The Best One Yet - “Earth’s biggest IPO is MIA” — Ant’s $310B ghosting. Reef’s $700M parking lot. The Right to Repair in Massachusetts.

Episode Date: November 4, 2020

Ant Financial is the biggest finance company on the planet that was ready for the biggest IPO on earth… until the Chinese Government got involved. Reef Technologies is trying to do something kind of WeWork-y, but with parking lots instead of glamorous offices. And The Right to Repair would hurt corporate profits, but help just about everyone else.$BABA $AAPL Got a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form: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 Wednesday, November 4th. Happy first day of the lame duck session technically. We're combating the lameness by whipping up the best one yet. What do you think, Jack? For our first story, Ant Group is the biggest unicorn on the planet on the Earth. But the Chinese giant just ghosted the biggest IPO ever on the planet on Earth. There's trouble with the Ant Group IPO. Second story, Jack, what do we get? Reef calls itself Reef technology. Clever. But they do shipping containers and parking spots. And they just raise $700 million because the sharing economy, it's evolving.

For our third and final story, the biggest bipartisan business issue on the ballot that you didn't hear about is the right to repair. Save five times fast. No Apple, my Uncle Reggie, isn't an authorized Apple service provider, but he can still fix my iPhone 4. Let Uncle Reggie fix my iPhone. He can turn it into an iPhone 5. Now, Snackers, before we jump into that wonderful mix of stories, full disclosure. Yeah. It is 5.56 p.m. Eastern Standard Time on Tuesday, Election Day, November 3rd.

I'm looking far away, Jack. I can barely hear you because you're over in Vermont. I'm up here in California. I am head to toe in flannel. Nick is nervously consumed an entire pint of vanilla almond butter. It doesn't make clear what the serving size is. I just don't know where to go with that. Nick and I are recording this podcast while it's still Election Day. Markets just closed and we have zero percent of the votes have come in, which means Jack and I want to make the bold call. This one is too close to call. We don't know who won the election. No. It's kind of like a pause in the universe as we record. Jack, this feels like a time oasis without clarity. We have a vacuum of political information and it feels kind of nice actually. We are out of the analogies for this

type of moment. So we're going to do what we do best, digestible financial news. Boom, Jack. Let's hit our T-B-O-Y-3 stories. You're tuned in to 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.

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. Robahood Financial, LLC, member FINRA, for our first story and financial is the biggest unicorn on earth supposed to have the biggest

IPO in history and the day before the prom the IPO got canceled now snackers full disclosure yeah this has been on the news cycle for like nine days and it has not yet hit our like newsiness bar for us to cover it no we have a high threshold first of all we've had two major full disclosures in the first five minutes We're glad, though, that we haven't covered it because this news we're about to tell you. This invalidates all the last news from the nine days about Ant Financial. If we had covered this yesterday, we would have had to totally reverse the story today. We would have had to, like, issue a massive correction. At this point, it's now because you're like, what is Aunt, who's Ann, how does Ann even happen?

Well, think of Ant as a Chinese Frankenap. It's like a mall for every financial service that there is to offer. Jack, I'm just going to list these off here. wealth management, lending, insurance, virtual credit cards, savings accounts, peer to peer payments, bio identification. Sounds like you're talking about Morgan Stanley, Chase, Guyco, MasterCard, Venmo, and clear all in one app. Yeah, they even got this feature they call leftover treasure that's like reinvesting your money. I just love that. It's called leftover treasure. Chinese apps don't do less. They do more. They do more. Oh, and this company snackers,

Ant Financial was raising $34 billion in Shanghai and the Hong Kong stock exchanges to IPO at a $310 billion valuation. That would have been the biggest IPO in stock market history and the $310 billion valuation. That's equal to 39 lifts, five Goldman Saches, four squares, three city banks, about two Bank of Americas, and one J.P. Morgan Chase. Jack, and a partridge in a pear tree. For further context, though, it's only worth about a seventh of an Apple, the most valuable company. So you're like, okay, I get the size, they're big, they're big, but how many people are they actually touching? They've got 730 million users just in China. And we're talking like bank accounts. Yeah. They have more bank accounts than Twitter and Snapchat have users who just

scroll through the app combined. Combined. Oh, and they're double the size of PayPal. And if you think Ant Financial doesn't matter to America because it doesn't have that many American clients. Guess what? It actually does. We're seeing Ant Financial in the states already. Jack knows this. Whenever we get to New York, we get to JFK. And I'm like, Jack, we're not taking an Uber. We're jumping in a yellow cap. It makes me feel like I'm home again. They're iconic. So is the alley pay option that you see in the backseat of a New York City yellow cap. Yeah. It's designed for like Chinese tourists. It just started appearing a few years ago. So we've known for about a week that this was going to be the biggest IPO in stock market history. And Ant Financial made a bold move. They were not going to IP.

