The Best One Yet - “Ghosted at the $16B wedding” — Louis Vuitton breaks up with Tiffany’s. Google’s Chromebooks kid strategy. Slack’s schlep moment.

Episode Date: September 10, 2020

That multi-billion dollar merger between Tiffany and luxury legend LVMH just got called off, but we’re questioning the excuse. Google’s Chromebooks are the back-to-school item getting snatched up by schools. And Slack stock fell 15% yesterday because we think it’s way more of a schlep than Zoom is.$WORK $TIF $GOOGWant 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. It is Thursday, September 10th. Nick, is that shirt extra extra slimpet? I feel like I'm going to break this thing. Snackers, we happen to have the best one yet today. This is a TBOI.

Jack, what do we got for the first story? Camel cigarettes got school kids hooked to cigarettes with a cartoon camel logo. And then Jewell got kids hooked on Mango Sorbet e-cigarettes. And then Google's got school kids hooked with a Chromebook. Second story, Jack. What do we got? LVMH, which is Louis Vuitton and Tiffany, set the date for a lovely $16 billion merger. Jack can never pronounce that MoA-N-S-C, Kelly, the M and the H.

I just skip it. LVMH just ran off the altar and it's canceling the deal. Nick, I just skipped the M-H at the end. It's the worst. For our third and final story, Zoom has been easy to adopt for companies and people during COVID, but Slack has been less so easy. So Jack and I are approaching Slack's latest earnings using the scientific method. But Snackers, before we get to that, we have an HR,

update, the latest hire at Ford Motor Company's transmission plant in Michigan goes by Fluffy. It's charming. It's the cute new co-worker slash office pet. This office pet has the power to destroy you. And that's because it is a robot dog created by the startup Boston Dynamics. Fluffy is a robotic dog with five cameras and 360-degree vision, so it literally has eyes on the back of its head. You know, the mechanical strength of a small elephant packed into this thing. I think they should market it as having the mechanical strength of a large bear rather than a small elephant. It can carry a cool 1,400 pounds, and it always sits, and it always stays. And it never has an accident.

Who's a good robot boy? So, Stackers, here's the thing. Ford's got one of these little robot dogs to stroll around its factory and, like, jump around corners for it. And then it laser scans 200,000 square feet of Ford's factory space. Jack and I got more curious. turns out before redesigning a plant, Ford's got a laser this whole thing, which used to take a human engineer three weeks, and Ford, a whole many millions in lost revenue. Fluffy only cost $75,000 the robotic dog, which is a fraction of the price, and it does it

in a fraction of the time. Fluffy's got some sharp edges, so they could just throw a sheepskin on this thing. It would be a lot less weird. Robots aren't just replacing human snackers. No. They're replacing our pets, too. Let's in our three stories. You're tuned in the snacks daily.

We spoke to the lawyers, and we got to get some. some legal out the way. The 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. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, the pandemic has been huge for laptops. And Google's secret profit puppy is winning it all. Chromebooks. All right, Snackers, we got to whip out the history books here. We've come a long way with the old laptop computer.

My first computer, I had to lift with my legs because it was a gateway. It was like two metric tons. The only computer with a cow theme. I think that's what they were going for there. And then compact laptops, I'm pretty sure doubled as a bulletproof like Storm Shield. Yeah, they were thick. Very Bruce Wayne. And then you had the dude you're getting a Dell guy.

Oh, it's going to cost $3,000. You better get a more. for that, Dell. But today, the laptop market has changed in ways that might surprise you. Turns out Chromebooks are officially becoming the unofficial laptop of COVID-19. Yeah, Jack, I noticed that because learning is happening remotely, schools have been snatching up just the cheapest laptop option out there for kids. And you know, Chromebooks are coming in at like 250 on the bottom end. This is like a skinny computer with no hard drive. It's basically a smushed Lego. It's a physical reincarnation of a Chrome web browser, that's about it. Oh, and if you're curious about getting one,

they're sold out. It's a five-month wait. Schools are snatching these up at such a rapid rate in preparation for distant learning that Chrome's global market share for computers has climbed to 10% from 8% last year. Which brought Jack and I to a key question we found fascinating. What tech company is actually dominating for laptops right now? The same tech company that was dominating for laptops 30 years ago, Nick, Microsoft. It turns out Microsoft makes its own laptops, but its Windows software still powers. Get this, 83% of laptops globally. We're not just talking about those surface tablets we're all seeing commercials for. Now, Dell, HP, Lenovo, most of them are running on Windows just like they were 30

years ago. Oh, and you look around a college philosophy class and see a lot of silver, rectangular Apple, MacBooks, not the winners. Macbooks have just a tiny market share. According to the information, just 7% of global computers are max. And that's because Apple has become the global club for high-income people who pay in to get the fancy Apple laptops. Remember, Snackers, for the rest of the world, they're using Windows or Android or Chromebook or something cheaper. So Jack, what's the takeaway for our buddies over at Google?

