The Best One Yet - “Fortnite vs. Don Appleone” — Fortnite’s App Tax boycott. USPS pain = FedEx gain. Chili’s virtual wings.

Episode Date: August 17, 2020

Aaaand we’re back. Fresh off vacation, we’re looking at the screenplay-worthy showdown between Apple and Fortnite. UPS and FedEx stocks get love when the US Postal Service doesn’t. And shares of Brinker International, the owner of Chili’s, jumped after launching a ghost kitchen.$EAT $AAPL $UPS $FDX Want 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. Welcome back. It is Monday, August 17. Should we get right into it? Well, you should get, Byway, Jack, were you at Lake Tahoe or the Fountain of Youth for the last week? That water is drinkable. You are glowing, Jack.

Is this our best one yet? This is the best one yet. For our first story, we're calling it right now. Yep. Someone should turn this story into like a Netflix three-part docudrama. Snackers, Apple and Google control all your apps. So video game Fortnite is trying to destroy the app. stores. For our second story, Chili's. They're famous for their 1199 Presidente Margarita and the entire

staff coming over to your table to sing happy birthday. Chili's is not known for delivery though, so it just launched a ghost kitchen worth a filthy $150 million. No flare required at that ghost kitchen. True story. Third and final story, Jack. Neither snow nor rain, nor heat, nor gloom of night can stop the U.S. Postal Service. It's a poem. But politics apparently can. Yeah, yeah, yeah, yeah. Apparently we're looking at FedEx and UPS whose stocks are sitting back. and watching the biggest competitor of theirs get attacked in Washington, D.C. But before we hit those stories, we are back. Now, while we were gone over the last week, there were some things we missed covering for you.

All right, Nick, you remember the hoarder's almanac? Like, we're in week 38, and we're wondering what is in shortage supply right now. Jack and I checked it out. Apparently, while we were gone, the latest thing being hoarded is Dr. Pepper. New marketing strategy. Dr. Pepper just told the world they had a shortage. Kind of self-fulfilling prophecy when you tell the world. world you're about to run out. There was also a major zucking that occurred when Facebook's

Instagram reeled out this thing called Reels, which is basically TikTok. We officially have a class five, level seven zucking. You're going to have to take cover. A brazen zucking. Also, Chipotle just came out with a line of clothing, Nick, that you're going to love because it's made partially by avocado pits. We thought the first thing here, that means they're selling the clothes. They're going to make the guac less expensive. No, guac is always extra. Rock is always extra. Jack and I had an amazing and relaxing one week vacation. We missed you guys, but Jack, your three takeaways from the break? Well, every day was the same for me. Wake up with yoga and meditation, go swimming, go hiking, and then watch an epic movie with an incredible dinner.

Jack, my three takeaways, surfing is hard, fish tacos are easy, and I learned that salt is the only rock we eat because I read a book on salt. True, very true. Now, Snackers, we love you for patiently standing by and waiting for today's snacks. We couldn't wait. You look fantastic. All of you, by the way, 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. It 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. 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. Robahood Financial, LLC. Member Fenra slash SIPC. For our first story, the biggest drama ever right now is Apple versus Fortnite. Nick, is it the biggest drama ever or is the biggest drama right now? You round up on this one. You got to round up on this one. Apple versus Fortnite has evolved over the weekend to Apple versus everybody. Snackers, you got the Apple tax, you got the Apple toll, you got the Apple rent,

you got the Apple fee, and you got the Apple Payola. Different names for the same thing. Beautiful. It's the price developers have to pay to ride on the Apple and Google. digital highway. Case and point we whipped up for you, Snackers, think about Spotify. Jack, take it away. You pay $10 a month for Spotify premium through your iPhone. Guess what? Apple, which is Spotify's biggest competitor, is taking 30% of every monthly 10 bucks that you pay Spotify. And if you think it's unfair, Apple's there saying, hey, we build and maintain this incredible road. We're paving it. We're adding the

lines. We put the signs up. We're going to get a cut of the fees. Now, it's not just Apple that is acting like an overlord here. Google's doing the same thing. You got the epic duopoly of tech going on right now, Apple and Google. Both charge 30% of all the revenues that an app makes on their phones in the first year and 15% of revenues for every year after that. It's an aggressive tax. So last week, Snackers, this thing got kicked up like six notches. Fortnite, the video game, practiced some civil disobedience of the app store laws. Martin Luther King and Mahatma Gandhi would be impressed with the move's Fortnite duck last week. Lots of blood though, lots of bad language. this kind of played out like a Tarantino screenplay.

