The Best One Yet - “GameStop isn’t Blockbuster” — GameStop’s 100% week. Poshmark’s IPO outfit. Computer chips’ wild moment.

Episode Date: January 15, 2021

Poshmark pulled off the double-double IPO, but we don’t think it’s really an ecommerce company. GameStop’s stock (say 5 times fast) surged 100% in the last week, so we’re looking at why it’s no longer dead. And computer chips have never been in higher demand — and the industry has never seen so much drama.$POSH $GME $QCOMGot 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 Friday, January 15. We have a long weekend ahead of us, so we'll be back next on Tuesday. Yep, last pot until Tuesday, Monday, MLK Day markets are closed. Snacks Daily is closed. MLK is such a cute abbreviation. It's actually TRD MLKJ. Jack, break it down. What's the takeaway here? The Reverend Dr. Martin Luther King Jr. The only name's so great you had to use two breaths for this thing. In a tense moment for our country. It's a good day Monday to reflect on Dr. King's messages of love, unity, and peace. Yes, it is. And Snackers, today's podcast, the best one yet. Best one we've ever done. For our first story, Poshmark is the latest company to pull a double double on their IPO. Stock doubled twice because the clothing marketplace isn't really a clothing marketplace. For our second story, we have a new video game idea for GameStop. All right, get this, get this. It's a video game where GameStop stock dies.

and then it comes back to life. With a vengeance for our third and final story, computer chips are having an unprecedented moment. Funny thing Jack and I noticed here, the computer chip industry, starting to look a lot like the food chip industry. People are hungry? People are binging them? Yes, they are. People can't stop eating them.

That's all we got. We could have stopped it too. But Snackers, before we get to that wonderful mix of stories before the weekend, Jack and I noticed an unprecedented instance of justice. As everyone knows, 2020 was an unprecedented year for zuckings. Yes, it was. Zucking. It's a noun. Jack, the definition in a sentence. It's actually a gerund noun. It is when Facebook flagrantly copies your idea and then scales it to billions of people. But get this, Snackers, for the first time ever, justice was just fully served on zucking 4,000 miles away from us. That's right. We have a stage two zucking.

which was charged, convicted, and rectified over in Milan, Italy. Okay, so this wild story, it actually goes back to 2017. That's when Facebook launched a neat little feature called Nearby. Nearby tells you what shops, bars, or restaurants are nearby. Jack, funny thing, because that sounds a lot like an Italian app called Far Around. Far Around tells you what shops, bars, or restaurants are nearby. If so facto, Facebook now has to pay that Italian entrepreneur a cool $5 million. for Zucking far around.

It was a blatant Zucking, and for more justice to be served like this Snackers, we have a public service announcement for you. If you see Zucking, say Zuckin. 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. The snacks are about to hear ain't food. It's ear candy.

They don't reflect the views of the robberhood family. It's all informational just so. We're not recommending any securities. Nope. It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible. Business news for you.

Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Poshmark just pulled off the double-double IP. The old double-double when your stock price doubles and then doubles again. But in this case, it's on a double trend. They're hoping for the double trend. Now, Poshmark Snackers, here's how the numbers broke down. stock jumped over 140% on their first day swimming in the public markets. How much are they worth them? There were $3 billion, which is like a third of a lift. Not too shabby. Jack and I jumped in snack style.

We basically spent all of yesterday in their S1 IPO paperwork. Hilarious situation going on on page two. We were also texting about the GameStop story, which comes next. But on page two of Poshmark's S1, they defined like three different generations, just in case you weren't sure. They're like Gen Z, generation born between 1996 and 2010. I made it by six years. Millennials, generation born between 1980 and 1995. Did they mention the silent generation? Ironically, they said nothing on it, but then they went on to describe boomers. It was amazing.

