The Best One Yet - 🎮 “GameStop’s rebuilding season” — Theranos' trial. Beauty Pie’s insane loyalty. GameStop’s new team.

Episode Date: September 9, 2021

Elizabeth Holmes put on her finest black turtleneck for the 1st day of the Theranos fraud trial. GameStop is rebuilding its team with more roster moves than the Mets. And Beauty Pie raised $100M as the “Costco of Cosmetics” because it has the most insane customer loyalty we’ve ever seen.$GME $LVMUYGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn 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 Thursday, the new Friday, September 9th. This podcast. Oh, Jack. I know what you're thinking. I know what you.

This podcast. Talk to me, Jack. Preach. Please tell us. The best one. It's the best one yet. Jack, TB.O.Y. What's our first story today?

Elizabeth Holmes, entrepreneur, founder, defendant. By the way, our tone really pulled a 180 on that one. Snackers, we're looking at day number one of the biggest trial in Silicon Valley history. For our second story, Beauty Pie. is the Costco of high-end skin care. Here's the thing. Once you join Beauty Pies Club, you don't leave Beauty Pies Club. For our third and final story, GameStop just announced earnings.

But we're looking at the executive roster of GameStop. Yeah, because GameStop, they've rebuilt their team like the Mets. Not better than the Mets. Like the Mets should rebuild. Honestly, the Mets, you should pay attention to this. You should do some of this. Nick, some uncle in Queens has just about had it with your Mets talk. And there we go.

We lost a list. But Snackers, before you hit those three wonderful stories. Wonderful. Honestly, I didn't see the mix today coming jack. Didn't see any of this mix coming today. Did you just buy a mattress? Because Snackers, if you did just buy a mattress, it's probably because you were influenced by some influencer.

You got influenced. And we've all seen influencers on social media. On average, they're about 24 years old, and they wear a lot of rose gold. And they got a bunch of succulents. And they're obsessed with their Frenchie named Hamlin. Who's that good boy? Who's a good boy?

New thing, though, not influencers. Grand Fluencers. We repeat Snackers, not influencers, grandfluensers. Our grand fluencer is an influencer on social media, who's over 70. And getting more likes than all of us. Hashtag ad, hashtag AARP, Jack.

Juan McDonald, Grandfluencer, 71 years old, she's a senior sipp fluencer. Yes, she is. And this older lady, Joan, she used to battle high cholesterol. Now Joan is raking in 1.4 million followers on Instagram because her cardio workouts have fixed her kidneys. Okay, she's one grand influencer.

Here's another one, Jack and I found. Ligetta Wayne, 78 years old. Ligetta runs the TikTok account, Mrs. Grandma's Garden. And Jack, you know that her last TikTok video for her tomato patch? You know how many likes that got? 38,000. 38,000 likes for a tomato patch. That's more likes than my cumulative social media history.

Yeah, combined with my cumulative too on that one. The real influencers aren't cutting lines. at some Soho tequila class. Snackers, the real influencers? They're playing Bocci at Del Boccov East at 3 p.m. Live streaming to a million fans. Grand Fluencing at 80. It's the new influencing at 20.

Let's in our three stories. Let's hit. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about the hearing food is 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 about security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Jack, we should win our suits for this one.

Yesterday, Elizabeth Holmes, her fraud trial began. Theranos. Yeah. A revolutionary company that wasn't. That sounds like the subtitle to a lot of juicy stuff. Jonathan Grisham wrote this story. There you go. Full story.

on us, want to go front to back cover. Snackers, this business tale is so juicy. So juicy. There's a book about it. A documentary, a miniseries, and a movie is coming. Yeah, they got like a DVD cassette tape going too, because the person who started this whole thing isn't going to get any of that. That person is Elizabeth Holmes, whose life goal was to be like Steve Jobs.

Yeah, basically, she was kind of like a Halloween costume gone bad, beginning with when she went to Stanford. Gone Breaking Bad. Yeah. She went to Stanford and dropped out, just like Steve Jobs dropped out. And then she wore a black turtleneck. That was her item of choice to wear on a daily basis. Fortune magazine, Bloomberg magazine.

