The Best One Yet - “GIPHY didn’t get Zuck’d” — McDonald’s post-corona playbook. Luckin’s scalding pivot. Facebook acquires Giphy.

Episode Date: May 18, 2020

Facebook needs to spice up its messaging game, so it’s splurging $400M to control your gif game: Buying Giphy. McDonald’s whipped up a 59-page playbook on how to reopen its restaurants post COVID-19. And remember Luckin Coffee’s $310M fraud last month? It’s pivoting its core biz because it’s more tech than latte.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, May 18th. Weekend highlight. Socially distanced B-Y-O-B-B party. Did you go meat-based ketchup on this thing?

Bring your own Beyond Burger. It was a socially distant barbecue. Had a great time. Now we got to disclose we own Beyond Meat stock. I didn't say Beyond Meat. I said Beyond Burger, but now we have to disclose it. Yes. I just did a polar plunge, nothing to disclose about it.

Don't you have to disclose that six-pack? I appreciate your rounding up. Up on that one, Jack. This Snackers is the best one yet for our first story. TBOY. You'll have one Big Mac, one large soft drink, and fries. Would you like an N95 mask with that? That all comes in the lunch special of the 59-page, Page Turner, playbook on how to reopen

all of McDonald's locations. Spoiler, McDonald's, we'll have to spend so much money on soap. They might as well just stay shut in our opinion. Snackers, we're looking at the big first movers to find the post-coron economy economy. For our second story, we have a dialogue. everyone, let's make sure fake news and Russian interference doesn't affect the 2020 election. Facebook. I'm proud to announce we just acquired Jiffy. I mean Giffy. Giffy is another hole in Facebook's acquisition belt along with WhatsApp, Oculus, and Instagram. It's just trying to connect people,

Jack. For our third and final story, Luckin coffee has been on parole since that $300 million fraud destroyed the stock last month. So true, aka fake bruise. So it's doing the logical next step. Yeah, you know, no big deal. Just pivoting the entire business model to become China's go-to-on-line convenience store instead. It tried to be the Starbucks of China. Now, it's trying to be the Amazon of China. Just another April over at Luckin. No, because we talked a lot, though, about the streaming wars.

Yep, the old two-syllable, two-vow royal rumble of streaming headliners. You got Hulu, Voodoo, Roku, Fubu, Pluto, Tivo, Quibby. Did I miss anything? No, no. But we just hit a new level in the streaming wars. Partnership Paloza. And Netflix just fired the first shot. Snackers, that's because our buddies over at Ben and Jerry's, Ben and Jerry, came out with a new flavor.

Ben and Jerry's with Netflix. The name of this pint of ice cream is Chip Happens. The description is a classic storyboarding work of Ben and Jerry's magic. They called a cold mess of chocolate ice cream with potato chips. Potato chips. This is a self-described limited botch, so get it fast. Hey, Ben and Jerry, bet you can't eat just a pun. Let's be honest, though.

They should have just called this flavor a typical quarantine. Tuesday now. There are enough calories in each scoop to get you through all three seasons of the crown with the historical outtakes. Netflix should start reminding people to stop hogging the pint between episodes. Are you still watching? Are you still eating that? Snackers, you're watching Netflix? Netflix is watching you too and it judges. Also, we're still waiting for that net leisure wear pajamas for watching Netflix. Read, we know you're listening. Call us. Let's get to 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 rain food. It's it.

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. 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.

Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Giffy just got acquired for a cool $400 million. By Facebook, which means Giffy didn't get zucked. They actually got acquired, which is like what you want Zuck to do to you.

Which is like a different way of getting sucked, though, Jack. Now, half the money, though, on this acquisition, we think was on the press release. Snickers, this thing is mesmerizing. They're more graphics in the press release than a George Lucas film. It is a gif within a gif. I couldn't stop looking at this thing. Jack's at T-Boy Jack on Twitter. I'm at Nick in New York.

