The Best One Yet - “Guac never forgets” — Chipotle’s early COVID-proofing. Twitter’s un-scared threat. Draft Kings don’t care.

Episode Date: May 29, 2020

Chipotle’s stock has doubled in the corona-conomy because it’s literally been through its own personal pandemic before. You’ve probably seen the political drama going on between Twitter and the president, but we’re focused on the business side: Why isn’t Twitter’s stock down like 20%? And sports betting apps like DraftKings are living their best life… even though there are no live sports. So we’re looking at how that is humanly possible.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. It is Friday, May 29th. Snackers, first things first, 2.1 million Americans claimed unemployment last week. Continuing to feel the incredible economic pain right now. Shockingly, markets actually had some pain yesterday, too. Stocks fell for the first time in three days. Not the kind of thing that happens a lot lately. And one thing completely not economic, not market related, we are loving this four-day work week situation. Feels like a good time to make this a permanent thing. thing people. Now, it also feels like a perfect time to have a T-Boy podcast because that's what we're serving up today. Chris, this happens to be the best snacks daily we've ever done. For our first story, this isn't Chipotle's first rodeo. They've been disinfecting for years. Your hands are sore from hand washing. Chipotle's got permanent calluses. Chipotle's stock has more than doubled in the past two months, and it's at a record high. That's because it went through its own virus outbreak just five years ago. Gwok never forgets. Gwok never forgets. For our second story, no live sports, no problem for the sports betting industry.

Turns out stocks of Draft Kings and Penn National Gaming have surged despite the ESPN oculops. Who's winning the match, Pop? No one. No one is winning the match, son. We're looking at how sports gambling stocks are up despite no sports. Third and final story, Jack, you've probably seen the Twitter drama going on between Twitter and the president of the United States on Twitter. Kind of meta. It's a political story, but we're focused on the business side. Twitter is being directly targeted with an executive order. And yet its stock doesn't care.

We explain why. Twitter don't care. Before we get into that, Snackers, we've talked about quarantine goals. Yeah, basically, Jack and I had to just learn how to set up a travel-sized microphone. Pretty easy. It took us about two minutes. Didn't take that long. We've mastered the skill at this point. But Snackers, Jordan Groost and Peyton Rockwell beat us big time. We're talking about seniors at UCLA who launched a side hustle called the class of COVID-19.

Now, Nick and I have a soft spot for side hustles because market snacks, which has become Robin Hood snacks, was launched as a side hustle nine years ago. And then evolved into a full hustle. Back to Class of COVID-19. This is merch for members of the class of 2020. And it flips the script on like all the negativity surrounding everyone who was a senior who basically lost their spring senior year. No prom. No brunch with grandparents on graduation day. No after prom party.

No pre-prong. No post-prom. Instead, class of COVID-19. focuses on what this year's grads gained. In the case of Jordan and Peyton, they gained a taste for entrepreneurship. We're talking about two co-founders who are literally fulfilling orders as we record this. They're the marketing department. They're the distribution. They're the HR department. They're running a regular old Amazon warehouse outside of L.A. By the way, this is Nick and Jack owned shares of Amazon.

Now, we checked out the class of COVID-19 gear. It is awesome. They got like t-shirts, hats, and mugs. But they're also donating 50% of each purchase. to feeding America, which has a COVID-19 relief fund. They're donating 10,000 meals, which is about six lifts. Time out, their goal is to donate 10,000 meals, but only if people of this pop, check out www. com. The graduations were digital.

The t-shirts, though, they're real, and they're spectacular, their tie-dye. I got to say, tie-dye's making a major comeback these days. Snackers, if you're aware of a pure-played tie-dye stock, what Jack and I know already. Again, class of COVID-20.com. Check it out. Let's hit our three stories. You're tuned in to snacks daily.

We spoke to the lawyers and we got to get something legal out the way. The snacks about to hear 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, Chipotle stock has now overdoubled in the coronavirus. Because they COVID-proofed themselves five years ago by accident. By accident. This came out of a wild interview with Fortune magazine. They're putting something in the guacamole over there at Chipotle HQ.

We know it's extra. We will pay extra. That's worth it. Actually, it's not extra if you get a veggie ball neck. Well play, Jack, Pro Move. History doesn't repeat it. but it does rhyme and it is saucy. Oh, it is so saucy. Chipotle, March 2020, sales fell 35% because of coronavirus scares. Chipotle, March 2015, sales fell 20% because of norovirus scares. Change the prefix, not much actually changes. Norovirus versus coronavirus. History in the case of Chipotle literally rhymes. In 2015, the stock for Chipotle dropped 65% for the next three years on what it dealt with. It was dealing with E. coli and

Not fun. There was a disturbance in the kitchen. Chipotle dealt with five food poisoning outbreaks over the ensuing few years. Five. I'd like a barbacoa burrito. Hold the salmonella, please. Please tell me right to salmonella today. In response to these health scares, Tripoli put procedures in place in 2016 to convince you burritos were safe to eat again. Jack and I dived into this list. We thought it was fascinating. Please honk if you think you've heard these before. Since 2016, Chipotle has been washing hands between every task. Mm-hmm. They've been putting hand sanitizer at the door of every location.