She's always wearing the black turtleneck and always holding a little thing of blood. Yes, she loves that pincer move with her fingers. That's right. And she also dropped her voice to try to sound like Steve Jobs. This is true. If you were at all hands at her company Theronhaus, you were going to hear about it in a baritone, low baritone. And reportedly, she doesn't blink her eyes. Yeah. This is a very strategic negotiating move. Not a Steve Jobs thing, but I'm just kind of intimidating. All right. So instead of

inventing the iPhone like Steve Jobs, Elizabeth Holmes invented a machine that can test blood for diseases and it was revolutionary. Yeah. Can you break down like what's going on here? What's the problem? Because there was a problem she was solving, a big problem. Well, blood testing is painful. Yep. It's stressful. It's expensive. It's expensive. it's time-consuming. And Elizabeth's solution, you know, I don't want to sound all venture capital down in Silicon Valley on this. It was very elegant, Jack. Very elegant. With the Theranos diagnostic testing machine, you could test for 250 different diseases with just one drop of blood. Unreal. And Elizabeth Holmes, after she invented this, she convinced everyone it was capable of this.

Amazing. We should have been air quoting invented the whole time, by the way. But we'll get into that in a second. Superstar venture capitalists were fighting each other to give Elizabeth Holmes a bigger check. I mean, how much money were they printed out for her, Jack? She got $700 million of funding, which earned a $9 billion dollar valuation for Theranos. Jack, she was doing TED talks on her own TED talks. That's how popular she was. This was peak Theranos back in 2015.

And $9 billion at the time, that made Theranos the 10th most valuable private startup in the world. And then on top of that, Walgreens signed. a partnership with Theranos to blow the company up even more. That was the distribution deal that was really going to make this mainstream. But here's the thing, Snackers. What she convinced everyone of about this company, Theranos, was allegedly a big lie. The facade started cracking, thanks to deep, incredible reporting by the Wall Street Journal's John Kerry Rue. Yeah, turns out those machines we just mentioned the elegant, beautiful, seamless machines. They didn't work. They didn't work. Yeah. When Theranos was tested,

testing blood from customers, they actually went into the back and did it in an old school blood testing machine that wasn't even theirs. They're like, Bob, give me this sample. I got run over here. It's like, check out this easy bake oven pizza I baked. And they're like, what's that wood hearth fire oven you got oven at? Distraction, distraction. Let's just, just don't look over there.

Now, the SEC, which is the police of Wall Street, they agreed with these allegations and charged Elizabeth Holmes and her boyfriend slash co-conspirator of, and I quote, Quote, massive fraud. Well, the trial just kicked off yesterday and she pled not guilty. She says the company just failed. But the investors knew the risks and they lost money. That's not her fault. Well, if convicted, she faces up to 20 years in prison, $2.7 million in fine, restitution

to victims. And she has to listen to our snacks. Takeaway. Jack, what's the takeaway for our buddies over at Theronus? Investors got burned. Yeah. But the investor community hasn't learned. There's nothing you like more than a good.

That was really good, though. That was really good. Snackers, Holmes. She was the perfect storyteller. She didn't let the facts get in the way of the truth that should have been told. Ha! Kind of sounds like Adam Newman at we work back in 2019. Yeah, kind of sounds like Trevor Milton and Nicola in 2021. Blockbuster video, be kind. Let's rewind 20 years. This sounds like Max Skilling at Enron. Now this court case, it's expected to last three months. We're going to get some Netflix-worthy, juicy drama details about Elizabeth Holmes's alleged lies and investors enabling those lies by funding her. But Snackers, remember this.

Sometimes great storytellers are just telling stories. For our second story, this one's wild. Beauty Pie just became a makeup unicorn. I just realized it rhymes with cutie pie. It does. It does. You're right. Beauty Pie, though, most companies have minimum order size.

Beauty Pie has maximum order sizes. That's a real thing, apparently. By the way, Jack, we should let people in on like a dirty little secret about the beauty industry. Yes, it's one of the highest price markups in all of retail is beauty products. Yeah, Beauty Pie says the beauty industry actually has an average 10 times markup on prices that you're seeing. You bought a $50 sleep mask. It only cost $5 to produce that sleep mask. I mean, Jack, I'm looking at my night cream right now.

It's basically water and grape seed. Bring us to London Bay. Beauty Pie, which is now rumored to be worth $1 billion after the latest fundraise. And honestly, the key, the competitive advantage to this company is industry connections. The founder is Marcia Kilgore, who knows people who can hook her up with fancy perfume and lipstick at the wholesale price. Now, Jack did say fancy perfume and lipstick, but the way we like to think of this is this company, it's the Costco of cosmetics when you get down to it.

