the United States had two recessions in a three-year period. I'm rewined into 1929 when Philadelphia Athletics at the time beat the Chicago Cubs. And, Jack, that's when the Great Depression happens. When Philly wins.

We get recessions and depressions. Quick update, Jack. When Philly wins, we get great recessions and great depressions. We don't just get a stock market slump. No, we got like the grand slam of economic collapses thanks to Philly. Now, Nick and I are not eager to root for the Astros, okay? But, Jack, if Bryce Harper hits a dinger, our economy is in for a stinger. The Philly fanatic must be short in stocks.

Yeah, the Bat Boys over in Rittenhouse Square buying bonds, Jack? Nick and I are not eager to root for the Astros. But we wouldn't mind no hitter for Mr. Verlander. Our financial future may depend on it. Jack, let's hear our three stories. 15 years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm.

Jack Nick Tis. 50% that's a fat tip. T-boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more, so just start the show. Start the show. For our first story, Weber Grills, their stock just searched 30% because someone finally wants to buy it. And that someone is the annoying dude at your backyard barbecue who won't leave the grillmaster alone.

I don't know that guy, and it may be your buddy Timmy. In the meantime, Weber Grills, honestly, kind of the escalate of the barbecue, the old Cadillac. They like the size of an SUV. And they're literally gas gustlers. Yeah, they got a plush interior, though, which makes them comfy. We have a huge one at home. We call it Mordor. It doesn't cook the meat.

It kills the meat. Now, yet he's the last time Jack and I covered Weber Grills. You were tossing another shrimp on the Barbie. It was back in mid-July when Weber Grill's CEO suddenly quit. To put this simply, he quit because he overcooked the company. There was no pink in those earnings reports. No, the sales at Weber Grills. They rose 18% in 2020.

They rose 30% in 2021. Things were looking great. But ever since then, like everything you put on a grill, it started shrinking. Weber Grill sales shrank like a broiled eggplant. Sales fell by 22% over the summer when you should have been crushing kebabs and buying more grills. You can blame the pivot Americans made

from being consumers of things to consumers of experiences. Yeah, we've bought enough things for our house. It's time to get away from the house. Seriously, put on some clothes. Which led to the shocking news. Yesterday, Weber stock searched 30% on an acquisition offer.

So we were wondering, who wants to acquire Weber. We were curious, what could be the company that wants to buy Weber? Like, Jack, maybe it's Home Depot. If Weber Grills were only sold at Home Depot, then Home Depot could steal customers from Lowe's. Or Jack and I were thinking, maybe it's not Home Depot, maybe it's not Lowe's. Maybe Amazon would want to acquire Weber grills. Amazon acquired I robot.

Maybe they want a robot grill. An internet of things for your sirloins. Weber did claim in their IPO paperwork disrupt 44 times. They did. They were acting like a tech company, Brex. dragging about their grilling app. Jack and I were like, what are you doing, Weber? So Amazon, yeah, Amazon could buy Weber.

Hey, Alexa, I'll take mine medium rare. But it turns out it's neither Home Depot nor Amazon that's trying to acquire Weber. When Jack and I read the press release, we knew immediately what type of company wants to acquire Weber grills. We knew right away it was a private equity firm. Because when private equity wants to buy a company, the opening line of that press release is pretty insulting. Yeah, the current position of Weber is unsustainable. That's what the P.E. firm said that's trying to acquire Weber. That one kind of hurts.

It's like, Weber, you're doing a terrible job. We're going to come in and take off. So, Jack, what's the takeaway for our buddies over at Weber? Private equity is the annoying guy giving unsolicited advice at the barbecue. All right, Yettys. You know when you're in the backyard? You're just trying to grill up that filet and some guy comes up and he's like micromanaging you around the meat? Are you sure you marinated that long enough?

Is that thing USDA Prime or what? Let me know if you need to hand. I'm happy to take over the flipping to make sure the burgers don't fall apart. Okay, that guy, that guy. That guy at your barbecue party, that is what private equity is to the financial services industry. Private equity identifies operational mistakes by a company and then makes a plan to improve the company. Next thing you know, they got the tongs out and they're flipping that thing while you're pushed aside. That's exactly what BDT Capital Partners is trying to do with Weber by acquiring it.

BDT Capital Partners. Weber hasn't even said yet if it wants to be acquired. And yet BDT Capital has already announced its intentions. Their strategy is to cut cost at Weber but keep the price the same so they can grill up more profits. Boom. Then in five to seven years, they're going to IPO Weber again, but for a higher price and make a nice buck. That's the same PE playbook they used for SeaWorld, Hilton Hotels, and Canada Goose. The private equity firm, they takeover the grilling duties, they host a better party than you, and then they get all the credit. C.E. takeovers, they don't always work.

