The Best One Yet - Facebook tests ending the “like” counter, Ulta Beauty’s 30% plummet, and Brexit + Argentina problems

Episode Date: September 4, 2019

A “reverse engineer” took it upon herself to investigate Facebook’s code — and she discovered the company toying with a “hide your likes” feature. Ulta Beauty dropped 30% last week, so we looked into why and found an insight in slide #9. And with deadlines quickly approaching, we break down the econo-political drama in Britain and Argentina.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 Wednesday, September 4th. We are coming at you live from the nation's capital. We're snacking from D.C. What do you think this one was today? The best one yet. That's exactly right.

Now we got three wonderful stories. This is a diverse mix. What do we got you? Markets dipped a tad. Partially probably because of Britain and Argentina. Both are having huge economic issues right now and both deserve your attention. This is Crumpets versus Alpha Horees. We're checking out both.

Story number two. Alta Beauty. It has a new deal with Kim Kardashian. Kind of a big deal. Really big deal. But shares dropped 30% on Friday. So we dove into what drives the beauty industry. You're only as good as your last mascara. Third and final story. The rumors are true. Heard it. Facebook might be killing the like button. I heard it somewhere from both Instagram and Facebook. I thought you mentioned it to me once. This is like cultural, societal, business profits and wall street. Now we know it's happening. Thanks to a reverse engineer, yes, that's a real thing. Yes, we'll get it to it.

Who discovered this in Facebook. Now, before we get into all that, look up and look around you. Do you see a direct-to-consumer Casper mattress hat? Are you cramped and being accused of man-spreading? Are you being smushed and have the vague feeling of someone sweating on you? Chances are you may be snacking while air-potting on the New York City subway. We know there are a lot of you out there. We love you guys and we respect the commute.

We're Fortrain loyal, by the way. According to the Wall Street Journal, the MTA, which is the Transit Authority of New York City, has a serious problem these days with lost AirPods. Apparently last Thursday, the MTA said, you know what, we had to fish 18 products that fell on the tracks out for riders. Six of those 18 were AirPods. We don't know if that's a set of AirPods or just one AirPods per hour.

Now, if you're snacking hard right now, and we know you are and we love you guys for it, we feel like we're part of the problem, first of all. Second of all, you spent over $150 on AirPods. You don't want to lose these things. If you replace one, by the way, it's like $60 for that single AirPods. AirPods are kind of great because they're wireless, but you know what innovation could have happened here.

Talk to me. Cords to keep your AirPods from falling out of the dock. I like where you're going with this. Someone make this kind of thing happen. In the meantime, we'll hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get someone legal out the way. The snacks are about to hear, 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. Nope. 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. Rob her financial, LLC. Member Fenra slash SIPC. For our first story, Argentina and Britain's Brexit. This podcast tends to cover U.S. markets and U.S. business. We thought we'd cover one financial crisis and one political crisis. They're both happening abroad.

You've got to know them. Think about America right now. Put yourself in America's economy's shoes. Right. The United States has tried to prevent a recession. The economy's been looking strong. And then what do you got going on? You got like,

A chainsaw fight going on in Argentina and just a dirty slap fest going on in Britain, it's havoc and it could affect America eventually. We'll tell you how. We want to break down both stories. We're going to start with the context and then we're going to get to the news. Jack, let's serve up the context on take me over again. Let me get my raincoat out. Take me over to Britain.

A tad over three years ago, the people of Britain spoke. The subjects voted to exit the European Union. Now it's turned into like the never-ending divorce situation. And we've got a key date up ahead. circle your calendars for October 31st. That is the official deadline for when the exit has to happen, when the Brexit has to happen. Not just any Brexit. This is when the quote-unquote, no deal Brexit, those three magical words actually happens.

Well, Parliament and the Prime Minister are trying to come up with an agreement with the European Union. Like, how are we going to handle this? Let's talk about this. Let's break up. You know, I need your beer from Germany. Chardonnay is going to France. Who's taxing what? You need my soccer from England.

