The Best One Yet - “Gone in 60 Quibis” — Streaming Wars’ victim #1. Venmo’s $13K Bitcoin. Goldman’s $5B Malaysia trip.

Episode Date: October 23, 2020

Just a few Quibis after launching, billion-dollar streaming startup Quibi is shutting down — we’ve got the autopsy. Bitcoin popped to $13K for the first time in 3 years after PayPal announced it��s coming to your Venmo. And Goldman Sachs has to pay out $5B for its scandal in Malaysia, but the impact is way bigger.$PYPL $GSGot 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, October 23rd. Nick? Yep, it's the end of the week. It happens to be the best one of the week. It is a T-B-O-Y.

First story, Jack. What do we got over there? Quibi has announced it shutting itself down in a quibby or two. Already got the autopsy report, Jack. Do we have a prognosis? Or is it a diagnosis? We're making a prognosis. I think it's a cause of death.

There's going to be an oasis involved. Second story, Jack, what's involved? Goldman Sachs' bad trip to Malaysia a bunch of years ago? Yep. Feels like it was the hangover part form. for Goldman. They're stuck with a bill for $5 billion and huge implications for the entire financial industry. For our third and final story, you buy Bitcoin, bro? Your crypto buddy Steve is probably named Steve is calling you this week about the Main Street moment over at Bitcoin, courtesy

of Venmo. This is Jack. My buddy Nick owns a Bitcoin. His name is Ben. He hasn't done much until recently. But Snackers, before we hit those three great stories, the biggest change to your refrigerator in the 21st century is about to happen. Get this. Jack and I noticed that Coca-Cola is shutting down 200, 200 of its drink brands. Slice bread is nothing compared to the half of Coke-owned beverages that will disappear next year. Jack, we got a whiteboard this thing. What are we going to call this? We got to call it like the great clean-out, the silent spill. How about the epic evaporation? Coca-Cola actually calls these brands that it's killing. They're zombie brands. Yeah, that's their term, zombie brands.

Because the brands aren't growing. They're just lingering. They're hanging out on shelves. It's kind of creepy, to be honest. Last month, we updated you that Coke executed a couple of zombie brands, Adwala and Zika. We're talking the OG brands of smoothies and coconut water. Sad to see these guys go, Jack. We thought Adwala and Ziko is where the pain would end. But we were so wrong, it is a blood bath out there over in the hydration category. Desani, power rate, vitamin water. They're all getting silently spilled some of their latest variations. Coca-Cola, for some reason, owns like 13 different Desani brands, so they're going to get rid of a bunch of them. Jack, would you like this, Desani. Now, with extra water. But here's the crazy thing about these zombie brands,

all 200 of them. They're just 2% of Coca-Cola's total beverage sales. So you got to ask, why didn't this happen sooner? Jack, you know, I assume it's kind of tough to pick your favorite kids, but honestly, Coca-Cola is kind of choosing their favorite child right now. The Golden Boy right now is Topo Chico Hard Seltzer and anything with the word Hardin. Anything Hard Seltzer just got upped its allowance. And here are the car keys. Go have a fun weekend. Don't even bother calling mom and dad. Coconut smoothie on the other hand? Nope.

Go to your room, never come out. We don't want to see again. And can you do the hard sell just homework for them? Give your sister your Game Boy. Your PS2 privileges are revoked. Zombie brands are done. 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's 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. You know, we're not recommending any securities. Nope. It's not a research report or invest.

Spend advice. Not an offer or sale of a security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Quibi is sadly shutting down after just six months. In about the length of a single Quibi episode, Quibi is now no more.

Quibi, short for QuickBite, sounds like a flavor of gummy. Jack, break it down. What is the quibby? As a reminder to the Snackers, they were offering HBO quality content, chopped into Quick bites for people with short attention spans. We're talking mobile only $5 or $8 a month. Jack's already using the past tense. He's already getting headed again.

Now, they call it HBO quality content. We're thinking it was Hulu quality content at best. Yep, but still was mobile only, and you were forbidden. Couldn't even ask. Don't even think about putting this on your TV. And it was designed for in-between moments. Each episode was like 8 to 10 minutes. You're on the subway commute.

