The Best One Yet - “Favorite child? It’s hard seltzer” — Boston Beer’s 21% surge. The biggest SPAC ever. No blockbusters in 2020.

Episode Date: July 27, 2020

Sam Adams owner Boston Beer shockingly doubled profits last quarter, but it’s not thanks to Boston Beer. Disney, Apple, and Netflix have made moves that just killed the summer blockbuster biz. And the biggest Special Purpose Acquisition Company ever just went public, officially making this the “Summer of the SPAC” (fun to say).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. Welcome back. It is Monday, July 27. Nick, I'm getting very strong late July vibes from today's podcast. Snackers, Jack asked me to come over and lather some like SPF2 Hyundai on his back. You know what they say?

These guys out, dies out. This happens to also be our best Snacks Daily we've ever put together for you. For our first story, summers are for blockbusters. Nope. Change that. Movies by Disney, Apple, and Netflix killed blockbusters to make D-TLR happen. Direct to Livinger. Story Jack, what do we got? White Claw Summer? Nope, Boston Beer's stock just searched 26% thanks to its

White Claw Frenomy. Truly Hard Seltzer. Third and final story, Jack, what do we got? Summers are for IPOs. Nope, the biggest SPAC ever just went public. I can't get anything right, but I do know that a SPAC is a special purpose acquisition company. Spack rolls off the tongue better, so we're looking at why and how that actually became a thing. But before we hit those story snackers, Mattel, the toy company, just reported earnings, and they have one of the most entertaining earnings decks we've ever watched. Go over to slide 13. There is a stack of Hot Wheels on the page that is just charming. Nick, go back to the opening slide. It looks like a child with crayons in first grade did a like doodle font thing. Apparently in the next earnings report, they're purposely going to have typos.

Now, there was a major surprise in Mattel's last quarter. Action figure sales plummeted, but doll sales surge. The Jurassic Park Megalosaurus Rex sales fell by 12%. The Beach Party Barbie sales surged by 35%. And there is a fascinating correlation here. Apparently kids don't care about action figures unless there's a huge summer movie. Last summer, we had Avengers Episode 36. Tons of toy sales. This summer, no Avengers 37, no toy sales.

But Tell's profit depends on men in spandex. Now, the last experience I had with an action figure was my WWF wrestler set. But Nick? Love it. Holkogen's leg broke off after getting tombstone by the undertaker. haven't played with the toy since. I'm pretty sure that's just a doll in noir leggings. Yes, men and tights.

They're very much men in tights in the WWF. Mine goes back to Stretch Armstrong, 1996. I'm at my friend Justin's house on 84th and West End. The Bicep bursts, I thought I killed Justin. I thought Stretch Armstrong's biceps like are unburstable. They're burstable when you turn a corner. It's an ugly scene.

Also, you have a friend named Justin? Not after that, Jack. Not after that. Let's in our three stories. to the lawyers and we got to get something legal out the way. 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. Right. Snacks is digestible. Business news for you. Robohood Financial, LLC, member FINRA slash SIPC. For our first story, the 2020 summer blockbuster is a

officially dead. But some B-list movies will go direct to living room. Now, Jack, I know you got that. Everyone's got that draft email open with like a list of movies that they're ready to send to themselves at some point. You keep adding to it. I actually use my notes tab on my computer. There's nothing left though on that list, Nick. I've watched everything there is to watch. And Blockbuster movies are right now going the way of like the Tokyo 2020 Olympics and dating. Yeah. Delayed until 2021. All three of them. Now, instead of delaying another month or like several months, Disney, is officially delaying Mulan indefinitely. A Disney spokesperson said,

nothing is set in stone anymore, so we're not even going to try to estimate when Mulan will come out until we have more confidence. They're like, please stop asking us questions, actually. It's like, are we there yet? You can look out the window and see when we're there. On top of all this, last week, a whole bunch of other movies just got delayed too.

Star Wars, a Wes Anderson flick, Tennant, the latest Christopher Nolan heart pounder. They're all delayed. Every Christopher Nolan trailer is just like, Bop, bop, bop, bop, bamb, bha, bha. And Avatar, too, which we've been waiting 10 years for, by the way, got delayed another year. It was supposed to come in December. Now it's coming next December. And fun fact, Jack, and I noticed, they decided to push back avatars three, four, and five by like another 12 months for each of those. That's right. They're already planning three, four,

and five for 2024, 26, and 2028. A comfortable two years of social distance. Now, other movies are planned for this summer, fall, and winter, and they're like TV date. Right. Steven Spielberg's West Side Story. remake and Black Widow by Marvel, no word on whether those will actually happen or if they'll get delayed. Now, the interesting thing here is that while Disney won't put anything in stone, two other things are set in stone. Yes, Apple and Netflix don't care about movie theaters one bit. Nope, Tom Hanks, his new movie Greyhound, came out on Apple TV Plus and became the company's first hit. Naturally, it's about World War II because Tom Hanks. Yeah, Tom Hanks does want to play in any role