Yeah, they have a buyer's club business model. You can only buy if you pay the annual membership fee. And like Costco, you pay $60 bucks a year for the membership to Beauty Pie to get that rare moisture serum that you've been craving. Treat yourself. And like Costco, Beauty Pie offers high-quality products just as good as the competition. Now, the key also like Costco, is that Beauty Pie is offering a way lower price on the same products that are much higher priced everywhere else.

Beauty Pie offers the same sleep mask as Sephora. Exact same one. But it's about a quarter of the price. It's 12 bucks, not 50. Slimmer profits, but bigger sales. That's the goal. Now, get this, Snackers. This is wild.

Beauty Pie grew so fast by limiting how much customers could buy from it. This is what Jack and I find fascinating about PewDie Pie. They wouldn't let you buy more stuff from Beauty Pie. They're basically like, we got such a good deal. I'm sorry, we're limiting it to one per customer. Yeah. Now, these days, they don't limit anymore. That was just the first year.

But the results were insane. According to one VC investor that just invested, we have never seen such customer retention like this before. Again, Beauty Pie wouldn't let you buy more stuff from Beauty Pie and yet they say their customers are more loyal than you are to Netflix or Spotify. Tasha is more devoted to Beauty Pie than she is to her friend. Yeah, she skips brunch. She orders blush. How, though? And why, though?

Feels like a takeaway moment. Jack, what's the takeaway for our buddies over at Beauty Pie? Everyone wants to be part of the in crowd. Snackers, some of the greatest value. A company can create. It's making a customer feel in on something. Nick, you want to know a secret? Talk to me.

Oh, Nick, you want an invitation to that party? Oh, Nick, you want to know that exclusive promo code? Don't tell anybody. Stop the pod. Just give me the answers already. That insider feeling Nick has right now, it transcends industries and it transcends demographics. Case and point, both Jacks and my mother-in-laws, they love. Costco's prime rib because it's access to a top brand, but they're getting that same brand at a lower

price. Jack, I like how you brazed this chicken. You could have got it for half the price at Costco. And it's just as good. And your little cousin, she loves Beauty Pie's eye shadow because it's from the same luxury factory as Sephora's, but without the markup. The insane customer retention that Beauty Pie has achieved, it's not because the brand, the packaging or the quality of the products. It's from making you feel like an insider. Don't tell anyone, I've got a sweet deal for you. For our third and final story, GameStop stock, it dipped after another loss, but it's still up a thousand percent this year. We should point that out.

GameStop and AMC. Yeah. Not the same. Okay, a little more context to sprinkle on here. The stock is only up 3% in the last six months. But it's still up a thousand percent in 2021. So things are really good. It's always worth sprinkling that on as well.

Most analysts, though, who cover the stock and, like, you know, try to see how it's doing. They kind of tapped out lately. Because of that, I'm out. One analyst said he stopped covering it because the stock price is, quote, unquote, completely disconnected from the fundamentals of the company. Okay. But what happened last quarter? Their first earnings report in a quarter. Very exciting.

Sales rose by 25% to $1.2 billion. There you go. They paid off all the debt they have. Mazel tov. But they still lost money and the stock price fell after the report. But Snackers, here's what Jack and I found. find fascinating about GameStop right now. GameStop, kind of pulling a 1985 Chicago Bulls. GameStop's pulling a mid-20 teens Houston Astros or the Oakland Athletics always.

GameStop is doing what every half of every league does every summer. They're rebuilding the entire team. Right. GameStop's giving up one veteran player for three rookies and six second round draft back. Yeah, they need a new goalie and the fourth rounder is not going to come in in time. So Westbrook to the Lakers? GameStop hasn't made a few hires, Nick. No. They have 80 new managers with tech experience at GameStop. Oh, wait.

Snackers, it didn't stop there. GameStop popped over to Seattle and decided to poach some of Amazon's finest. This summer alone, GameStop has hired a new CEO, CFO, CTO, C-O, and CGO. I don't even know what a C-G-O is. I think it's a chief growth officer, but I'm looking at the LinkedIn's right now. They all have Amazon. But I know that all five of them are ex-Amazonians. They are.