You're between 42nd and 59th Street. You're going to pop in an episode. maybe you're waiting in line in the grocery store. And the who of this story is the one that got all the attention, because we're talking Jeffrey Katzenberg, the guy who invented the Shrek, he was teaming up with Meg Whitman of HP quality fame. You can thank your printer for her. She also was the first CEO of eBay, I think, and also it's not the Shrek,

it's just Shrek. My bad on that. It could be the Shrek. It could be a verb at this point. But together, this pair raised $2 billion, $2 billion, a quarter of a lift before Quibi had even launched. That's right. There was no Quibi in the app store, and they already had two billion dollars almost from investors. So Quibi launches in April of this year, goes with the extremely absurdly generous three-month free trial. No, please have another sample. And then we got

the numbers. Yeah, so Quibi's like bragging about three and a half million subscribers, but they were free subscribers. It was in July. Yep, that we saw who really wanted to stick with Quibi. A data processing firm let us know that it turns out 90% of all those. users from the first three months, they ended up quitting as soon as they had to pay for the first time. Full disclosure, I'm one of those quibby people who defected when I actually had to pay for it. Jack, I got to come clean here. I am also one of those defectors of July. Nick, I watched one episode and it was okay. I just wasn't compelled to ever return to the act. I hear you that Jennifer Lopez giving away a lot of money. I got through two episodes. It was charming, but I didn't end up

becoming a hardcore. Seems though, Nick's in my experiences wasn't atypical, because in September, we heard rumblings that Jeffrey Katzenberg was going to L.A. and like trying to sell the company. Katzenberg pulled up in the Uber black, went to Apple, went to Disney, went to Facebook, went to NBC, and all of them passed on buying Quibi's content last month, which brings us to last night. After Nick and I just finished the Snags Daily recording that came out yesterday, it was a great recording. That was a great one. We see news that Quibi posted an open letter saying what's going on with their future. The main note of this letter, Quibi is calling it quits.

trying to merge anymore. They're not try to sell to another company. They're going to shut down the app. They are. They've got $350 million left. And very nobly, they're actually going to return that money to shareholders, which is a great move. They're not going to like pull an Adam Newman and like host a company party on Hawaii for a month. Vegas, Quibi team, ASAP. In the letter announcing that they're shutting down, Jeffrey Katzenberg and Meg Whitman gave two big reasons for the failure of Quibi. The first issue was timing and the second issue was the idea itself. Let's address. Let's address. case number one timing. And look, it launched on April 6th, 2020, mid-early pandemic. Yeah, you're not on that four train going from 42nd to 59th Street, and you're not having the in-between moments where you're waiting for a friend at the restaurant, probably Timmy running late. People were sitting at home streaming, and the usage on mobile video apps peaked to a record high during the pandemic. It just wasn't quibby. Yeah, there was actually more consumption and demand for content than there's probably ever been in history. All right. Now, another timing issue, with Kribee, they had lots of competition. They jumped into the market just as Apple TV

Plus, Peacock, and HBO Max were launching too. But as Jack and I have mentioned in a takeaway on Quibi many moons ago, the real competition for them wasn't other streaming apps. It was social media apps. Snapchat just had one of their best quarters ever during the pandemic. You don't hear them complaining about timing. Oh, and TikTok wasn't really a thing last year, kind of a thing this year, even though you're at home. Once again, we think the real competition for Quibi was social media apps, which are doing really well. But as for Meg and Jeff's second point about the idea not being strong enough, feels like we should address that one with Jack, what's the takeaway for our buddies over at Quibi? Quibi's idea did make sense. It's execution didn't make sense. Snackers,

content is still king, and Meg Whitman and Jeff Katzenberg did market it as HBO quality content, which it kind of wasn't. Exhibit A, the show about a lady obsessed with a golden arm. Did you hear your buddies saying you got to watch that on Quibi next. Checked it out. It's got the lady from Marvelous Mrs. Maisel, who's fantastic and kind of a B-Wa-W-W-W-for her where she has a golden arm that she's obsessed with? The show didn't catch on, and it actually turns out, according to reports, many of the shows that made it to Quibi, they were leftovers that Netflix and HBO had passed on. But the other key that Jack and I have noticed is that Quibi was so focused on mobile only that it actually became an antisocial app. Screenshoting of the