For those who don't know, Poshmark is an online marketplace for secondhand clothing. Like eBay, bumped into H&M and became an app. So picture, if you're going on Poshmark, you can go to the app or the website. It's basically a digital fleam market. You're going to scroll through, you're going to see a $12, Ohio State, long-sleeve t-shirt. That's what Nick saw, and I asked him, is it a Woody Hayes-era vintage, like 1981 long-sleeve tea? No, it was kind of just like a beat t-shirt. It was pretty brutal-looking. I was hoping there were grass stains on it. You might also bump into an $85-dollar Levi's 501 gene

mom-gene style. This company, Poshmark is basically like T.J. Max is how we're thinking of. You get the satisfaction of a treasure hunt, but your thumb is getting a workout, not your legs. And here's how Poshmark fits into the whole fashion ecosystem. About five years ago, the world was focused on fast fashion. It was all about Forever 21, who was offering like $12 jeans that basically fell apart in six months. Well, over the last six months, Forever 21 has gone bankrupt and thrifting is the new fast fashion. Thrifting secondhand. The Real Real is a secondhand online marketplace that has already gone public and the stock has quadrupled during the pandemic. Yeah, another player in this game, Jack and I like to look at Thread Up and they're planning

to IPO sometime like later this year. Posh Mark started trading yesterday and it has one key difference. It's decentralized. There's no inventory of clothing that Poshmark hangs on to. All that Poshmark is doing is connecting the buyers and the sellers and then snagging a little 20% fee as you're trying on the clothes in the back room. Think of it more like Airbnb, less like the gap. They don't actually hold inventory. They don't validate that the dress is actually the dress that the person who's selling it says it is. They're just like, hey, hands free, we're not involved. You're going to buy that T or you're not going to buy that T? Now that presents a risk. You might be looking at that $180

Gucci dress. You think it's a steal, but it could show up at your door. You open it up, it's actually a Fuji dress. It's a Fuji dress. It's been a Fuji the whole time. They don't verify. Add all that up,

and Poshmark brought in $193 million in revenue in the first three months of 2020, solidly up 28% from the previous year. That's not that good growth for a tech company, but it's a good profit for a tech company. Any profit is a good profit for a tech company.

They also squeezed a nice little 21 million dollar profit out of all those jeans. So Jack, what's the takeaway for our buddies over at Poshmark? Don't compare Poshmark to fashion or to e-commerce. This is a social media company. Snackers, as Jack and I were hanging out in that IPO paperwork, we did the old Command F to see what was going on. Jack, how many times did Poshmark mention the word fashion in their IPO paperwork?

Ohio State T-shirt, mom jeans from Levi's, Gucci dress, probably a thousand. No, 11 times they mentioned fashion. Jack, how many times did they mention the word clothes in their IPO paperwork? A paltry two times. How about sustainability? Nine times, Nick. Nine times. Not that many.

No, but how many times did Poshmark mention social in their IPO paperwork? I'm looking at the number. It must be a typo. This is weird. This is awkward. 188 times this clothing company mentioned social. Poshmark is basically a visual fashion news feed with a big body. button smack right in the middle. Get this, 87% of all purchases on Poshmark were preceded

just like Instagram with a like Oricom. That is wild. And the average user, they're spending 27 minutes a day scrolling through Poshmark, which led to a whopping 20.5 billion social interactions on the platform. For 27 minutes a day, dudes are treasure hunting to find that 90s era vintage Michigan basketball sweatsuit pullover thing. So Snackers, if you're looking at Poshmark, don't compare it to the real, real or thread up. Compared to Instagram or TikTok, which also takes a ton of your time scrolling. For our second story, GameStop kind of looked like Blockbuster for a while and was like, it was heading for bankruptcy.

It's not bankrupt, though. That's why we're looking at GameStop stock pop. Jack, can you say that again? I cannot say that again. No, you can. Snackers, if you can say GameStop stock pop, send us a video. We want to hear it three times fast. Don't even bother with five.

Snackers, there was a time when 9,000 Blockbuster video locations, peppered every strip mall off of I-90 whatever in the United States. Yeah, you'd be driving down the highway, you could see it. They'd have it look like, it looked like the video cassette that someone took a bite out of. I think it, I thought it was a movie ticket, actually. Like a ticket stuff. Yeah, I guess it was a movie ticket. Now, Americans, we used to venture out for hours to basically go to Blockbuster and argue about which you grant DVD we should rent. Are we doing sleepless in Seattle? Or are we doing you got mail? Early snack fact here. More relationships.