How are we going to exchange this? these deals. If shingard's going to work, what do they make an insuribia? But if a deal isn't agreed to, the no-deal Brexit would happen, and that would be chaotic. I didn't want to get into this. That would be like a dirty divorce. You didn't want to see this thing. They're fighting over custody of the pet. Brutal. Fighting over the custody of the kids. You're following the person on Instagram, but you're not liking anything. You're undermining each other. It could be really bad. Talking to your friends. Facto result on October 31st. Can you believe what France was

wearing the other day? Now, there's a new prime minister in the UK. His name's Boris Johnson. And he says, I am done with extensions. I'm done with delays. We are brexiting on October 31st, no matter what, deal or no deal. But Parliament has stood up and said, you know what? We're not necessarily going to do that. No, we're not cool with the no deal Brexit. Nope. So what's the development? People could like not get their medicine in the UK if there's a no deal Brexit. So what Boris Johnson is saying, you know what, we're going to have snap elections in the middle of October, potentially on like October 14th. Yeah, that's because Parliament passed emergency laws yesterday to eliminate the chance of a no deal Brexit. And now there might

actually be fresh new elections in the UK, like next month. It's crazy. Right before that October 31st deadline was supposed to happen. Okay. Okay. Taking a breath. Now, there's no closure in that story, but we had to update you. I feel like, I don't even feel well right now. Let's move a little south. Talk to me. South of the equator in Argentina. The president, Mauricio Makri, has been tightening the country's like government spending up for the last few years. Yeah, Argentina has a bit of a history of overspending and having debt crises. Now, the people have not loved the fact that the government has cut back on all the spending. Yeah, spending feels good. Spending is salaries for government workers. It's fun. Pensions for government workers. It's like free bus passes for everybody.

BA for the weekend. It's a good deal. But the people are not happy with this new president, and it looks like the new president might actually lose the re-election on October 27. Investors, in fact, have so little faith in the situation right now that both people and investors are trying to get rid of their Argentinian pesos. Yeah, they're thinking to themselves, if the old government comes back into power in October, the value of my Argentinian pesos are going to go to like zero. So I'm going to sell it now and switch into a better currency. So the development we've seen is that the government is now saying, you know what, you can't, they've basically made it illegal to sell your Argentinian pesos to get other currencies.

Can you imagine if it was illegal for us to change into Canadian dollars? They basically put a quote unquote currency cap on the amount of Argentinian pesos that you You can convert to like dollars or AI or RAND every month. So this is called currency controls. And if your government has currency controls, it means your country's in a bad situation. So, Jack, what's the takeaway for our buddies over in Britain and our buddies in Argentina? These are overseas economic natural disasters, but they could come to American shores. And they could affect you in two ways.

The first is economic ripple effects. If Argentina has a crisis, that could ripple into Brazil. And that could ripple into China because China sells a lot to Brazil. and that could finally ripple yada, yada, yada to the United States. Never go when you end with the yada, yada, yada. The second way it could affect you is it could force governments to really spend all their rainy day funds. There are a whole bunch of economic fires going on globally right now, and governments and central banks are having to use up their emergency resources.

What if we actually have a global financial crisis like in 08? You've heard about us talk about central banks cutting rates. They've already cut them. They can't cut them much lower. Yeah, it's like we are using our emergency bazooka before the real emergency could, really happen. So this could affect you. In the meantime, circle your calendars for late October. You've got two big dates there. We'll probably update you then. And I'm going as Brexit for Halloween. Jack's thinking Argentinian currency crisis. For our second story, Facebook's now experimenting

with ending the like. We've all been there. The like it created. We've all been there. You just got a new haircut. Yep. You take a picture with the caption, new hair, who dis? Completely different side part. You check after five minutes to see how many likes you got. Was it the wrong side part? You go to bed. You're up to 75 likes, you wake up, you're at 91 likes. You don't want to round up, you know you want to round up. You want to end 100 likes. You can't round up, though. Before you know, you've spent the last 24 hours looking at your picture and the likes.

Man, Nancy's on Facebook. She doesn't get this many likes, so that makes me feel better. So, Facebook, YouTube, and Instagram are all testing, ending the like-count feature on the posts that you make on social media. And they're doing it in a super stealthy way. In fact, the latest way, just like, we were shocked by. Yes. There is a mystery cracker out there.