Yeah. But you can smell them coming a mile away. Smells like that dude. They bring their own tongs. For our second story, Adidas just ended its nine-year marriage with Yeezy. Kanye was always a financial risk. Now there's a number for the financial damage. Okay, first of all, Jack and I should sprinkle on a little TMZ context on this thing.

Kanye's relationship with Adidas lasted way longer than his relationship to Kim Kardashian. That pair has been developing footwear since 2013. The shoe collaboration between Adidas and Kanye was valued at $3 billion in 2020 by Bank of America. Sit down and stand up and sit back down again. Just Kanye's shoes with Adidas were worth $3 billion. That values the Yeezy shoe line at six times more valuable than Allbirds is today. And now that $3 billion shoe line is over. Adidas announced yesterday, it does not tolerate antisemitism or other forms of hate speech.

And Adidas called Kanye's blatant anti-Semitism dangerous and unacceptable. So first it was Twitter and Instagram who took action against Kanye after his anti-Semitic reign. And then CAA, the talent agency, dropped Kanye after those rants. One week later, this week, Adidas is ending their relationship with Kanye by ending the Yeezy line. And hours after Adidas' move, the Gap dropped Gap Yeezy Hoodies from their Gap website. And now we have to turn to another awkward part of this story.

This strange story then got even stranger. Because this whole anti-Semitic episode with Kanye brought out an ugly ghost out of Adidas's closet. Let's go back to Adi Dostler, the founder of the German company, Adidas. He wasn't just a German. He was also a member of the Nazi party. It turns out, Adidas's founder joined the Nazis in 1933 the same year that Hitler took over. And then he benefited from that from a business perspective because the Hitler regime boosted Adidas shoes to promote the Aryan race during the Olympics. So this entire Kanye situation has put the spotlight back on Adidas's founder and his ugly past. So Adidas had an extra responsibility to speak out against Kanye.

Especially because Kanye's comments against Jewish people recently are already fueling anti-Semitism today. So yesterday, Adidas did it by ending the relationship. Adidas did something. So, Jack, what's the takeaway for our buddies over at Adidas? You live by the influencer, you die by the influencer. Okay, Yetis, funny thing Jack and I have noticed about influencers? They became an official Wall Street financial risk in the year 2020. In the year 2020, we first noticed influencers listed in the risk section of a company's IPO,

paperwork. Well, the way we see it, Kanye is proven to be the ultimate example of that risk that we were warned about in 2020. In the short term, Adidas warned yesterday that this Kanye fiasco is going to cost them $250 million in unsold, wasted shoes. They're not going to sell any more Yeezy shoes. And long term, Yeezy was Adidas's competitive differentiator. One man drove 10% of their Adidas sales. Even longer term, this story revealed Adidas's dark past to people who may not have known about it, which hurts the brand even more. So Kanye was always a risk. Now that risk has real

specific financial damage. You live by the influencer, but you also die by the influencer. Now, a word about our sponsor, Robin Hood. You can do just about anything from your phone, but some industries they've just been slow to move. The finance industry was slow to move from phone to computer

and then from computer to app. Robin Hood wasn't. It's the Silicon Valley based brokerage that's been updating app since it was born in 2015. Using the Robin Hood app for your stocks and crypto is almost as easy as downloading it. So you can invest to your pace on your terms by downloading the Robin Hood app. If you're not investing on Robin Hood yet, to get started, go to robinhood.com slash T-Boy and choose your free stock. That's Robinhood.com slash T-B-O-Y limitation supply. Stocks are offered by Robin Hood Financial LLC, member

SIPC. Crypto offered through Robin Hood crypto. All investments involve risk. By the way, this podcast is not owned by or part of Robin Hood, and we are not employees of Robinhood. For our third and final story, Alphabet, the artist better known as Google and YouTube, just announced earnings. The long-term focus of their earnings was all about the shorts. And the short-term focus of their earnings was all about the shorts. That's true. Yeties, if you want to know what's happening on the internet, start with your ABCs. Ah, Jack, can you take it down to Sesame Street over there?

Alphabet, the $1.3 trillion internet giant. It includes Google. It includes YouTube. Elmo. How do you like them Apple? If something is watched, search for, or consumed online, it's reflected in Alphabet's earnings. And Jack, we just got the earnings report from Google YouTube's Alphabet. What kind of grade are we going to give these things? I'd give it a B minus or a C plus. Okay, that's fair. You love a split grade. That's okay. Because Alphabet just announced their weakest revenue growth in nine years.