ended at Blockbuster than at any other retailer in the United States. So true. GameStop seemed to serve a similar role to society. Yeah, they had 5,000, I'm sorry, they have 5,000 locations, but video games instead of movies, pretty straightforward. Right. And as movies went to streaming, Blockbuster went bankrupt. We all remember. A bunch of investors figured out, hey, you know what? The same thing? Kind of happening over at GameStop right now. Yeah, but with video games instead of movies. So the stock of GameStop steadily declined from $62 back in 2007 to $3 this past April. But then Snackers, just recently, something happened. We thought GameStop was dead. Yeah. And then it's finger wiggled. Yeah, this happened in December. Chewy. One of Chewy's co-founders,

you know, the pet retailer online that we apparently talk about on like every podcast lately, one of their co-founders bought 12.9% of GameStop stop. It wasn't even that expensive because the stock price was so low. It's true, it wasn't that hard. And that Chewy guy's big acquisition, that signaled to investors, a pivot for GameStop online, since Chewy is basically the Amazon of Animal Stuff. And then something else happened. Then one of Gamestock's eyes opened.

That was this past Monday when GameStop announced that e-commerce sales over the holidays quadrupled. Yeah. And then I think I saw it blinkjack. Then Gamestock stood up like a Frankenstein situation. Reorganization, the Chewy co-founder became on the board of directors and two of his buddies joined the GameStop board too. Boom, result of that, four of Gamestock's brick and mortar old school board members, they end up getting kicked out. New school's in, old schools out.

So GameStop stock kind of came alive, but then GameStop stock rose 57% on Wednesday, by the way, that was hard. That's right. There was a resurrection of both our figurative metaphor and a GameStop stock. And we think this rise on Wednesday really had to do with a short squeeze. That's what we think. Thousands of investors thought GameStop was going bankrupt, so they placed short investments on the stock hoping that GameStop's price would fall. And that was offset by a whole posse of retail investors who were redditing about GameStop's comeback. Yeah. And the Reddlers were right. When GameStop stock rose short sellers on the other side who were hoping it would fall,

they had to buy the stock to end their failing bet. And that caused GameStop stock to rise even higher in a self-reinforcing cascading flurry of buy orders. And that is how GameStop stock is up seven times higher yesterday than it was in August. So Jack, what's the takeaway for our buddies over at GameStop stock? The board reveals the ambition, Snackers. Yep.

People are playing more video games than ever right now, but it's all being done digitally. You're paying 50 bucks for Red Dead Redemption. too, but you're doing it by downloading it online. You don't need to visit GameStop. Yeah, and other games, they're literally free to stream. You just pay for like the swag and the dance moves once you're paying the game. GameStop's new board knows all this. That's why they're focused on selling physical gaming consoles like PlayStation 5 that you can't order online and pre-owned video gaming consoles too. Yeah, and the new Chewy board member, he's going to accelerate the whole

transformation to digital sales only online. They hope to boost the relationship with hardcore gamers through a rewards program and through e-sports. The board of GameStop focused online, so the company GameStop is going to focus online. And investors think GameStop is a little more like Chewy now. For our third and final story, the chip industry has never been in more demand. The chip industry also has a dramatic headline every day this year, it seems. It's kind of insane, but Snackers, this story, like all good stories, honestly, Jack, it begins in Louisville, Kentucky. The home of Jack Daniels, Chek. Muhammad Ali.

True, true. And a Ford Motor Company factory that makes the Ford escape. Not just any Ford Motor factory, a pretty big one, but get this, Snackers, that factory just suddenly, out of nowhere, it just shut down temporarily. 3,800 Ford workers are at home instead of working.

They're actually getting paid 75% of normal wages. Jack, are they out of carburetors? Nope. Jack, are they out of chassis? Plenty of chassis. Okay, turns out Snackers, what are they out of jackers? what do they add to jack? Computer chips.

The average car snackers uses 50 to 100 computer chips. And while you're shocked by that number, guess what? You're also to blame for this issue. Yes, because all the work from homing going on all over the place, it ate up all the computer chips in the market.

It ate up all the chips. You got laptops, Chromebooks, PlayStation's, the new 5G phone. All those things are eating up computer chips. Carmakers, on the other hand, they didn't expect many sales this year, but then sales for cars rebounded big time and they were short on chips.