Her name is Jane Mansion Wong. She is our Sherlock Holmes cracking this case. We wanted to follow her throughout the case because it read very nicely. She detailed it on her blog. So she has a blog. For the record, she is not a Facebook employee. No. She's a reverse engineer.

Yeah, she likes a waxing crescent. She likes long walks on the beach. And she likes going through Facebook code and nitpicking, looking for little nuggets to tell her what Facebook's up. Jane, you keep doing. that because we don't even know where to even begin doing that because what she does is she reverse engineers by playing with the code underneath everything on Facebook. So here's what she noticed. A current Facebook app that is on one of your phones probably.

It was an Android phone. It has a feature where the number of likes and the number of like frowny faces on Facebook can be hidden from everyone out there. Except for yourself. So when you post the actual photo and you're looking at that part, you can see you got the 91 likes, but no one else sees you only got 91 likes for that. A bunch of news publications asked Facebook about this. They said, are you killing the like count?

And Facebook said they're considering it, quote unquote. It sounds like they definitely confirmed that they're thinking about eliminating the number of likes you get on your phone. Now, the reason this has got a lot of traction is technically Instagram mentioned last month that they were curious about this too. And they're actually piloted a feature like this in Canada, Brazil, and a couple other countries. And of course, Instagram is owned by Facebook. And then you got YouTube, which is owned by Alphabet, which is playing with a similar thing, or if you have a certain amount of like likes and subscribes on YouTube, no one sees the snack.

Snackers, Big Tech is thinking about killing the number of likes you got out there. This is a major stealthy, healthy step. We just hit it at the beginning of this story. Like anxiety is what we're calling it. It's a big problem. People post a pick and then they anxiously wait to see how many likes they get. And then they never get that haircut again. If you don't get to 100 likes, like that calls for a day of morning

or even deleting the picture because you don't want to see. And then it's pushing an entire generation to only post. certain created versions of themselves, which is leading to more anxiety. Now, Facebook is TBD on whether they'll actually kill the light count. They're only testing it right now, and they're measuring to see the impact on its business. But in the meantime, Jack, I think it's safe for us to go into, what is the takeaway for our friends at Facebook? Facebook desperately needs some good PR, and this could be it.

We are in the middle of a giant tech clash right now. You've got both Democrats and Republicans calling for Facebook and others to be split up. Nick, to me, ending the light. account is an almost undisputable good for society. Jack, that is a beautiful image. But to Facebook, the big question is whether it's going to cost them money because if people aren't liking, maybe people aren't engaged. So here's what they're going to do. They're going to roll out this new feature, eliminating the number of likes, the like counter on a subset of Facebook users. Maybe in a few different countries. Maybe not even the United States. They want to test

that in Colombia or Ethiopia. And then they're going to look very closely at that subset and see, are people using Facebook more? Are they using it less? Are we making more money? Are we making less money? Then they're going to weigh the cost to the business of doing all this with the benefits to society, and one's going to end up on top. Classic cost-benefit analysis. I hope they end up killing the light count. For our third and final story, Ulta Beauty.

It stock dropped a whopping 30% last week we noticed while we were on vacation. So we decided to do a deep dive into why. But first, you got to talk to me, Jack. What is your best beauty tip? I've been thinking about this all weekend. Snackers, you never get to see Jack and I. We're not particularly attractive, but we do our. fair share of effort just to try to look good in front of the pot. We like to think that we glow

just a little bit. I gotta give all the credit to my wife. You gotta hear this in your ears. Nasal strips. That's big. Nick, I thought my nose was clean. There's like stalagnites and stalactites in there. It's kind of gross, but it's a really satisfying thing. I just think you got one word. It's sunscreen. You wear a little sunscreen every morning. 35 SPF, boom. You're good to go. You'll live for an extra 50 years. When you go to the beach. Potentially rarely. Or every day. I cannot actually stand by it. Now, Alta Beauty. Based in Bowlingbrook, Illinois, the capital of beauty in the Midwest. It has a investor deck, and Nick and I dove into it because we wanted to see why the stock dropped 30% on fracas. Now, they shared this during their earnings report, which came out last week. The actual