We're both going to tweet this out. You're one, I want to look at this. Back in 1987, a year before Nick and I were born, the GIF was invented. Probably on a computer that was like 70,000 pounds. It also had a slight different name. It was then known as a GIF. Soft J, like the peanut butter. I before you accept after C or and followed by A were sounding like Giffy. But then basically Giffy's co-founder has essentially changed it to a hard G since then as of 2016, and now it is GIF graphics interchange format.

The first line, though, in the press release, when Facebook announced it was acquiring Giffy. Giffy makes everyday conversations more entertaining. And you know what Snackers, Jack and I are talking about this? We agree. Minions GIFs, the best way to show excitement. A Forrest Gump Giff? the best way to show you're on your way. So Snackers, here's what Jack and I think

was the core strategy behind the acquisition. Facebook will use Giffy to become the number one messaging service. Messaging is an anchor product. It forces you to come back to the app. And that's what all app companies want. They want you back in the app. Everyone gets that red number anxiety when like the little right-hand corner of your app goes

6, 7, 8, 12, 50 messages. You got to go back into the app. And right now, Facebook is losing those message wars to IMM. Which is Apple's product. To texting. Which is what everyone on an Android does. And then to Snapchat. Which is Snapchat. Meanwhile, Facebook's just stuck with Facebook Messenger, WhatsApp, and Instagram DMs. Here's the thing about those three Facebook messaging apps. They're all really boring ways to communicate. Not a lot of fun jumping on those things. Meanwhile, Snapchat bought Bitmoji a couple years ago so everyone can express themselves as a cuter version of themselves. Apple invented an emoji so everyone can express themselves with a panda version of themselves.

Interesting theme here, everyone's trying to be a cuter version of themselves. Meanwhile, Facebook is purely functional with its messaging apps. It's like a pair of pliers, not a birthday candle. There should be some fun and functional, right? Next. So true. Now, by the way, Facebook has announced it will not fence off Giffy from its competitors. So it's not going to like ban Giffy or GIFs from being used in your IMessage conversations. Their lawyers made them do that. So Jack, what's the takeaway for our buddies over at Facebook and Giffy? This acquisition, isn't about Giffy's library of gifts that somebody else created. It's about making you a gift creator through Instagram. Snackers, making your own gifts should be easy. It is not. And Facebook

will like pull a staples. That was easy and make this easy. Snackers, raise your hand if you've ever created your own gift. It's in three, four, 12, 7,000, 20 million. Yeah. No, Nick, I don't know like anybody who sends their own gifts. I made my first one last week. It was pretty fun. If you're going to do this, you'd have to know how to go to Giffy, find the create button, then like create the GIF, then bring it back to Instagram. It's like 12 clicks. It's overwhelming. 12 clicks is completely unacceptable. We expect Facebook will integrate Giffy's create feature more natively into Facebook,

into Instagram, into WhatsApp. Boom, in two clicks, you're taking a live photo, creating a GIF, and then it's immediately on Instagram. And there you go. Facebook's boring messaging problem suddenly becomes a fun competitive advantage. If you're running a Snacks Challenge, we're almost halfway through. So get ready to turn around about one minute and head home. And that brings us to our second story.

McDonald's Snackers is reopening. That makes it the first mover of the post-COVID-19 big food. We're cleaning everything. Oh, by the way, early snack fact, that's Justin Timberlake doing the Bada-Pah, blah, blah. Seriously? In real life, yeah. Seems like Justin Timberlake needed some money back then. Now Snackers, remember, 93% of McDonald's are actually.

owned by small business people, aka franchisees. And fun fact, you can become a franchisee and anybody can apply to it, but it costs a million to $2 million about part of an investment to open to McDonald's. Not easy. In the meantime, though, Jack and I are hoping Barnes & Noble comes out with a new book, the old 59 page, The Dine-in reopening playbook. That playbook just hit all 14,000 McDonald's U.S. locations on Thursday. That's right, Snackers. McDonald's gets to issue reopening guidance before the CDC was even allowed to. If you're a general manager of the McDonald's, here are the key details for you to reopen

and stay safe amid COVID-19. And by the way, if you're just a hungry person, this will make sure you're not paranoid when you walk in the door. Now, rule number one, workers at McDonald's, they have to get their temperatures taken before coming in. Yep. They have to wear gloves and face masks.