Quibi app was banned. No. There were no social buttons to share with your friends. You can't do it. And even when you were sitting at home for the whole month of April, you weren't allowed to cast what was on your phone to your huge TV that was sitting right in front of you. Oh, and by the way, if you open the app, there were no memes, no trending hashtags, and no TikTok style discovery to find out what other shows you should watch. The last sentence of Quibi's obituary on Snacks Daily. Quality mobile first streaming video was an idea that made sense. Those mistakes, they didn't. For our second story, Goldman Sachs just admitted to bribery in a huge scandal in Malaysia. And unlike in the 08 financial crisis, the individuals responsible are being punished too. We got to travel back to the early

2010s. Jack and I were working in the banking industry in Manhattan at banks, wearing ties, having to shave every day at a peer pressure. Little did we know. Over in Malaysia, the government was asking big-time investors for money to fund economic development projects. So Goldman Sachs came to the rescue here with just a casual classic investment banking service. A whole bunch of analysts were working until 4 a.m. And they said, hey, Malaysia, we can structure for you a $6.5 billion bond issuance. Now, those analysts have probably grown up into associates now. And if you are one of them, we'd love to know what the go-to seamless meal at 3 a.m.

was when you order it. Basically, Goldman says, we will convince huge money managers to buy your bonds for $6.5 billion because you're going to pay them back with interest Malaysia. that's how we're going to convince that. Yeah, that's how this is going to work. Now, Jack and I don't know the exact fee that Goldman charged, but based on our experience, we're going to estimate it was like probably a 1% kind of fee.

Yeah, and a 1% fee sounds small, but a 1% fee on a $6.5 billion amount, that's a $65 million gift for Goldman Sachs. Ding, ding, ding, very nice when bonus season comes around, except one problem that arose a few years later. That fund wasn't interested in economic development at all. Not building parks over in Kuala Lumpur anytime. soon. Turns out the Malaysian officials, one in particular, who's still an international fugitive,

by the way. Maybe a snacker? We don't know. Could be listening to someone else. He pocketed a whole bunch of that money that was supposed to help build the country. Turned out this was a huge fraud scheme and wealthy Malaysians frustratingly embezzled a whole lot of funds. Now, since those Goldman analysts had whipped up the whole deal on a whiteboard. Yep. A bunch of government lawyers got to work and were like, hey, Goldman, what did you know about this fraud scheme? And so since 2018, 10 law enforcement agencies have pressed charges against Goldman Sachs for all this. The United States, the UK, Singapore, Hong Kong, Malaysia. This is the Olympics of lawsuits. And now presenting the legal team of Japan. To issue the final closing affidavit. Yesterday, this all came to a raveling conclusion when

Goldman Sachs admitted to guilt of anti-bribery laws. Translation here, the 65 million or so in fees it pocketed, those were basically bribes from the Malibald. Malaysian officials for arranging the scheme and to stay quiet. So Goldman just announced that it will pay up $5.3 billion in fines, wiping away a whopping eight months. Get this, eight months of Goldman's axis profits. Goldman announced yesterday it's paying half a lift in fines for something it did in Malaysia like five or six years ago.

Five and a half, you know, kind of a big number, five and a half billion dollars. You're wondering how the stock did. This is bad, but investors were completely ready for the pain, apparently. public companies like Goldman Sachs and any other company with a stock that's tradable, they must inform investors as early as they can about big things that could affect the stock price. Well, interestingly, we noticed that Goldman told us back in August to expect a roughly $5 billion price tag to resolve this scandal. And yesterday we learned it was $5.3 billion, pretty close. So the stock ended up rising a bit yesterday because the fine was already baked in.