deck looks like it was drawn by Barbie. It's like very pink. 50 shades of pink. And slide number nine. We jumped right to that slide. It stood out for us for a key reason. It says it all. Nunes drives the business. Now, get this. We then discovered these facts about Ulta that were mind-loving. A majority of product purchases at Alta Beauty's retail chains of beauty and cosmetics, makeup, and everything like that, were first-time purchases. All right. Let me unpack that. So over 50% of the sales at Alta's 1,000-plus retail locations were things you've never tried before. So you're not just refilling it because you ran out because you run out every two months. Not the case. You're trying a fully new cosmetic product.

New sheet mask, a new tool for brow contouring, shadow eye, these things were all new. testing something. Who was it John Muir that said never stop exploring? I believe that replies to our friends at Ulta. So while you're waiting for that stat to sink into your skin, you have to think about Ulta this way. It is a relentless hamster wheel of newness, and that pressure is hurting the stop.

I don't even think newness is a real word. I can see the strain lines right now on Alta's face. So sales grew by 12% last quarter, but that was a slowdown from the previous year. And the company said it expects that growth to continue slowing to just 9 to 12%. They even had a follow on

slide that said, we need to adapt to the changing landscape by driving newness. They're obsessed with the word newness. Really into the newness over at Illinois. So how are they creating some newness? First, they launched an exclusive cosmetics deal with Kylie Jenner. Which is like the logo basically had a lip with like what looked like milk all over. Now they're launching another Kardashian deal with Kim Kardashian, KKW Beauty, Kim Kardashian West, Beauty this fall. It's coming out this fall. She'd been previously selling online. Now she's got a line at Ulta. And she posted to Instagram and her 100 47 million followers saw go to Alta Beauty. Boom, marketing department at Alta early holiday party.

So Jack, what is the takeaway for our buddies over at Alta Beauty? To understand a business, you've got to understand the core customer and their needs and their habits and their wants. And Alta Beauty's core customer are beauty enthusiasts who are willing to spend big to constantly be trying something new and never be settling for something they're used to. So if you're a beauty retail chain, you are only as good as your last mascara. And your focus has to be not on getting people to come back for their old stuff. It's got to be on new rituals, new products, creating entirely new processes. This is totally different than Harry's Razors, Dollar Shave Club, Lola Tampons, subscription services that while you're coming back for the same exact thing.

Yeah, these beauty companies need to create new rituals based on new products that didn't harm animals in the testing of this product. Completely new routines. Jack, can you whip up the takeaways for us over there? Nick, Argentina and Britain, they got problems, and those problems could start affecting the U.S. Great soccer teams, mediocre finance, and econ teams. By the way, circle your calendars, end of October. Two big elections. The Halloween costume set. Second story, Facebook is considering ending the like count from your insta fee. And the cost is potential ad dollars. The benefit is

killing anxiety in making society a lot better and happy with everyone. That tough decision. Not too much. Third and final story, Alta Beauty has to keep convincing customers. It has something new to put on your face. If you're tired of that wrinkle cream graveyard, you know what I'm talking about. Jack, time for the snack fact of the day. This one is kind of medica's related back to the intro. All right, Apple's wearables business, which includes AirPods and Apple Watch. Right. I think that's it. Pretty much friends it. Air pods and Apple Watch. What else? The two Apple products you can wear. Anything else goes in your pocket? No, that doesn't count. No. Oh, the iPod clip on. There we go. Okay. The wearable business has more sales than 60% of companies in the Fortune 500. Let that sink in. That means if Apple's wearables were a company,

they would be in the Fortune 200. The top 200 American companies in sales. Stackers, love being with you today. Jack and I are actually in D.C. We'll be at FinCon for tonight. Tonight at the Smithsonian Museum of the American Indian. In the meantime, if you can nail a good place, you think we should go afterwards for a good burger

because I haven't had one in like three weeks. Hit us up at Robin Hood Snacks. We want to 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.