Makes sense. And they have to wash their hands every single hour. Every hour. And then they've got to clean the digital kiosk after every single order. Sounds like they just shouldn't use digital kiosks if you need to clean it every order. I guess, Jack, when you're not cleaning the digital kiosk, you're cleaning off the tables, which have to be cleaned after every single meal. They also need to close off adjacent tables to diners to enforce social distancing of at least six feet. And just to keep you

like a little on your toes, you're not just, you know, doing nothing in between hours, you got to scrub the bathrooms and all high touch areas every half hour with disinfectant. And you know those self-served soda stations where you can do half Sprite, half Coca-Cola? Taking a couple sips, no one's judging or blaming you. Well, those are closed. They have to be manned by a worker because having the public go in there is just too risky. Jack and I are looking at this list. Seems like a lot of cleaning. Seems like they should just keep the door shut. Yeah, drive-through actually represented two-thirds of McDonald's revenue before COVID-19 even began. Letting people died in these days is going to require four

full-time workers just to clean and then spot the cleaners, which already is kind of risky. Just bringing in outsiders is risky, Nick. This is going to become like a new hotspot. people walk through the drive-through instead. Oh, and also McDonald's, give everyone who walks in the door a happy meal. Yes, we all need that right now. The only people who need happy meals these days is everyone over the age of 18. This is a time when kids don't get them. Kids have played with enough toys right now.

So, Jack, what's the takeaway for our buddies over at McDonald's? Big first movers like McDonald's can define what's normal as we reopen the economy. Snackers, what will things be like when COVID lockdown ends? Big first movers define it. Will life in the office be the same? No, as evidenced by Twitter's huge announcement last week of permanent work from home. Are like movie releases and theater is going to be the same? Probably not based on what we've been talking about with Universal and Disney lately. July 3rd, Hamilton comes straight to Disney Plus. Mark thy calendars. By the way, what about sporting events, in concerts, and ski resorts?

We haven't had any big announcements from big first movers yet on those. We need them in those industries to set the narrative for the new future normal. For our third and final story, this one is wild. coffee stock stopped trading on NASDAQ because of a $300 million accounting fraud. And now the company isn't just going out quietly. It's pivoting to an entirely different business model. Snackers, this is Nick. This is Jack. And we both got Enroned. We got Enroned by Luckin. We thought the revenues of Luckin were X. Turns out they were X divided by three. Now Snackers, you know we've disclosed that we own Luckin stock. We still do. But when our disclosure says at the end of this podcast, you can lose all of your money in the stock.

Yep. Our luck and investments are proof of that. Yeah, my shares dropped 77%. My luckin investment fell by 87%. I still own it, sadly. Which brings us to the saga of Luckin that feels a lot more like a teenage vampire book series. It moved fast, it broke hearts.

2017, the company's founded as mobile first tech-focused order ahead coffee. It's a grab-and-go store only. You order ahead on your app, you grab it, you go. And then in 2019, they IPOed. Just two years later, And then in January of just this year, they actually passed Starbucks with a techie 4,500 stores in China. Bear in mind, Starbucks has been in China since 1999, and Luckin has more locations than them already. Starbucks was in China, an different century.

Which brings us to February. Nick and I were owning our Luckin stock. Things were looking good. Everything seemed fine. But then 1,000 and a half thousand employees of the company engaged in a project to make sure that the numbers were adding up right. They went through 25,000 receipts. turned out the numbers didn't add up. Then came April 1st. The fraud, the massive fraud at Luckin Coffee was revealed. 310 million of sales reported for the previous year did not even happen. They were fake

sales. We woke up. The stock had fallen 80% in 8 minutes. Hashtag fake brews. So just this past week Snackers, the company fired its CEO and COO, but Jack and I were fascinated with a very different storyline. They're pivoting from selling coffee to selling everything. This is insane. And Included in their update was the fact that Luckin Coffee, a company under investigation right now, is adding 10 stores a day in China. Like yesterday, they added 10 new coffee shops. Honestly, though, you hear these numbers? We kind of think someone may want to double check this given the track record.

