The Best One Yet - HBO Max (coming this spring), Pepsi’s Bubly obsession, and Virgin Galactic is going public

Episode Date: July 10, 2019

Pepsi’s earnings report seemed normal, until we noticed its CEO’s passion for the future of its sparkling water strategy. AT&T announced HBO Max with a unique angle attacking Netflix’s awkward Achilles heel. And Richard Branson’s Virgin Galactic wants to become the first publicly listed human-spaceflight company.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 Snatz Daily. This is Wednesday, July 10th. This is the best one. This is actually a TV. You know what's on the menu? It's a great one. AT&T, Pepsi and Virgin Galact. I'm not going to lie. I didn't see that coming this morning. That is appetizing. That's what we ended up finding. The first story, a little more detail. AT&T just revealed HBO Max. Which includes friends. Yes, it does. And it highlights an interesting new trend that could hurt Netflix. Who is going to become the king or queen of the rerun? Not Netflix. No, that's an issue. Second story, Pepsi's earnings report looked a lot like Pepsi's typical earnings report. Except we noticed something.

It's obsessed with sparkling water and making a new strategy pivot. It's actually awkward. We added up all the quotes. Third and final story, Richard Branson's rocket ship startup. Excuse me? Sir, Richard Branson's rocket chip startup. Thank you. Virgin Galactic wants to become a publicly traded company, and it's found a way to do so.

This would be the first publicly traded space company in Megan Markle's universe. Now, Nick, you know I'm more of a lift guy than Uber. You mentioned it. You dropped it a couple times. But Uber just announced yesterday in your... new feature that is going nationwide in 40 cities, one county, Orange County, two New England states, Connecticut and lovely Rhode Island, and the District of Columbia. Can't forget D.C. It's called Uber Comfort. Sounds fancy. It is going to be new cars only,

and it's going to be with top-rated Uber drivers only. So we're talking there's going to be like a more legroom situation. Yeah, how you get more legroom? Is it short-legged drivers only? I think it moved the chairway forward. Extremely uncomfortable drivers. Second, you can request your ideal temperature in advance like Peter Dinklage in Elf. 72 and a half degrees and I don't want it a fraction of him. He's an angry elf. Also, you get to request whether you want a quiet driver or a talking about. This is where it gets controversial.

It's called quiet preferred or quote unquote happy to chat. Now, of course, the key thing here is that means no more kind of, you know, picking off the laptop pretending you got to be doing work and doing that. Instead, you could just push a button and then the driver's phone will have a thing that basically says, like, shut up, that guy doesn't want to talk. Of course, the great irony here is. What if the rider ends up clicking happy to chat? If you're the driver, then you're like, if the driver doesn't want to talk.

God, I got to ask you. Where you're from? Where did you just fly from? First time using Uber. Welcome to my place. Now, Uber Comfort is going to cost 20 to 40% more than UberX, but it's still not as much as Uber Black. Uber's got a lot of options here. This is an interesting new one.

Now it's in 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 about the hair ain't food. It's air candy. They don't reflect them. 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 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, Jackie, you think I'm more of a carrier, Miranda. Your is Samantha. Thank you. AT&T just unveiled HBO Max. That's big, and it's the kind of. of thing that wants to become the king of reruns. It is the king of reruns.

HBO Max. It had a very lame launch. It was simply a press release. Yeah. Whereas Disney Plus, which launched a few months ago, had like a whole big shebang. This thing was like a little to AT&T and not enough HBO.

Now, wait, as a reminder, what is HBO? Can you do that impression you always do? This is HBO Max. HBO Max is what it's called, which is basically HBO Plus Friends. We're talking Joey Phoebe Ross, the whole apartment that they can't afford.

Gotta mention Rachel as well. It's coming out in the spring of 2020, which is just two seasons after Disney Plus launches in November. Now, we know what you're thinking. What's the price? We can't tell you. But this is going to be more than HBO now, because you're getting a lot more content. And HBO now is $15 a month. Right. Probably more than $15 months.

And that's their current streaming app. Now, when we looked at the press release, we noticed something interesting here. Storytelling was mentioned four times in the press release. Buzzword. So apparently they're going to be telling us stories. A lot of them. They really want to focus on it. Now, there's a dozen original shows that they announced.

were going to happen. The highlights of which are a Gremlin's animation, which sounds scary. Big little lie stars Reese Witherspoon and Nicole Kidman are doing their own things. They're both launching their own new shows with HBO to both you. But we noticed something else we thought was really interesting. Snack style. They're focused on reruns. And this is going to test Netflix big time. So 73% of content watched on Netflix today is non-original content, i.e. reruns. That is a wild stat. I almost feel like it needs to be repeated. And most of those reruns are being taken away from Netflix. Seventy-very-challenging time. Percent. So Friends is going away when HBO Max launches in the spring of 2020. And then the Office, another show that's a rerun on Netflix, is going away in

2021. Now, that is the number one and two shows watched on Netflix. Friends in the Office, they're both going. Turns out of the top ten shows on Netflix, only two. Only two out of the top ten. That's it. Our Netflix original. The other eight are non-original shows, and they're probably going to be taken away at some point are another. So if you're over here dropping 13 bucks a month, not stealing your parents' password to get a Netflix subscription, that sounds pretty expensive once your favorite reruns get taken away. Possibly eight out of the top ten shows. Challenging moment for Netflix. So Jack, what's the takeaway for our buddies over at HBO. Reruns are HBO Max's differentiator. Now, Netflix has got original new stuff for our generation, although I want to know when the

crown's coming back. Disney has Star Wars. It has Marvel, and it has the Disney classics you and your family love. HBO Max, the new HBO Max, it's going to be all about reruns. We're talking from like Warner Brothers. TNT. TBS. Cartoon Network. Can I throw this back to some adult swim?