It's like you're going for your flu shot and they don't say, don't worry, this will kind of hurt. They say, this is really going to hurt. You were ready for the pain. You are already crying. Nothing better than a pre-cry. So, Jack, what's the takeaway for our buddies over at Goldman? We've reached a new era in financial crime. Yes, we have. Individual wrongdoers are finally being held responsible. Snackers, big bank, does bad thing, pays huge fine. You've heard it a dozen times. You've seen it on a dozen newspapers. But here's where this story with Goldman Sachs gets interesting. Individual Goldman employees, they're getting in trouble too. Jack and I have literally never heard of this

before. The bad guys, they tend to just get away in these situations. But the two, two key Goldman dealmakers who structured this deal. One has already pled guilty to money laundering and bribery, and the other is being charged for money laundering and bribery with the trial coming soon. They're even telling the ex-CEO of Goldman, you're going to have to come back to 200 West Street, and we're going to need you to sign a few papers and bring a check. Yeah, pretty much the top five positions at Goldman, the current CEO, CFO, CFO, all that, and the former CEO, CFO, all that. They're all paying back bonuses. So the 2008 financial crisis and its handling, It's taught us a few lessons. Without personal liability, unethical behavior at companies probably won't stop.

And if a dirty deal makes executives money, they can lose it years later. Good to see those lessons be put into place here. For our third and final story, PayPal is going to start letting users buy and sell and get this, pay in cryptocurrencies on Venmo. Separate but definitely related story, Bitcoin's having its biggest week of 2020. Jack, brings us back to like a few years ago. Remember, you'd be like walking around the office and getting completely unsolicited. advice from everybody on buying Bitcoin. Late 2017, it was insane. My brother's like, Jack, a guy at work made $10,000

on Bitcoin in a week. Should I buy, Jack? And I'm like... You'd hear a noise on like 18th Street. It was someone who was like, I'm leaving, I'm quitting. I bought six of them. Now, Bitcoin was insane back then, and it feels kind of like 2017 crypto land all over again. Yeah, first funny thing, Jack and I noticed this week,

the Bahamas just launched its first ever national digital currency. Good for them. It's actually been called the Bahamian Sanddollar. Great name. Sounds like a good Halloween costume, by the way. But yesterday, the other big thing we noticed, Bitcoin just passed $13,000 for the first time in three years. What's driving the news, we think, is that PayPal will let users buy, sell, hold, and pay in cryptocurrency soon. Even though Bitcoin hasn't really done much in the last year, this is a mainstream moment we're thinking for Bitcoin because 350 million PayPal users worldwide are actively using PayPal. The

The population of the United States is soon going to have access to crypto super easy because of PayPal. So Snackers, here's how this goes down. You can go to like PayPal.com right now and join a waitlist. And pretty soon they said before the end of the year, you'll be able to access this service. Tacos at Tacombia and Nolita, pay with Bitcoin. You're doing a shop and binge over at Bloomingdale's. You could end up paying with Bitcoin. You're up in Seattle and it starts raining and got no raincoat. Pay for your raincoat at REI with Bitcoin. By next year, they're going to have 26 million.

stores, you'll be able to pay for Bitcoin. So with any Bitcoin paying situation, you've got to talk about the logistics. I know what you're thinking, Jack, because it's never as pretty as it sounds. So if I got Bitcoin and I'm soaked and I need that raincoat, I can pay REI my Bitcoin, but REI is going to get dollars because PayPal is going to handle the conversion from Bitcoin to dollar. Jack, I think you're going to look fantastic in that raincoat. Second of all, I want to point out it's going to cost you a little bit more than just that final price. PayPal isn't UNICEF, so they're going to charge for this. In fact, for any transaction under $100 worth of Bitcoin, you'll pay a 2.3% fee. Just like with everything with Bitcoin, it's a little bit more complicated once you get into

the actual Bitcoin. But the calendar day, everyone's circled, is when Bitcoin is coming to Venmo in early 2021. That's the real mainstream moment, because then you can have brunch with Becky, send her one, 1,000 of the Bitcoin for that Shukhuka, or as my friend Jack likes to call it, Middle Eastern Wayvos Rancheros. I'm a big fan. I'd never seen it until Nick ordered it in New York City that one day. It's a wonderful thing, although you burn yourself. Inevitably, you burn yourself.