that's after 1956. And get this, 30% of people who watched Greyhound during the premiere weekend were new subscribers to Apple TV Plus. Yeah, according to PFWTM, Apple now realizes that big names get big signups. The other thing that is set in stone is that Hollywood is in rough financial shape because no shows and no movies have been produced since March. There's some serious economic impact there. We're feeling, you know, you got to feel for the writers, the grips, the doubles, the camera people who aren't working right now. So Jack, what's the takeaway for our buddies over in the movie industry? For now, though, movie theater's role in society is still secure. Snackers, in April, Trolls 2 made more money with a $20 streaming rental than Trolls

one did in movie theaters. And Nick, that made AMC theaters furious. Furious. So much so that they banned all of Universal Pictures movies from its theaters forever. But interestingly, it seems like movie studios aren't following the old Trolls 2 playbook. Now, we're not saying that AMC theaters, Regal, and Cinemark won't, like, they're in the clear and they won't go bankrupt. We're not saying that. No, no, their stocks are teetering because they're their revenues have been literally $0 since March. But we are saying that movie studios are staying faithful to movie theaters and not going direct to living room.

They're waiting until they're ready to have butts and seats and not cut them out like, you know, trolls too did. Which kind of stinks because I'm dying for movies right now. For our second story, Boston Beer Company's stock jumped 26% before the weekend. Deborah, we're out of beer. Get this guy a salsa instead. Turns out it's got a favorite child and it's not beer, it's hard seltzer. Snackers, Nick and I jumped in snack style to Boston Beer Company's earnings report.

We found the word keg in there three times and barrel another three times. So we've got to ask, is it a keg or is it a barrel? Yeah, this is apparently the first ever earnings report sponsored by Sig S. Now, Boston Beer's main product is Sam Adams. And it also recently bought Dogfish Head, the brewing company based in Delaware. You may know Dogfish Head because they have an IPA that could kill you. I think Delaware likes its beer like it likes its cement heavy. It's the only beer out there that's 120% hops.

Now, Boston beer's stock, though, surged a shocking 28% yesterday because sales, get this, last quarter, sales rose by 40% and the profit doubled. But the earnings report from Boston beer showed its beer situation is getting a little complicated. Right. Sam Adams, which Boston beer company is most known for, the sales fell. And it is struggling to even brew Sam Adams beer right now. Because it's hard to make beer. You need six guys.

They have to have beards. They need overalls. The tanks are huge. I think fermenting takes a long time. It seems like it would take a while. In the meantime, if you want to do seltzer, I think you just need water and like a soda stream. You need water and a straw to blow bubbles into it.

And that leads to what Jack and I found so fascinating about this earning support that Boston beer has revealed it has a favorite child. Truly Hard Seltzer. Yep. It is owned by Boston Beer Company, and it is the golden child of Boston beer. And truly whipped up double digits. sales growth for Boston beer in the last quarter. 85% of the hard seltzer market that's flying off shells at the grocery store for the beach

is two companies, White Claw and Truly. And it turns out truly actually took market share from the leader, White Claw, in the last three months. Even though this summer there are laws when you're drinking claws. Sales of sparkling seltzer are flying this year. Sales of the beach drinking booze are actually up right now, even though you can barely be at a beach. Now, the other top performer for Boston beer is Twisted Tea, which has 90% of the hard tea market. It's growing at a rate that executives say is beyond our expectations. And I got to say, I agree because it's a weird drink. You don't enjoy twisted tea. You just get

through a twisted tea. So, Jack, what's the takeaway for our buddies over at Boston Beer? Boston Beer Company needs to change its name. First, beer is trending down. And second, Boston beer is leading in that anti-beer trend. That's right. Beer has been declining in the United States for years. And now beer represents, for the first time in decades, under half of all alcohol sales. Now, Boston Beer doesn't break out its beer sales, but research company IRA says a whopping three quarters of Boston beer sales aren't even beer. That's thanks to truly hard seltzer and twisted tea. Just like PepsiCo should rebrand to Snacks Co, Boston Beer should rebrand to Boston Booze.

Boston Boos. That's a T-shirt that would probably sell too. For our third and final story, another summer trend of 2020, SPACs. Famous investors are now IPOing themselves. themselves. Now, Snackers, if you got a company you want to go public, you basically got a menu of three options looking at you. The first option is really nice. It's called an initial public offering, it's short for an IPO. It's kind of like, you know, going to a restaurant. It's a classic. It's a sit-down affair. You're getting service from the waiter. You get the whole thing,

the steak, the frets. There's going to be a big bill at the end. You're supposed to tip your investment banks. Yes. This is what Apple did. It's what Yeti Coolers did. It's what 99% of the public companies out there did. It is classic. You create stock. The investment bank sells its new investors. And then that stock starts trading in public markets so anyone can buy it. We cover IPOs on this podcast all the time. Yeah, but then there's number two on the menu. And that is a direct listing. This is faster. It's no fuss. It's kind of like ordering pad tie delivery. Yeah, you're not thinking about it. It's just showing up really quickly in 25 minutes. Spotify and Slack did a direct listing last year. It was a very popular dish in

2019. Just let their private shares start trading on stock exchanges and boom, there they are. Delicious done, Eden. It's like you open up the window and suddenly your stock just flies into the public. It's a beautiful image. The third option on the menu here is just getting acquired by an existing public company. It's kind of like eating leftovers. No work for you. It's like eating off someone else's play. It's an aggressive move that you have no control of and do no effort for. This is how Instagram went public by getting acquired by Facebook in 2012. One day, you're a private company. boom, the next day, you're part of a bigger public company. But now there is a fourth option that is extremely popular this year.