So while most of us never really think about chips that often, chips have never been in more demand, and they're causing some freakouts. A whole bunch of drama in chips. But first of all, Nick, last year, if you needed like a big box of chips for your car factory, it would take two months for them to arrive. This year, you're going to have to wait six months.

We're talking like beanie baby levels of waiting on this stuff. That's why there's so much drama. Intel just fired their CEO while Qualcomm bought up a chip-making startup. But then Intel sold off part of it. its core business while AMD splurged on another chip company. It's all about chips. And on the surge in demand for this product, the biggest chip companies, Nvidia, Qualcomm, and AMD, their stocks have nearly doubled in the past year. Meanwhile, Apple's looking at this whole situation and Apple's like, hey, we kind of depend on chips. We're not going to deal with this kind of drama. They don't want to

get in the rat race, so they're making their own computer chip. It's called the M1. So Jack, what's the takeaway for all these chip stuff over in the chip industry? The computer chip industry is just like the beverage industry. There's different shelves. Snackers, you tend to think of chips like oil. You got like every barrel that's the same. No one's special. No one's getting a participation trophy. You think chips are a commodity, but we're actually seeing a beverage style top shelf, middle shelf, bottom shelf hierarchy evolve in these silicon products. So every chip company is seeing record sales right now, which begs the question, Jack, why is Qualcomm stock up 70% and yet Intel stock is down. It's because Qualcomm focuses on only the highest shelf liquor chips, the ones that are in

the highest demand this year. We're talking the champains of chips. Qualcomm is the leader in 5G modems for next generation internet connected devices. In fact, two years ago, Qualcomm stopped making server chips, which are like just basic chips. They're like the bud light of chips so it could focus on the champagne of chips. So while all the chip companies are enjoying record sales because everything needs chip these days, It's the ones making the high-end 5G versions they're pulling ahead of the pack. Jack, can you whip up the takeaways for us before the weekend? Poshmark stock got an extremely warm embrace by Wall Street on its IPO. I know you want to say GameStop stock, by the way.

It's the fashion company that's actually a social media company. That's how you got to think of it. Our second story, GameStop was doomed to be Blockbuster. Instead, it's pivoting. GameStop. It's getting chewified. That's what it's doing. For our third and final story, computer chips. They're basically in everything.

But it's the top shelf next-gen champagne computer chips that are pulling away from the entire pack. Now, time for our snack fact of the day. This one sent in by legendary snack fact snacker, Kelsey Black in lovely Austin, Texas. Turns out Martin Luther King Jr. was born as Michael. Michael King Jr. No Martin, no Luther. That was his real name. When MLK, when Michael King Jr. was five years old, his father, a pastor, ended up traveling

to Germany. He traveled to Germany to learn about the Protestant Reformation leader Martin Luther. And he became so enamored with Martin Luther that he ended up changing his own name at the age of like 40 years old and his son's name. That's right. At five years old, Martin King Jr. became Martin Luther King Jr. And that's how the iconic name was born. Snackers, have a fantastic three-day weekend. Jack and I are going to miss you, but we're going to see you Tuesday. Happy Martin Luther King Day. We will see you Tuesday and remember his message. And before we go, Snackers, congrats to Cody Gutermote,

legendary guy and new job down in San Francisco. And happy birthday to Ethan Michael in Atlanta, Georgia. And Allison Bowden in San Francisco as well. And Laura Schultz in San Antonio, Texas. And Morrow Barron in Brea, California. And Roberto Baccarizo in Weston, Florida. And Christian Escobar in Dallas. And Tyler in Nashville.

And Brian Jay in Lockport, New York. And Mario Chigini in Pennsylvania. And Lindsay Drager in Chicago, Logistics. And thank you. to Annie in California, who shared snacks daily at her company, show, and tell. Also, congrats to Brandon and Savannah Stoller both passed their series exams over in Indianapolis, Indiana. Congratulations to Zach and Janelle, who just got engaged in New Hartford, Connecticut.

And Evan and Jesse Johnson, one-year anniversary down the street in San Francisco. And happy five years together to Jewel and Allison Chang in Pasadena, California. This is Jack. I own stock of Amazon, Nick on Stock 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, 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.