It's going to be some awkward lunches. I know what table they're all sitting at. The Walmart guy's like, what about me? Meanwhile, Jeff Bezos, he goes up to space. He loses half of his buddies. There you go. And the chairman of the board at GameStop, also a techie. It's chewy.com's founder, Ryan Cohen, who has now amassed 13% of all of GameStop stock just for himself.

Now, Ryan hasn't given specific details as chairman of the board, the specific turnaround plan for GameStop. Generally, GameStop has said they want to pivot from the old school brick and mortars business model to new school Amazon style e-commerce. One thing we do know from Ryan, which you mentioned in June, was that you should prepare to, quote unquote, buckle up. So, Jack, what's the takeaway for our buddies over at GameStop? GameStop and AMC seem similar, but they're totally different.

Snackers, true. I mean, both AMC and GameStop, they face structural threats to their core. business models. AMC's threat is streaming video. And GameStop's threat is streaming video games. And despite tremendous threats to their businesses, a lot of threats. Both stocks are doing better than ever. And that is because they're both meme stocks, but that's where the similarities end right there. AMC isn't fundamentally changing anything about their business right now, despite that streaming direct to living room threat from Disney and Warner Brothers and all the movie studio. GameStop, though, is fundamentally changing everything from,

its executives to its physical buildings to just getting even more executives from Amazon. AMC and GameStop's stocks look similar. But one company wants to stay the same, the other wants to totally transform. Jack, can you whip up the takeaways for us over there? Theranos's founder, Elizabeth Holmes. She pled not guilty yesterday. Investors got burned, but as Jack is very excited for me to say, the community hasn't learned. Beauty Pie offers direct-to-consumer cosmetics, Costco. Yeah, beauty pie.

It makes you feel like an insider. That's key. For our third and final story, GameStop is still losing money, but looks more e-commerce every day. Yeah, AMC and GameSock, they seem kind of the same, but they're really not at all the same. Now, time for our snack fact of the day. This one tweeted in by Austin Jacobs from lovely state of California. Just finished up July and August, back-to-back 31-day months. Yeah, and what a lot of people may not realize is July was named after the Roman Emperor

Julius Caesar. And August was named after the Roman emperor Augustus. But here's the thing. Originally, there were 10 months in a year and then Roman astronomers like convinced those Roman emperors to change it to 12 months for some mathematical reasons. So Julius was like dibs on 31 days and July got 31 days. And then Augustus was like, I don't know, look smaller than Julius. Yeah. This is a real reenactment. Give me an extra day. I want to be 31 too. So literally Augustus got 31 days for August. And they stole both those days from Facebook. February, apparently. Yeah.

February got the short end of the steak. And Emperor February got totally screwed over. Snackers, you look fantastic today. If you haven't yet, the best way we can grow, tell a buddy about snacks. Ask them, H-Y-H-Y-S-D. The second best way we can grow. Give us a five-star rating if you're listening on Apple

and follow us if you're listening on Spotify. Have you had your snacks daily? Nick and I'll see you tomorrow. If you know, you know. And before we go, congratulations to Snack. Nacker Johnny Henderson graduated from helicopter flight school over the weekend. Fantastic. Congrats to Olga Kay, who just got a new job and came Paula, Uganda.

And Paul and Cecily just got engaged in Detroit. Let's see some ring picks. Happy friendversary to Alex and Rosa in the Gunk's New York. And congrats to legendary podcast host Mack and his girlfriend Eve on an anniversary down in D.C. Happy birthday to Robbie Shah in Elmhurst, Illinois. And Anna Gurdian down in Miami. And Ryan Levy was pulling a. Cal Ripkin, he's got a one-year streak of podcast listening. He doesn't intend to break.

Brian, we salute you. This is Jack. I own stock of Netflix. Nick and I both own stock of Spotify. And Nick on stock of Apple. Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors who are associated persons of Robin Hood Financial LLC and do not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates. They are meant for informational purposes only and are not a recommendation to buy or sell any security, cryptocurrency, or investment strategy in any account. This is not an offer or sale of a security,

not a research report, and is not intended to serve on the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robin Hood Markets Inc., Robin Hood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk,

including loss of principle and past performance, does not guarantee future results. Robin Hood Financial LLC, member FINRA, SIPC. Oh, looks smaller than Julia. us.