Yeah, Yeties. The parent company of Google, their stock just fell 7% yesterday after their earnings showed profits fell big time. Now, we're going to zoom in on the good of this earnings report, but then we're going to do. to zoom out to the overall bad. Here's what Jack and I found fascinating about these earnings. First, the zoom in, a funny thing that Jack and I noticed. All Alphabet wants to talk about is shorts.

As in shorts, 60-second videos. Not jean shorts, shorts, 60-second short-form vertical videos that you can watch on YouTube. And we know what you're thinking, sound familiar. Shorts are YouTube's TikTok knockoff. Shorts launched two years ago as a classic stage five zucking of TikTok.

It doesn't get more stage five zucking in this, Jack. Instagram did it with Reels. YouTube did it with shorts. Well, the CEO of Alphabet now says that YouTube is going to prioritize these shorts, short videos. Because shorts are driving YouTube's growth. Get these numbers, Yetis. TikTok? Yeah, they've got about a billion monthly users and that gets a lot of press. But YouTube Shorts has one and a half billion. YouTube Shorts, their TikTok knockoff, has 50% more monthly viewers than TikTok does. So if you're media advertising PR marketing and you're not on shorts, then you're not really on YouTube. Yeah. So Jack, what's the takeaway for our buddies over at Alphabet?

If you zoom out, Google's results forecast an economic storm. Now, besties, we saw this same thing at the beginning of the pandemic when the economy slowed. And now we're seeing it again. We're seeing it first with Snapchat, who told us last week that their ad sales are slowing big time. And now Google just suffered at six straight quarter of shrinking ad sales growth. From 60% growth a year and a half ago to just 6% growth this last quarter for Alphabet. Jack, that is a straight line down and to the right. That is not a good direction.

Because if advertisers are spending less, it's because they think you and I are about to spend less. Yeah, so Google's shrink in ad sales, that may be a forecast for an economic storm. Jack, can you whip up the takeaways for us over there? Weber Grill stock jumped on news that a P.E. firm wants to acquire. Private equity. They're like that guy who's trying to take over the grill tongues from you. For our second story, Adidas announced it won't sell a single additional pair of Kanye's easy shoes. You live by the influencer, you die by the influencer. And our third and final story is Alphabet. Their revenue growth slowed for a sixth straight quarter.

That's a forecast for a growing economic storm. Now, time for the best fact yet. This one sent in by Samarth Chawa over in lovely Singapore. Britain just got its third prime minister in just two months. Yeah, that's a record. And Rishi Sunak is now officially the prime minister of the UK. And he has set some records down. At the age of 42, he's the youngest British prime minister in 200 years. Okay, Rishi is also the first Asian and Hindu prime minister of Great Britain.

He's also the wealthiest prime minister ever. Yeah. He's amassed $834 million of wealth. Rishi Sunak, the new prime minister of Great Britain, worth. one sixth of a lift. And carry on, Rishi. Yetis, you look fantastic today. And if you want to help grow the pod,

the best way you can do that, H-Y-H-T-B-O-I. Have you had the best one yet? Tell the buddy next to you. If you know, you know. Nick and I'll see you tomorrow. Can't. And before we go,

congrats to Yeti, Andrew Lydden, who got down on one knee and proposed to Lucy and now they're engaged down in Atlanta. Happy five-year anniversary to Team Tam and I'm me over in Dallas.

And a happy birthday to Jorge Muneis. down in Highland, Michigan. And happy 30th to Gore Simmerville in Delray Beach, Florida. And Tyler Oleskey down in D.C. Happy birthday to Patrick Bush in Atlanta, Georgia. Kelly Brie Tal is turning 51 in Pile Up, Washington. And to anyone else celebrating something today, make it a T-Boy.

Celebrate the wins. This is Jack. I own stock of Amazon, and Nick and I both own stock of Spotify and Robin Hood, and we both own some Bitcoin. Bitcoin named Ben. Now a word about our sponsor, Robin Hood. Act, rule number one about a kitchen renovation. Tell your friends about your kitchen renovation.

We know the cabinets are expensive. Well, in the pandemic, a lot of companies renovated their businesses, focusing on apps and digital. Robin Hood didn't have to. It was built digital from the start. Robin Hood's mobile first and intuitive design makes investing a little easier for every stage of your investing journey. Whether you want to trade options, ETFs, or stocks through Robin Hood Financial, or buy some Bitcoin on Robin Hood crypto, you can do all that right on the Robin Hood app.

If you're not investing on Robin Hood yet to get started, go to robin hood.com slash t-boy and choose your free stock. That's Robinhood.com slash T-B-O-I. Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involve risk. By the way, this podcast is not owned by or part of Robinhood, and we are not employees of Robin Hood.