So, Jack, what's the takeaway for our buddies over at PayPal and Bitcoin? Crypto needs a chaperone, a trustworthy person who can get everyone to chill out a little bit. Right now, Snackers, Bitcoin has basically just been a speculative investment. It is mostly bought by investors, hoping that it jumps in values so that they can sell it for a return. But it could also completely fall, and a lot of people have been really badly burned on cryptocurrencies. Crypto is big on the crypto right now. Yes. Not so much on the currency part of cryptocurrency.

Perfectly put jack, because Bitcoin hasn't become a true currency for paying for things, basically because of three barriers. So three barriers are trust, acceptance, and volatility. But PayPal is the biggest name yet who could fix two, maybe even three of those key things. First, the trust factor, PayPal's a big company. It's legit, and Venmo is a trusted payment app. And second, since PayPal handles crypto dollar conversions all the time, lots of retailers would be more comfortable accepting it. And third, maybe third, with wider adoption and use thanks to PayPal, maybe Bitcoin's price fluctuations will chill out a little bit.

And that would mean PayPal has truly become Bitcoin chaperone. Jack, can you whip up the takeaways for us before the weekend? Quibi was too focused on Quibi. It wasn't focused enough on the shows. We think the idea was great, the execution wasn't. ways, though, we want to give respect to the entrepreneurs who took a big bet on Quibi. We're pumped. They took a big risk. For our second story, Goldman Sachs paid $5.3 billion for a fraudulent scheme in Malaysia. What surprised us was that individual Goldman and gold women were held responsible, too.

For our third and final story, PayPal is adding cryptocurrency, which could emphasize the currency of crypto in our society. Honestly, Bitcoin, you need a chaperone. You really can't go out without a chaperone right now. Now, time bar is snack fact of the day, tweeted in by Zach in lovely Nyack, New York. Air conditioning was invented in 1902 by a man named Willis Carrier. But Willis didn't invent this thing for comfort. He invented it to control humidity to fix printing problems at his New York City paper factor. Well, if anyone has worked at a New York City printing press factor, you know that the high heat and humidity causes the paper to change size and the ink to stay wet.

So Willis Carrier steps in instead of all these August smudges, he sets. up an air conditioner machine, which prevented the paper from expanding and gave a consistent print. Yeah, those are the worst, Jack. Then he went on to found Carrier Corp, which you may know for all their great air conditioners, which is worth $30 billion today. Nick, that snacks daily. I'm pumped for this weekend, playing golf, going for a hike in southern New Hampshire with my buddy Kyle and H.K. I hear you. We're heading down to Half Moon Bay, try not to fall over that cliff. Snackers, thanks for snacking. If you got buddies this weekend who aren't snacking, you know what to do. Ask them, mattress, mattress, mattress.

We'll see a Monday. If you know, you know. And before we go, Aaron and Magda, one year anniversary in Dallas, big congratulations. Happy fourth birthday to Chase the Dog in Philadelphia, who's a big snacker. And congrats to Snackers, Thomas Hieronymus, and Lucy Rushnova in San Rafael, California. Big engagement. And happy birthday to Jordan White, a Yelly from Potomac, Maryland. Big time snacker over at Jordan.

And a Gatia Liu, congrats, Melbourne, Australia, huge happy birthday. And happy birthday to Rea Coutor in Bangalore, India. and Sidya Muhammad in Riyadh, Saudi Arabia, and John Knockaway in Honolulu, Hawaii, and Will Warren turned 51 in San Francisco, and Beth Cork Henry in Morristown, New Jersey, and Ryan Teagin in Provo, Utah, and Dakota in Bethlehem, Pennsylvania,

and Madigada in Dublin, California, and Jacob Reynolds in Lee's Summit, Missouri. This is Jack Nick owns one Bitcoin, whose name is Ben. 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.