This is Operation Get Kids hooked on our Chromebooks. Snackers, most Chromebooks in the world, those belong to schools. Get this shocking stat. 69% of all the computers bought this, summer by K through 12 schools in preparation for remote learning? Yeah, we're Chromebooks. That's insane. 69%. Chromebooks have become like the modern day version of the old blue calculators used have to run out from the library. Did you have those two? They're like Ti like zero zero. The most sophisticated function on these things was all clearing before you could graduate

to the 83. You're not calculating absolute zero with those calculators. Now Alphabet, the company that owns Google, they benefit as kids start using Chrome and then seeing more Google ads. also benefiting, though, by hooking kids at an early age into the Google ecosystem. Because if you're Google docking and your Google driving and your Google Chromebooking since you were seven, you're going to live a different lifestyle potential. Yeah. If you've been hooked since you were seven, you're more likely to pick an Android over an iPhone when you turn 17 and finally get a phone. Maybe as early as your Keynes in the era. By the way, quick shout out to all the teachers out there, the new frontline workers of this country. For our second story, Louis Vuitton was supposed to

to merge with Tiffany's jewelry. But now the $16 billion wedding has been called off for reasons we are very skeptical of it. Jack Caterer was booked. Flowers were picked. The dress was ironed. I don't even ironed these things. Their dresses get ironed. They don't get ironed. But rings, they were fitted. Cancel the invitations, call the floors. The wedding is off. Snackers, one lovely year ago, French luxury giant LVMH pledged to acquire Tiffany's on one wonderful knee. LVMH, of course, being Louis Vuitton Moe Hennessy. It's a French luxury publicly traded giant. It literally sounds like a count. It does sound kind of Monte Cristo-ish. Now, the actual companies here, they had sent out the save the dates, Jack, the date, we circled that. Yeah, 16.2 billion dollar merger was going to be

wed on November 20th, 2020. That's when it was becoming official. But then, because of the trade war, a French minister asked to delay this marriage until December 31st. If anyone objects to Elvier and Tiffany's to be wedded today. Speak now or forever hold your peace. As a crazy third uncle gets up in the back says, well, I've got a story and I'm glad I have a platform now. Yeah, the French minister of France had an objection and asked to delay it for no apparent reason.

And if you thought that was dramatic, then things got more dramatic and nationalistic and parents got involved. Okay, so LVMH sent Tiffany's a letter, like CEO to CEO. And in that letter, LVMH basically blamed the breakup on France and their government officials. France basically told LVMH, we want you to take part in our country's efforts to defend our national interests. What national interests, you ask? Well,

France is mad at the Trump administration who is threatening to tax French wine, tax French cheese, and tax French perfume as it comes to the United States, aka 150% of what France exports. So LVMH is literally like, we don't want to calculate the tariffs that the Trump administration is going to put on like the diamond rings. So we don't want to buy your company anymore because of the tariffs. And then Tiffany's looking at the situation now and they're like, uh, we don't want to stay single and we've already told everyone that we're taken. So it filed a lawsuit in Delaware saying the French government has unfairly intervened. But literally they have a lot of lawyers working on this. There are a lot of clocks ticking on this situation. Needless to say, this was bad news for Tiffany

the company. So the stock fell by 6% yesterday. So Jack, what's the takeaway for our buddies? over Tiffany's. This isn't about a trade war, Nick. No, it's not. This is simply about not wanting to overpay for Tiffany's. Snackers, during this whole long engagement, Tiffany's sales have plunged a whopping 44%. We got fewer weddings right now, which means fewer Tiffany's $20,000 platinum engagement rings. Oh, Tiffany's looking at the situation, they're not expecting sales to rebound from 2019 levels until 2022. Also, Chinese tourists aren't coming to the U.S. They're not popping into the Fifth Avenue Tiffany's flagship store, and they're not stuff in handbag. into their suitcases to go back to China.

Yeah, sales to Chinese travelers are actually like a key part of Tiffany's business. LVMH is looking at the $16 billion price tag that they agreed to. Brutal. And they realize Tiffany's just isn't worth that anymore because of COVID-19. And Jack and I are realizing that a lot of pre-COVID acquisition offers are getting kind of revoked right now post-COVID. For our third and final story, Slack was supposed to be a major COVID work from a winner, but it wasn't.

The evidence is in, and it's just a work-from-home okayer. So Jack and I were looking at Slack, and we noticed that Wall Street sometimes acts like a scientist. After Tom Hanks got sick, brutal. The NBA postponed their season. Awful. And the president finally declared a national emergency. Yeah, investors grabbed their bunsen burners and came up with a hypothesis. Yes.

Their hypothesis, with offices closed for an extended period of time, Slack would benefit and business would grow. And that's because Slack is basically a work-appropriate platform for sending direct messages. It's LinkedIn meets AOL Instant Messenger. And if you're not on Slack, there are few ways you can use Slack. Like you can send company-wide direct messages, DMs. Which sounds more like an IDM, an indirect message if it's company-wide. Oh, hey, Brad, can you give Susie this feedback for me? I'm going to send it to you first.

Exactly, an indirect message. Or you can just use DMs within your own team. That basically replicates like a quarterback with his 10 teammates in a huddle situation. Less touch you more feeling. Or you can just Slack among people your company who happen to also love puppies. That's right. Every Slack company has a channel for puppy parents. It's obligatory.