All right, here's why Fortnite is upset. 133 million people have downloaded Fortnite on Apple devices, and those users have spent $1.2 billion within Fortnite. Well, guess what? Apple got 30% of all that money. Let me whip out my abacus. That means Apple's walking home with $400 million in one year of Fortnite's revenue just for setting up the app store and letting Fortnite be there. just for letting Fortnite exist.

So then on Thursday, things got kind of aggressive. Fortnite didn't like what was going on. This was the big announcement. Fortnite basically said, Hey, Fortnite users, I will let you have 20% off all of your purchases in Fortnite. If you use this special cash register that I've set up within the app and don't use Apple's cash register.

They're like, make a left. Go to Lenny down on register number six. He'll check you out and he'll give you the nice local discount. Well, on the same day, Apple saw this and they banned Fortnite. from the App Store for violating Apple's App Store rules. Removed, gone. And then Google, because they're just kind of copying Apple these days. They just did the same thing.

And then immediately, Fortnite was ready for this. They sued Apple and sued Google for anti-competitive behavior. They had the lawsuits ready. They'd like boomerang this thing for tomorrow morning. And they're like, no, we're going to press that now. We're pressing send now. Nick, the email was drafted. The attachments were set up in the email.

They read the email. The overruled boomerang. And they sent the email. to the lawsuit now. And then Fortnite CEO, Tim Sweeney, decided to kind of kick things up an additional notch and troll Apple with his own theatrical video mocking Apple as Big Brother. The George Orwell classic, they portrayed Apple as Big Brother. Kind of feels like Fortnite's maybe using a lot of company resources within the last 72 hours. No, Nick, this was like Fortnite's biggest move of 2020, from what I understand. It's like showing up to a protest and you bought everyone a matching

penny insured. Now here's the thing, Fortnite is acting as a martyr for the entire digital economy. Yeah, the incredibly popular game is banned from the app store right now. They're going to take a lot of revenue pain from this, but Fortnite is acting out of principle. And guess what? It's gained some supporters out there. Jack and I put up a list here. You got Facebook, Tinder, and a whole bunch of other apps that are joining it like a coalition against Apple and Google. They are rallying against Don Appleone for taking a cut of everything. could always leave the Apple tax. So Jack, what's the takeaway for our buddies over at Apple? The App Store isn't a product. It is a public utility. Snackers, you got roads, highways,

electricity, water, cable, the internet, they are all public utilities. All of those things maintain key infrastructure for our society to operate, and since they're so important, they get regulated by the government. Well, apps kind of used to just be like Instagram, but now you're watching movies, you're dating, you're shopping, you're doing it all. via apps. It's pretty much a public utility, except it's not regulated. And Apple's taken a 30% cut to everything, including Apple TV apps. So like, let's say you want to watch Disney's Mulan on rental on September 4th, Apple is going to get a 30% cut of what Disney's charging you for that. And that hefty cut explains why Apple's services division is now Apple's second biggest profit puppy right after

iPhone. It is huge. So Google and Apple are effectively taking a 30% sales tax on the entire digital economy. And now, for the first time, the entire digital economy seems truly fed up and is fighting back. For our second story, the publicly traded company behind Chili's just launched its own virtual kitchen. It's called Just Wings, and it's on its way to becoming a unicorn. Snackers, have you heard of Brinker International? The answer is no. For every snacker listening, it sounds like a home security company. It's not. It's not. No, no. We can give you the ticker symbol, though, because it's the best ticker symbol we have ever seen. E.A.T. Eat.

Not a security company, a food company. Turns out Brinkers owns 1,000 Chili's and Magiano's physical restaurants. And this company is all about the physical dining experience. Yep, you got the classic, like, you got the laminated menus. You got the, can you all slide into the booth here? You've got the playlist that is the same playlist for the last 30 years because it was decided by corporate. All 1,000 stores have the same playlist, corporate approved. You walk outside, you use the menu as an umbrella.

It's a wonderful thing. Now, the stock of Brinkers International shockingly jumped 20% last week, despite the pandemic, because of this news. Brinkers also just launched its first ever ghost kitchen called It's Just Wings. Now, this is a ghost kitchen, so there's no storefront for It's Just Wings. Nope. They only do delivery. And Jack and I check the numbers.

Turns out It's Just Wings. is doing $3 million in weekly sales with zero physical locations. As we mentioned, zero physical locations, but they're piggybacking off of Chili's, which has these kitchens that are doing nothing mid-pandemic. No, though. So they've got a simple menu over it, it's just Wings, and they're delivering exclusively via DoorDash. The only place you can find, it's just Wings, is on the DoorDash app and DoorDash's website.