on the New York Stock Exchange or the NASDAQ, like most of the companies we cover on this pot. They're making a statement here. They decided they were going to do two listings, one in Hong Kong, one in Shanghai, to really cement China's new Chinese NASDAQ idea. This is symbolic of China's rise in financial markets and China's poor relations with the United States right now. All right. So Jack and I are getting ready. It's going to be a record size IPO. And then yesterday, we hear this news suddenly breaking in the morning.

Ant Financial might no longer meet the requirements for listing in an IPO in China. And then Ant Financial suspended its IPO plans. There was very little details given why the suspension was happening, except we do know Chinese government officials asked Ants executives to come meet with the Communist Party's financial regulators. Now, we don't know what was said in that meeting because it's been kept absurdly secret, but the meeting did include Jack Ma, who is the Jeff Bezos of China. Jack Ma is the founder of Alibaba, which is the Amazon of China. Yes.

And Alibaba actually used to own Ant Financial, but it spun it off in 2011. It still owns 33% though of Ant Financial shares. It's the biggest shareholder. Now, what we do know is what each of those stakeholders in that meeting said right before and right after the meeting, and that reveals a lot. Last week, Jack Ma said something that may have ruffled the Communist Party's feathers. He said that Ant Financial helps small businesses, which are presently not being served properly by China's government banks. Which resulted in the Chinese government whipping up a kind of strange analogy about respect saying that you can't regulate a train station

like you regulate an airport. It was vaguely threatening to AMP Financial. Then yesterday, in the Economic Daily, which is the Communist Party's like favorite newspaper in China, they praised the government's decision to suspend the IPO and they said that Amp Financial must respect and revere the rules. There's no exceptions. Ant Financial, after all of this was said and done, announced that they apologize for any inconvenience regarding the cancellation of the world's biggest IPO. The same announcement you get from the flight attendant when they've been taxiing for too long. We're sorry for the inconvenience. We don't have any more Mentos. So Jack, what's the takeaway for our buddies

over at Ant Financial? You don't always think about political risk when it comes to investing, but you should because it happens. Snackers, Ant hasn't IPOed yet, so the stock couldn't drop, even though their value may be affected. But Jack, whose stock did drop after all this trauma? Alibaba's stock did fall yesterday by 8%. So let's say you own Alibaba shares. Full disclosure, I own Ali Baba shares. And they happen to be the biggest and financial investor. Then you're facing some straight up political risk. Alibaba, which we just said is the Amazon of China, it IPOed on the New York Stock Exchange back in 2014. And if you dive into the S-1 paperwork like Nick and I did, yes, we did. You see that they cited this exact risk as a reason that stock price might fall. Jack, you only get this when you go

in Snack style. Changes in the political and economic policies of the People's Republic of China government may materially and adversely affect our business. I don't think this is an I told you so moment for Alibaba, but they did give us a heads up that this could happen. Snackers, when you're invested in foreign companies, make sure you understand the political risk. It's right there in the S-1 IPO paperwork. For our second story, Jack, the most bipartisan business initiative of yesterday's election. Ketitit up? I think it was the right to repair law, which is on the ballot in Massachusetts to save you an iPhone or save you a fridge. Honestly, Snacker, sometimes Jack and I are whipping up these stories.

And there's just, there's like, there's one stat where like tells the whole story for us. According to a study by the Oko Institute. Now, I heavily have pronounced the umlouts of that German sustainability research group. Jack was a German minor. This is true. The German major, double major. Now, the nether. number of household appliances that die in five years or less has more than doubled since 2004. German minor and double major. Let's just go with that. Now, this statistic that appliances are dying quicker, it suggests our stuff that we're buying at, you know, stores, is being built worse, not being built better like we'd hope. On the other

hand, Jack, it could mean that it's just like impossible to fix things so you buy a new one instead. Either way, corporations are either being evil or we're being. lazy. Now that is exactly, actually the second one, the lazy one, that is exactly what a new set of laws is all about, the right to repair laws, which is a grown trend. So basically, Snackers, it should be easier for you to fix things when they break, and that is what was on yesterday's ballot. It turns out companies have developed a kind of sinister trick of making products unrepairable when they break, aka irreparable. Irreparable. And that's why we're seeing so many authorized Apple service providers or Apple stores.