Mm-hmm. They added plexiglass between the customers and the food. Mm-hmm. And they've trained their assembly line to operate with four people, not seven, because you don't want to be bumper-to-bumper over that. Jack, I'm doing the math on this. Add all that up, and it feels like today's CDC slide deck. Did chef Fauci take over the kitchen of Tripoli?

We got Chef Boy or Foucho whipping up the queso over there. Also, back in 2016, Chipotle was a first mover in the digital ghost kitchen concept. Get this snackers, way back five years ago, they designed separate areas in nearly every Chipotle location for online-only burrito prep. So if you're coming in, you can see your burrito getting made, but there's a whole another kitchen in the back for online delivery orders. Just doing the takeout, they got a whole guac zone. And that's come in handy because online only is Chipotle's one and only during this

COVID crisis. That's basically all they're doing. They've added 2 million app users in just the past two months because you were ordering Chipotle online. You are not hitting up the lines at Chipotle. And they added free Uber Eads delivery just before the crisis started. Kind of good timing. And they can pass. So Jack, what's the takeaway for our buddies over at Chipotle? Adaptations during this crisis can pay dividends in a decade. Snackers, Chipotle kept the lessons from its own personal crisis and now its stock is at an all-time high. Other companies are adapting to the circumstances of the corona economy, but they should consider making those changes permanent. Look at Airbnb, you can't travel, so they launched virtual experiences recently.

That could become their future profit puppy. You're taking a shoemaking class in Spain. We would do that now, and we would do that in five years. Look at Uber. They've adopted their delivery to deliver anything, not just prepared food from restaurants. Why can't Uber eats drop off your medications along with the burger? Tinder, they finally launched video dates. Couldn't that become the standard for your first date instead of wasting like 15 bucks for drink. Look, neither one of us is enjoying this mojito right now. Making temporary crisis adjustments permanent could become critical differentiators in the future. Gwok never forgets. For our second story, sports gambling stocks are living their best lives right now. Even though

there are no live sports to gamble on. Where are the underground kickball leagues going down? We aren't aware of these things. What's happening people? Who's making the bets? How do we get in on them? How do we play kickball? Our buddies over to Axios noticed that Draft Kings is up 80% in the last month when it comes to the stock. And Penn National Gaming, which owns Barstool Sports, is up 130% in the past month. So we jumped a little further. Part of that is because, you know, investors, they're a forward-looking people. They're seeing little bits and crumbs of sports that could be returning to a reality, which would be good for the sports gambling industry.

Volleyball net, puck, puck, a stick. Nick, the NBA is talking about relaunching at part of Disney. You're talking like the thunder taking over the splash mounted over there. The NHL is planning an abbreviated 24-team high school tournament style playoff plan. Hey mom, after we play the Oilers, can we, uh, can we please get some pizza? Vegas casinos are even opening up next week. Oh, that's going to come with some aggressive housekeeping, two-person blackjack and like no Cirque de Soleil. No cirque de Soleil and no blue man group. Those things are like human COVID spreaders. You do not want to be in rows one through 40. They're literally dripping germs.

But the main reason the sports gambling stocks are up is fundamental. Live sports will change, but betting on them will not. The New York Rangers may play their next game in a stadium with no fans, and the players may have to live isolated on some Pacific Island. Sounds charming, but that's the NHL's problem, and stadiums are going to lose big-time ticket sales. Madison Square Garden, which owns the New York Rangers and the New York Knicks, their stocks down 20% because their stadiums won't be filled with fans anytime soon.

Figuring all that stuff out, that's going to be hard. But the fundamental business of draft kings and Penn National Gaming, they should stay the same regardless of what sports look like. The games are still going to be televised so you can still bet on their app from your couch. If hockey becomes a streaming-only biodome, you can still bet on the Rangers Flyers game. The future of sports is uncertain, but putting money on the winner is not. Well, it is uncertain because you're gambling. You might win, you might lose. That's true. There's a lot of uncertainty. It feels like there should be many disclosures right now. So Jack, what's the takeaway for our buddies over at Draft Kings and Penn National Gaming?

Studying human behavior is studying business. Snackers, there is a behavioral shift going on in sports betting. You're bored, so you're turning to vices. Vices. Wednesday afternoon drink? Wow, okay. Tuesday evening cake? Again? Uh-huh. You're working from home. Make it three cupcakes in a lunch. You're placing a bet and it's like, hey, it's a pandemic. Don't judge me for putting 50 bucks on the Russian ping pong federation. Yeah, TSPNA A Theocho, what else I'm going to do? That's all that's on right now. Snackers, we are noticing more social tolerance for vices because we're all stuck in home and there's nothing like healthy and wholesome that we can do. And the vice industry is betting that's good for the vice industry. For our third and final story, the president has drafted an executive order to punish Twitter for alleged censorship of his tweets.