Basically, Chiloh's got these kitchens. They're used to smoking ribs now they're just throwing some chicken parts in there, too. And here's the best part. It's just wings. Only has three things on the menu. It's like my cousin Vinnie with breakfast, lunch, and dinner. It's got wings. It's got curly flies and it's got Oreos.

Wait, actually, Jack, it's got fried Oreos. That's what it does. It does fried Oreas. What? Yeah. Okay, can I say curly fries are an underrated way to cook a potato? Yes, you can. I think Arby's curly fries the last time.

Delicious. Curly fries always have a good ketchup to fry ratio. Also, fried Oreos, I believe, the official food of Iowa. You dip it in vegetable oil. It's great. Now, this feels like they came up the idea. of Just Wings over the weekend. They're like, killer wings, stupid prices, let's do it.

Bob, let's do it. Somebody copyright this thing. Well, guess what Snackers? We looked into it. Turns out the catchphrase for this company is a trademarked killer wings, stupid prices. Now, the beautiful thing about It's Just Wings, the Brinker CEO says it's a capital-free business. Yeah, basically, they're using the exact same kitchens they already have for Chili's. They just bought a couple new

fridges to hold some more of the wings. And It's Just Wings has become a $150 million brand since the pandemic started. Get this. Apparently, it's just wings is going to become one of the top 200 U.S. restaurant chains by sales by the end of this year just by keeping up its current pace. Now, we'll see if that happens if the NFL gets canceled because chicken wings in NFL has high correlation. Feels like an adjusted ask risk. But in the meantime, investors love it. The stock for Brinkers had tanked to $7 in the middle of the pandemic. But since then, the stock has grown by over five times to $36 a share. Five times. Wall Street, loves this pivot. Chili's physical restaurants are in huge trouble, but ghost kitchens are booming. So, Jack, what's the takeaway for our buddies over at Chili's? Disrupt thyself.

Jack, can you preach it again, please? Disrupt thyself! In 2009, Travis Kowloenik founded a company called Uber to disrupt taxis. Guess what? Taxis did not disrupt thyself. Nope. They did not build the nap. They did not evolve their 100-year-old business, and they just headed down this non-techified demise path to destruction. Now, since Travis left Uber, he's raised $400 million for a new company, which is a startup focused on ghost kitchens to disrupt physical restaurants. Silicon Valley loves this virtual kitchen idea because food delivery is a huge thing, and why waste money on a dining room if all you care about is delivering food? Food delivery's big, the ones with the lowest cost will win. But Chili's would love to get in on this trend.

They're an ancient rib restaurant chain. They've disrupted themselves before someone else could. So it's just wings might end up cannibalizing some of Chili's very own sales, but that's better than Travis's ghost kitchens stealing those sales anyway. For our third and final story, moves from the White House are affecting two very specific stocks. UPS and FedEx are gaining as President Trump defunds the post office. Which means Jack and I got to talk about the greatest postal worker of all times. time who climbs like a ring-tailed lemur from the Pacific Northwest. When you control the mail,

you control information. Well, there is no such thing as junk mail. Newman. Snackers, the mail is more important than it has ever been in the history of mail. You may be moving apartments, you may be sending a care package to an isolated aunt. You may be bombing hair clippers off your buddy so that you can finally cut your hair. Now, there's also a huge election in November that's going to require a record number of absentee and mail-in ballots. Nick, are you interested in standing in line for hours with hundreds of strangers to enter the basement of public library PS-44 on November 3rd? Jack, it sounds charming, but there's also apparently the option of dropping off your ballot at an adorable blue mailbox on the corner, which is also safer. Because of COVID-19, mail-in and absentee ballots

are going to be huge this election. Yeah, Democrats have therefore added $25 billion for the post-office funding in a proposed stimulus bill to prep for the election in an unprecedented moment. Republicans, though, are pretty much like, no way. And President Trump has done the polar opposite. Yeah, President Trump has actually said publicly that defunding the post office means it can't handle November's surge in voting by mail. He also says that mail-in balloting will lead to fraud and or Democratic victories this November. So when you take a look at the Trump appointee who took over the post office in June, by the way, Postmaster General, great LinkedIn label right there. know how many stars that general gets that. One of the only generals who does little battle. And it turns out

he made three very particular moves that ended up moving stocks. And these moves had a huge impact. The first, he ended overtime for all postal workers. Yeah, if the mail isn't all delivered in an eight-hour day, he basically said that's okay. Bring the mail back that you didn't deliver and stack it up in a pile and we'll deliver it tomorrow. Sounds like the kind of thing that is not sustainable. Yeah, as Newman would tell you, that pile of undelivered mail is going to get bigger and bigger and bigger and bigger and bigger. Which leads to the second big change he made, which was removing the mail sorting machines that, like, do all your envelope mail. Right. And the claim here is that deliveries by packages are way up these days, but actual envelope mail is down. However, in November,