Right. Now, Apple is saying to us, they only let you repair your iPhone at one of those authorized stores or an Apple store because they don't want the repair to be a botched job. And they also don't want the repair guy to invade the privacy of all the stuff on your phone. Yeah, exactly. But internally over in Cooper Tino, Apple employees are saying other Apple employees, if we make it harder to repair the iPhone, maybe double major, double minor, Jack and German is going to a new one instead. If we make them hard to repair, they'll buy a new one and we'll make more money. By the way, this conversation ever happened on meet you by the oat milk fending machine. So right to repair laws are a rare bipartisan issue. You know, both Democrats and Republicans

are supporting this movement. Yeah, that's why Jack and I found this story fascinating. Overall, the focus here is just making it easier to fix iPhones instead of tossing and replacing them, and everyone kind of likes that. Now, specifically, what these laws are trying to do is, make replacement parts, require companies to make replacement parts easily available for anyone to buy to fix their thing. And they want to legalize like repairs by any person so, you know, your Uncle Reggie can take care of this instead of the Apple store. Massachusetts yesterday had this on the ballot. It was question number one on the ballot. And they were focusing on cars because so many cars require repairs to happen at like an authorized BMW service center.

They want any garage. They want to make it easier for like your local garage. to work on that BMW instead. Uncle Reggie. Now, the right to repair itself, this has also become like a growing movement beyond the ballot in Massachusetts. 20 of our American states have already proposed right to repair laws in their state legislatures, and it's kind of standard in Europe. I'm a German major I'd know. So, Jack, vatis das take away for our buddy is over in the right to repair. This would hurt OEM profits, but help just about everybody else. Snackers, OECA. OEM, original equipment manufacturer, basically any company that's make an expensive physical thing. Jeep is an OEM because they make Jeeps.

Sub Zero is an OEM that makes fridges. Chex, Sony is an OEM that makes the PlayStation 5. And if these laws pass, more things will get repaired instead of getting replaced with a whole brand new product. That means lower sales on future earnings reports of these OEMs because fewer cars, fewer appliances, and fewer gaming consoles would be sold. They get repaired instead. And then Jack and I think in this also means save money for you and me, because those products, they're lasting longer. I think a lot of us would love a $100 iPhone repair instead of having to buy a $1,000 new iPhone. Would take it any dayjack. It also means you'd have fewer

fridges getting tossed in landfill so you have less of the greenhouse gas situation. According to the New York Times, if our smartphones could live one year longer thanks to this right to repair law, that would be the equivalent of taking 650,000 gas burning cars off the road, which is the number of registered cars in New Mexico right now. I thought you were going to say in Berlin. Now this under the radar movement, Jack, you can also have a huge impact on profits and your money and the environment.

It's kind of the rare triple whammy and you rarely see that on a ballot. You're going to want to keep your eye on this movement, the right to repair movement. For our third and final story, littering and, littering and, Littering and, Reef raises $700 million from SoftBank.

The Schnauzberg's tastes like Schnazbury's. Reef is trying to be we work, but the offices will be module containers and they'll be in parking lots. Sounds a little bit different. Now, Reef Technologies is who we're talking about here, and they are the artist formerly known as Park Jockey. Park Jockey sounds vaguely offensive, but I also kind of like it. I don't think they should go back to the Park Jockey. Park Jockey was the Miami-based startup who changed its name to Reef, and they managed parking lots in the past and parking spaces only. Yeah, you know, can you validate my parking? That was Park Jockey. That was, park jockey. That was. That's what they did. Now, Reef Technologies has raised an insane amount of cash from the big money investor behind WeWork. Yeah, honestly, this is a do-less situation, softbank.

Reef is trying to do something kind of We-Worky, so it makes sense SoftBank as that. Yeah, they want to convert parking lots into modern work spaces and entire neighborhoods. No, Snackers. Here is where you need to put on your imagination glasses. Reef will have none of the Instacandy that you think of when you think of WeWRen. One second, I'm just trying to find my imagination. It's over here. Where did I put those?

So instead of a shared workspace with, you know, a fooze ball and spa water situation, Reef is going to rent you a shipping container. That's right. Those huge rectangular boxes, the one you see in every Vin Diesel movie full of contraband that he like busts. Open up the band. Open it up. Reef converts shipping containers into clean, connected, modern workspaces.