Yeah, did they open one and somebody added a zero by accident? Or did they take 10 and divided by 3? Luckin seems to really enjoy the whole rounding up concept. Now, the second insane update about Luckin's current situation, they have a new sales campaign to add lifestyle products within the app. Snackers, Jack and I did what you'd expect us to do. We jumped in snack style, re-downloaded the app because we used to have it too. And we found beauty masks, AirPods, soap, you name it, they have it.

This thing feels like a fringe Amazon. That's right. We couldn't read because it was written in Chinese. Full disclosure. We could see the products. It's like yesterday it was a coffee app. Today it's like an Amazon app. At no point in the app do you see more than one cup of coffee because the rest of the page is obscured

with other products for you to buy. It's the first ever shapeshifter app. So Jack, what's the takeaway for our buddies who swear everything's totally fine over Luckin? Don't be app ignorant Snackers. Tech is not a one-size-fits-all-country's situation. In China, there is a much more common app strategy that you should all get to know. First, you get your user base with one product, and then you expand the number of products until you find your profit puppy.

That's why Luckin started with absurdly cheap coffee that was probably not very profitable for them. Luckin announced they had 1.5 million daily active users using their app. That's right, Snackers. We said daily active users, like a tech company, not customers. That's because Luckin's always been about the tech and the app, not the coffee. And once 1.5 million people were checking out the app every single day, Luckin could test the limits, see what else they could buy, and hopefully something more profitable than the coffee itself.

Apparently it's headphones and detergents. This is Jack. Nick and I own a headphones and detergents app. Jack, can you whip up the takeaways for us to start the week. Facebook has acquired Giffy to make its messaging more fun like Bitmoji or Animoji. And Giffy should just be thankful if they didn't get sucked. Only kind of got sucked. Second story, McDonald's just to find the new normal of fast food restaurants post-COVID. Basically, it's a SWAT team of disinfectants in every single store on every single dish.

For our third and final story, in response to huge fraud, Luckin is pivoting from selling coffee to selling just about everything. Sell one thing. Then try selling a lot more things. That's Chinese tech and it's different than U.S. Tech. Now, time for our snack fact of the day. This one cooked up by Dan Aguirre with his parents while quarantined at the dinner table in Long Beach, California. A homemade dinner snack fact. The Oscars. You know the Oscars? No, the Oscars. No, them. Well, they look great. Have you noticed that that statue you get if you win is ripped? Yeah, this is like a Michael Phelps meets Brad Pitt situation, whoever modeled this. Also, what's he holding? Like, what is that staff?

It looks like Ned Stark's sword. Seems to be some kind of a microphone weapon. Dan and his family told us that they actually know who that statue is modeled after. Turns out it's a legendary Mexican director, actor, screenwriter, Emilio Elindio Fernandez. Amelio! Before we go, Victoria Lynn, you're turning 25. Happy birthday. Yes, you're in North York, Ontario.

By way, Jack, you know how you get there? You go to the upper east side to make a left of night. 96th Street maker right on Amsterdam and you go really far uptown into Canada. You go way north. You go really far. Megan and your buddies think you're a T-boy, Victoria. Happy birthday. Snackers, can't wait to start the week with you.

If you haven't yet, scroll down in your Apple Podcast app, click five stars, drop a rating and a review. We've got about 5,000 reviews so far. I know there's more than 5,000 of you listening to it out there. Let's hit some 6s, people. Let's hit some 6s. And we'll see you tomorrow. This is Jack. I own stock of Amazon and Nick and I both own stock of Beyond Me,

and Luckin. The Robin Hood Snacks podcast you just heard reflects the opinions of only the host 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 INRA, SIPC.