ballots are delivered an envelope, so that's got to messed up. Because Jackaparly's got to get those hair clippers, you got to get those hair clippers. Dude, let me tell you, I need hair cut. I think you look great, but it's okay. Now, the third impactful move by the post-Maport. Master General, he has removed thousands of blue mailboxes from street corners. Yeah, the ones that look like a cousin of R2 Deto. Those have been literally taken out thousands of times, except when public outrage over the weekend stopped that from happening. Right. That's not happening anymore, but they were taking out gigantic screwdrivers to unbolt these things from your street corner and take them away on a pickup truck. Jack and I are calling this right now. The Halloween costume of 2020 is the blue

mailbox. Agreed. Now, the shocking thing Jack and I noticed when researching this story for you, is that the post office has something every public company wishes it had. Get this. According to a Pew Research poll in April, 91% of Americans have a favorable view of the U.S. Postal Service. That's not brand love. That is brand passion. This is the most liked brand in history. Whip up Nike, Krispy Cream, and UNICEF into a smoothie, and that's the post office's brand love. So, Jack, what's the takeaway for our buddies over in the mailing industry? Damaging public institutions can also perversely boost businesses for private institutions. Snackers, that whole political war we just mentioned, turns out UPS and FedEx are the big winners.

The stocks of those private shippers are up 34% and 24% in the past two weeks. And you got mail piling up at post offices, delays are getting worse and they're getting worse. Naturally, people are thinking to themselves, if I want my mail delivered reliably, I'm not going to go to the post office because the post office's leadership is intentionally making the service worse. Which basically leaves you with just two alternatives to the post office. FedEx and UPS and they're both benefits. And D.HL, but like DHL is just for like shipping lumber. Oh, by the way, prime packages from Amazon, those could get delayed too because the USPS does like 30% of Amazon shipping. What happens to public institutions can affect private ones to. All right, Jack, I've been rehearsing

this for like three days now. Can you whip up the takeaways for us, please? Oh, I sure can. And Apple's second biggest profit puppy is under threat from Fortnite's boycott of the app tax. Apple and Google's app stores are basically public utilities. For our second story, Chili's restaurants are mostly emptied this pandemic, but it has disrupted itself. Its ghost kitchens have replaced friolators from ribs to just wings. For our third and final story, the post office is getting defunded right when it's most important to American democracy. And the Wall Street winners are FedEx and UPS, but we should all mail in our ballots as early as possible. We got to give Newman a break.

Now, time for our snack fact of the day. This one sent in all the way across the pond from Yoken Vinke and Loeffley Bruges Belgium. Turns out one out of four pieces of chocolate that you and I consume were made in one tiny town in Belgium. Yeah, it turns out Yoko was like an intern there. It's Weez Belgium where they produce a thousand tons of chocolate every day. Seems like a lot. He's like, yeah, I know. I know.

I call it the Belgian dip. Paul from a company called Barry Calabo. So that's been pumping this stuff out for like nearly 200 years. Now, think about that. Every fourth dessert you have, the raw materials are coming from Belgium. But before we go, Snackers, we want to wish a happy birthday to Snacker Jeff from Mount Laurel, New Jersey. And happy birthday to Nick from Lawrence, Kansas. And Ashton and Olga, a couple that snacks together got married on Saturday.

Happy second anniversary to Mark and April Holmes. And a second anniversary to Albert and Emily over in L.A. Steve and Susan are laughing at these second year anniversaries. They're celebrating their 33rd wedding anniversary down in Wurham, Waco, Texas. Not bad. It's a dry heat. Oh, by the way, happy first anniversary to Alexander Kravici. My wife, holy moly me oh my, you're the apple of my eye. Snackers, if you want to shout out in the pod, Jack and I are completely overwhelmed in our DMs. I spend like an hour and a day trying to catch up on their Instagram DMs. So we've actually changed it up. We would

love you complete a Google form if you want a shout out on the pod. Jack and I want to make this as easy as possible. So we put a link to that form right here in the podcast. description above where you're listening. Birthdays, anniversaries, graduations. If you want shoutouts, fill out that form. This has basically become our full-time job, to be honest. Awesome to be back. You all look fantastic.

Jack, you don't need a haircut you look great. I cannot wait to see it tomorrow. But if you have buddies that you see in the meantime, ask them H-Y-H-Y-S-D. Have you had your snacks daily? We'll see you tomorrow. If you know, you know. This is Jack. Nick owned stock of Apple and Chipotle.

of Amazon and Spotify. I don't even think we said Amazon today. 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.