Now, since meetings in person can't happen, companies will sign up for this new messaging service is what was the hypothesis. That was the hypothesis. And certain investors were so confident in that hypothesis that they made a big bet on Slack's stock. And Slack stock rose from $25 on March 10th to $40 on June. And 3rd. Now, yesterday, we finally got the results of this work-from-home experiment in the second quarter earnings report of Slack. Slack's revenues were $215 million from May to July, which is up a whopping 49% from the same period last year. Forty-nine percent growth sounds good next. Sounds great,

Jack. But here's the thing. Slack grew 57% in the same period last year when there was no COVID-19. So get this, Snackers. Slack is now growing slower during. work from home than it was before work from home was even a thing. Now, did Slack rescue our hypothesis in their forecast for the rest of the year? Absolutely not. No. They said the rest of the year, their growth will decelerate to 32 percent, even slower than before. Jack, I think we have now reversed the null of the hypothesis. We're rejecting the null. And if we go down from the abstract to check out the conclusion here, it looks like COVID and work from home have not been good for Slack's business. So what did Wall Street do after learning that

their hypothesis was incorrect, they erased the COVID bump that it gave to the stock back in March. What any rational scientists would do, Slack stock fell 15% yesterday, ending up back at $25 where it was, when Jack? March 10th, exactly where it was on March 10th. So Jack, what's the takeaway for our buddies over at Slack? Companies are too busy right now to switch to a new messaging service. Honestly, Snackers, we thought Slack and Zoom would both benefit similarly from work from home. Zoom's business has grown from an adorable hedgehog before COVID to a giant rhinoceros of activity post-cote. Half your day is working on your RZF, you're resting Zoom face. We all do it.

Now, Zoom, Nick and I think, is easy for companies to set up. Just think about it. You pay for the corporate account, you schedule a meeting, and boom, you share a link. Boom. You're a Zoom company? Low switching cost for Zoom. But Slack isn't as easy because you need to educate your entire company on how to use Slack. What's a hashtag? What's a channel? What's a ping? What's a bot? What's a DM? thread, what's a GIF, what's a Slack moji? This requires a behavioral revolution to wean all your employees away from email and then they start saying, is it GIF or GIF or GIF? And that's a whole other thing. You know, Eric from compliance is going to keep trying to use email for like six

months into the job, aka you got high switching costs. Zoom is as easy as buying a new coffee machine for the office. But Slack feels like a major kitchen renovation. Jack, can you whip up the takeaways for us over there? Google's secret profit puppy just might be those Chrome. books. They're adorable and they're infiltrating our children's minds through schools. Louis Vuitton and Tiffany's was going to top the Cleary Wedding in terms of those great crapcakes. Great crap cakes. But the deal got called off because Tiffany's just isn't worth $16 billion right now. For our third and final story, Slack was expected to be a work from home winner. But it wasn't. So Wall Street erased that entire COVID bump that it gave the stock back in March. Now time for our snack fact today. This one tweeted

in from like the exact center of the country from Wichita, Kansas, from Katie Johnson. Shocker, no pun intended. Wichita, Kansas is actually the airplane capital of the world. Yeah, you thought it was Kitty Hawk, North Carolina. Maybe you thought it was Ohio. Maybe you thought it was the air. Maybe you thought it was Washington where all those Boeing plants are, but actually 35% of all airplanes built in the United States comes from Wichita, Kansas. The old I-35 corridor, basically the very middle of the country. They don't have a Boeing plant, but they have a have spirit aerosystems, which makes the chassis of the Boeing airplane. Best part of the airplane.

But Snackers, before we go, congratulations to Armin and Rihanna engaged in Iceland, bold move, Armand. Happy 15th anniversary to Harry Berthau and Gloria. And Kyle and Michelle matched out with their own 15th anniversary. And happy birthday to Andy Cole in Sugar Hill, Georgia. And to Scott Lorsch in Scottsdale, Arizona, Arthur, it's Scott from Scottsdale. And to Jotten Pritmani in Abu Dhabi. And a loon jope in White Plains, New York. K.J. Welcher in Augusta, Georgia.

And Meg Ross in Boston, Massachusetts. And Tracy Loughlin in Charlotte, North Carolina. And Michael Christine in Westport, Connecticut. And Colton, he's like McLevin, no last name, in Salt Lake City, Utah. Samit Savla, definitely last name in San Jose, California. Vanessa Nominson, Seattle, Washington. Happy birthday. And congrats to the graduating Oxford MBA class 20-60, 64 nationalities, all pretty much listening to Snacks Daily. Now, Nick, before we go, we mentioned earlier that Mission, Mission,

produce was the first ever pure play avocado company. But then snacker Lisa Mueller pointed out to us, there's also Calavo growers who's been in business for 100 years and a publicly traded stock for the last 20. Snackers, remember, you're the best way to help us grow by asking your buddies H-Y-H-Y-S-D. And then tell your buddies, have you had your snacks daily? It's a question. Nick and I'll see you tomorrow. Have a great Thursday. We can't wait. If you know, you know. This is Jack, 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, 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.