Yes. It's called a SPAC. The Blue Plate Special, getting really popular this summer in particular. I looked at Nick, and I'm like, Nick, are we finally going to talk about SPACs in this podcast? And we were like, yes, if we can only come up with a creative analogy and spend the next six hours trying to figure it out. It's a special purpose acquisition company. Brutal Nair. Not that fun to say. Much more fun to say. much more fun to say the SPAC. Yeah, Spanx like Easy, the S, the X, it's beautiful. Now, one famous investor basically creates a public company with one special purpose. By another company. And perfect

timing snackers, because last week, Bill Ackman, the famous hedge fund investor, decided to go public with his very own SPAC. He thinks he knows a thing or two about investing, so he IPOed Pershing Square, Tontine Holdings. Sounds like a character in Downton Abbey. Now, that company issued an S-1 document, just like any other IPO that tells us what the company is all about. And in that S-1 document, Bill Ackman clarified that SPACs are blank check companies that just have one purpose. Yeah, one purpose. Buy a company specifically a private company. Generally, you have to buy the company within two years if you're a SPAC, or else you have to return all the money you got from your IPO back to investors.

And then Ackman went on to mention the words, mature unicorn six times in the S-1 document. Tells us a little about the type of company he's planning to buy a mature Unicorn. So this is how it'll go down. Boom, suddenly a private company becomes public because Bill Ackman's SPAC will eventually buy it. Pershing Square is a shell company now that could become a real company someday after it acquires a mature unicorn. Yeah, Bill Ackman could end up buying like Airbnb or impossible foods, and then they're publicly traded companies. So Jack, what's the takeaway for our buddies who are SPACs? Pershing's SPAC is just Bill Ackman today. Someday, it could become a real company. Snackers, owning a stock of a

Spack is like outsourcing your money to be invested in by the manager. You close your eyes and you're like, Bill, here's my money, invest it well, please buy a good company with this money. You're investing in the manager of the SPAC, not the business of the SPAC. Recent SPACs have acquired companies, some of which have been successful, like Virgin Galactic, Nicola or Fisker, the electric car company. But if nothing gets bought or a bad company gets bought, the stock could easily lose value. Bill Ackman was handed $4 billion in cash through his SPAC's IP. last week. That's $4 billion of investors blindly trusting him with a whole lot of money. And if Bill doesn't manage to like pull a rabbit out of a hat here, beautiful image.

They'll reflect their disappointment by selling their stock of Pershing Spack. Magical. Jack Canyl whip up the takeaways for us to start the weekend. Movie studios are postponing all the blockbusters instead of cutting out movie theaters. Direct to living room. The streamers are doing it. The old school movie studios aren't. Second story, Boston Beer Company had its best quarter ever in spite of its beer sale. Call yourself Boston booze, we're handing it up to you. We served it to you. Just do it. Third and final story, Bill Ackman pretty much IPOed himself with a company called Pershing Square Tontine Holdings. Close your eyes and stock of us back could become a mature unicorn. Adorable image.

Now, time for our snack fact of the day. This one tweeted in by Jason Ashby in lovely Knoxville, Tennessee. Narcissistic CEOs. Try to make their companies look better than they actually are in their earnings reports. Yeah, actual study here, apparently a team of PhD is determined which CEOs are narcissistic based on like a whole variety of traits and issues. For instance, if your CEO requires that his or her picture be huge on the company website, that's an indicator of narcissism. Then this team of PhDs determined that narcissistic CEOs are more likely to highlight numbers that make their company look better.

And then bury numbers that make their company look worse. We're looking at you, adjusted profits, adjusted adjusted. Great snack fact right there. Now, before we go, happy birthday to Sabrina Abu Zara from Chicago. Chicago, Illinois. And happy birthday to Sophia also from Chicago. And Arden Finley from Waco, Texas. And Hunter from Denver, Colorado. Finally, happy anniversary to Tieler and Eugene from Pittsburgh, Pennsylvania, celebrate in six years. And of course, Maximiliano and Mallory from San Pedro Sula in Honduras, celebrating 11 years together. I heard those last two snackers have two kids who love saying H-Y-H-Y-S-D.

Have you had your snacks daily. Have a great week, Snackers. We'll see it tomorrow. If you know, you know. This is Nick and I own shares of Apple. 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.