So why isn't Twitter stock down like 50%? Why isn't Twitter stock down like 180%? This is a political story. with business implications. So Jack and I jumped into the business implications on this one. Now, the President of the United States has tweeted 52,000 times. More or less, round up or round down. And for the first time on Wednesday, one of those tweets got the old questionable veracity label.

The quick story here, Snackers, Trump complained on Twitter that mail and ballots are quote unquote substantially fraudulent. Now, he didn't say, I think mail-in ballots are substantially fraudulent. He said there is no way zero that. this is anything less than substantially fraudulent. Reminder here, Snackers, social media companies are under immense public pressure to warn users about potentially false info in their feeds. Especially when it comes to voting rights. And since Trump didn't state this as his opinion, he stated it as fact, Twitter did something. So they flagged it with the fact check label and

add a link so you could learn more about mail and ballots. That's because mail and ballots aren't substantially fraudulent. They're probably a crucial way to run the election in November due to COVID-19. Trust me, my high school gym is not a sanitary place. Unless acts body spray comes out with a hand sanitizer, no high school gym is going to be safe for like voting. Okay, so this action by Twitter caused quite a stir in the White House this week. Trump ended up drafting an executive order to prevent this from happening again. And a key line from a draft of the White House's executive order. Here's the key line.

When large powerful social media companies censor opinions with which they disagree, they exercise a dangerous power. Now, they seem to be talking about a violation of free speech from Twitter. So the White House argues that even though Twitter is a private company, its platform is a quote-unquote 21st century equivalent of a public square. So Twitter's messing with one of Trump's tweets is a violation of his First Amendment rights. That's their argument of the White House. Now, this executive order hasn't been signed yet, and it's not even clear how, like, they would even go about punishing Twitter.

But what's very clear by the all caps, Trump is angry and he wants to rein in social media companies, which he thinks have bias against conservatives. So Jack, what's the takeaway for our buddies over Twitter? From experience, investors know that big threats to regulate big tech never come true. Snackers, the real story here, Twitter stock barely budged, despite being targeted directly from the president of the United States with an executive order. Twitter stock is down just 3% since it made the fact check in the first place. Investors look at the situation, they're like, we don't think this is going to cause any damage to Twitter, even though it's an executive order. Think about it, Snackers. Since the 2016 election, there has been nonstop chatter to regulate Facebook and

Twitter, but nothing has happened. Facebook stock is even at a record high, despite all the zuckin we see going on. Also, actually regulating social media companies will probably require an act of Congress, not just a signature from the president. And an act of Congress doesn't seem likely right now. And a presidential executive order is highly likely to be sued. in court. Jack, can you break out of that V-neck and whip up the takeaways for us for the weekend? Dude, I'm crew neck today. I was V-neck yesterday. I guess I missed saw. Chipotle's norovirus and E. coli crises were blessings in disguise. The changes it made have made it a Corona Economy All-Star. There's been a disturbance in the kitchen. Disturbance.

Second story, sports gambling stocks would bet 50 bucks that they're going to win. Live sports events will change. Sports gambling probably won't. Third and final story, for the first time, Twitter added a fact-check label to the president's tweet. And investors don't seem that afraid about threats of regulation. Now, time for our snack fact of the day. This one sent in by Scott Gassavi in lovely Irving, Texas. Last week, we mentioned Pete's coffee, based in Berkeley, California, finally going for its IPO like 50 years later.

Well, turn that if you dig a little deeper. The Pete's team is like a little more embedded in your life than you realize. The founders of Starbucks coffee learned how to roast coffee from a man named Alfred Pete. As in the Mr. Pete from Pete's coffee. Yes, we mean the Alfred Pete. Mr. Pete literally became their mentor and apparently a father-like figure. I hope Mr. Pete was rewarded with some

Starbucks shares. Well, Mr. Pete did give them his store layout design and supplier connections. Mr. Pete, great man, little too generous with his business secrets. They want to keep some stuff proprietary. Now, before we head out for the weekend, Vanessa Lara didn't know what to get her husband, Louise, for a wedding anniversary gift. Yeah, they're in Naperville, Illinois, they want to celebrate, wasn't clear what to do. They've been living together a long.

She asked for the T-boy gift of all, a snack shout-out on Snacksdale. And so here it is happy anniversary. We know you're listening while you're working out together in the garage. You're sometimes listening with your one-year-old girl Penelope and your four-year-old boy cruise. And hopefully we just caught you mid-burpee. You know what they say? Couples that snack together. Spot each other together.

Spot each other. Snackers have a fantastic weekend. and remember, when you're six feet apart from someone, yell at them to listen to Snacks Daily. H-Y-H-Y-H-Y-S-D. Have you had your snacks daily? We'll talk to you Monday. If you know, you know. This is Jack, Nick own stock of Chipotle, and I don't not own stock of Amazon.

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.