And there's actually real demand for these. Yeah, get this. They've actually customized certain specific types. For example, ghost kitchens. The cheapest way to start a restaurant is not actually have a restaurant. You just want a space where you have a kitchen, prep delivery orders, case and point. Jack, remember those fuku fried chicken sandwiches from David Chang? Love them. Fantastic. They're like eight bucks, but I love them. And they're doing them, apparently at a bunch of these reefs. We love the barbecue sauce. The second popular type of reef container is a logistics hub. Yeah, let's say you're an entrepreneur, you need to ship some goods. you can set up a shipping center basically at a reef. Reef specializes in real estate that is underutilized urban parking lots,

which are perfect if you just need to ship to like the Tampa Bay area. Yeah, you got to do Tampa Bay. But then the third and final one we've noticed here, the health clinic at a reef. A bunch of medical institutions are packing reef containers with those giant cotton swabs right now. Those things are huge. So Reef is sticking these like health centers perfect for drive-through COVID testing right next to the hydrants. Reef already has 4,800 locations, which is already impressive. Yes, it is.

And now they're using their extra cash to buy up a whole bunch of other parking lots and double their size. Reef's going big with $700 million. So, Jack, what's the takeaway for our buddies over at Reef? To compete with tech, physical businesses need to get super lean. We have said it before, and we will say it again, Jack, the honors. Retail's not dead. Bad retail is dead. Retail's not dead.

Bad retail's dead. Physical stores can thrive in this digital economy, but only if they offer something you can't get online. If you're a company that requires the movement of physical goods, you still have to compete with tech in some kind of way. To survive against the insanely low cost that you find on Amazon or the intense algorithm efficiency of Uber, you might have to start your company in a shipping container. Reef says its value proposition is turning an empty parking lot into a bustling neighborhood hub. We think their biggest value proposition is the unglamorous but low-cost starting point for physical startups to compete in this digital economy. There's one big thing missing from Reef though, Jack, I know what you're thinking. The pod module of a reef container.

How is there no pod module? Let's make that happen, Reef. Standing desks, recording equipment, and a camera for Nick and me. Jack, can you whip up the takeaway for us over there? In Financial was going to be the biggest IPO ever from the biggest financial company. Blame it on the political risk that Alibaba warned us about in its own S-1 paperwork back in 2014. For our second story, Reef Technologies has developed a modern, lean, low-cost workspace for the digital age. It's a shipping container. For our third and final story, right to repair laws could make things easier to fix.

You're going to buy fewer new expensive things, which is bad for corporate profits, good for like pretty much everything else. Think just about everyone else. the repair people. Including Angela Merkel, right, Jack? Including Uncle Reggie. Now, time bar, snack back to the day. This one tweeted in by Jordan Lera Moore in lovely Crestview, Florida. Jordan brings up a company Enterprise Rent-A-Car, whose main feature that they'll pick you up is arguably its most like anxiety-inducing feature. Do less enterprise. It feels like I'm being stocked.

Turns out, though, the founder of Enterprise Rent-A-Car, a guy named Jack Taylor, named the company Enterprise because he served the Navy on the USS Enterprise. That's right, the World War II aircraft carrier that was the most decorated ship of the war. Jack Taylor served on the ship during World War II. Makes us like Enterprise a little more. Now, Snackers, whatever the election results are right now, which we don't know right now, have patience. Remember, every vote has to be counted because the election rules of Pennsylvania are different than the election rules of Florida.

In the meantime, Jack and I think you look for. Fantastic today, and we can't wait to see tomorrow. And before we go, Snackers, big happy birthday over to Snacker Mohammed El Zane over in Beirut, Lebanon, and Ari Carroll in Ramat, Ghana, Israel, and Kenny Young in Cooper Tino, California, and Young June Kim in New York City, and Sam Henderson over in Atlanta.

And Michael Siddhar in Port Washington, Long Island. Yep. Home of Shriver High School and Sands Point. My dad grew up there. Big Ted, and happy birthday to Brian Pelser over in Delaware, Ohio. That one's confusing. Let there be bagels, Port Washington, Long Island. Great.

Meagles. And happy birthday to Liza Smarnetsky over in Minnesota. And Scott from Scottsdale, Scott's Ferreira, a great all-time snacker. Congrats to Jason Raymond Werner and Holly Bettinger over in Portland, Oregon on the marriage. And happy first anniversary to Elizabeth and Laura in San Francisco. And to Kristen Dancero and Tejas Neer, their first year in Westchester. And happy second anniversary to Dick Joseph and Gabby Kirshner in Columbus, Ohio. And to Ellen Grayson, their two-year in Morkentown, West Virginia. And Aaron Hamock has two things to celebrate today, his birthday and his son's day of birth. Wild. Down in Jacksonville, Florida. Not too shabby. This is Jack. I own stock of Amazon,

nickel and stock of Alibaba, Apple, and Square. 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.