Yeah, but I'm going to make it more family friendly with Looney Tunes. All of those stations were acquired when AT&T acquired Time Warner back in 2018. Plus, in case you weren't sure this rerun theme was a real theme, let's talk about the HBO reruns you're going to get. Yeah, HBO Max is also going to have the HBO stuff

you love like the Sopranos. And Game of Thrones. And Sex in the City. And the Wire. That is a pretty all-star lineup. and we didn't even mention curb your enthusiasm. For our second story, Pepsi's earnings report just revealed who their real hero is. Sparkling water.

It came out of nowhere. You know we're sparkling water fans on this pod. We talk about a lot, but that's because it's a growing industry that is eating away market share from soda. Now, if you jump into the Pepsi earnings like we did snack style. It looked pretty typical. It's not anything exciting. Revenues were up 2.2%. The stock's up 20% this year.

Better than competition, which is Coke, which is only up 10% this year. True, but the stock for Pepsi barely budged after this earnings. Now, Pepsi seems to have just as much of an obsession with sparkling water as we do. It's actually serious. So it acquired Soda Stream a company from Israel for $3.2 billion last year. Yes, he can make your own Seltzer water at home. And then it's got this bubbly brand, which is competing with LaCroix, competing with Perrier, competing with New England's family-owned polar selter. Just launched last year.

It's already doubled in market share while those others have slipped. It used to have 2.3% of market share. Last April, this April, 6.5% of the sparkling water market. I decided to pour some money into a Super Bowl ad for this Bubbly speltzer drink with Michael Bubley. Not too shabby. Now, this company, though, it seems to be crossing the line almost to an inappropriate status. It was a little aggressive. With its love for Sparklewomen. When you listen to the earnings report, because there's an earnings call after the report, the CEO of Pepsi got really into Sparkling Wall. If you want a fact-checked us on these quotes, you can. Go ahead.

There's also a transcript of the earnings call. The CEO said, we have a huge opportunity ahead of us in Bubbly in creating a whole new category of beverages. He was asked a little bit more about Publy, his response. He said, Beverage, you know, it's a super, we're super happy. We're really, really happy with this opportunity. And then he said the personality of the brand is fun. It's modern. It's young.

It's everything my wife wishes I was. It's actually something we were like, where can we meet this person? We want to hang out with them. They sound like a lot of fun. Bubly was the star of the earnings report show. They also added this is the quote unquote brand of the future and could be the next $1 billion brand. So, Jack, what's the takeaway for our buddies over at Pepsi and Bubbly?

Millennial moms are the new go-to demographic. Now, Pepsi's CEO also having to mention one more thing we thought was interesting. The target is not just young people, it's millennial moms. It's millennial moms specifically. And it's not the first time we've heard millennial moms starting to get discussed more. I think like two weeks ago, we covered Walmart's launch of Jet Black, the new online concierge, and they explicitly targeted millennial moms. Now, there are a couple benefits here.

A key one is the double dipping of millennial moms. They hope that once millennial moms adopt brands themselves, they'll, they'll, start to feed their children. And they're specifically making the appearance and the brand of something like Bubly something a kid would like as much as, you know, a millennial. Well, new millennial raised babies want to be environmentally conscious. They want to be guilt-free. Well, Pepsi just announced last week that it will have no more plastic bottles for water. Bubly will be cans, Aquafino will be cans, and life water will be 100% recycled plastic. So we're talking about a bubbly situation that is not plastic film. It's trying to create a new American dream, raising kids to be sparkling water

drinkers. For our third and final story, Virgin Galactic, Sir Richard Branson's Virgin Galactic, wants to become the first publicly traded space company out there. Now, it's not doing an IPO. It's technically, it's merging with an already existing public company to become like, to go public. But effectively, they're just going public. Sounds like rocket science. Now, context, there have been two space races over the course of mankind. Can we talk about the one last century? Yeah, the one last century was among governments. You had the astronauts of America's NASA fighting the cosmonauts of the USSR. Now you've got a new space race in the 21st century. That's between billionaires. Among billionaires. You got Elon Musk with SpaceX. You got Jeff Bezos

with Blue Origin and Sir Richard Branson's Virgin Galax. Just running with that Virgin brand he decided to do. It's Virgin Galactic. The company was actually founded in 2004. And they've got some pretty funky looking vehicles. Well, you've probably seen like on YouTube those SpaceX rockets that shoot straight up. Very vertical. From like Cape Canaveral in Florida. Classic design. Virgin Galactics are more like just insane airplanes. They go off like a runway. Kind of like a dream. And they fly 50 miles above the surface of the Earth, which is technically outer space. I don't want to get too tight on here, but I believe they call it suborbital. Yes, technically. So the big question you're probably wondering is, why would this space travel company become publicly traded?

It's doing so because it needs to raise money, and it thinks raising money through public markets is the best way to do it. Now, we've spoken about these kind of companies before, like SpaceX, which is Elon Musk's We covered them on the pot about a month ago, and we mentioned that it was possible for consumers to buy SpaceX shares. Now, we wanted to clarify this a bit because some people reached out and asked to us. Yeah. Actually, you have to be an accredited investor to invest in SpaceX currently. Interestingly, SpaceX goes through a policy where they actually fundraise frequently, like almost every six months. But you have to have a net worth of a million dollars to buy shares. And if you're selling shares, you're likely an employee who has them.

What's unique to SpaceX is employees can sell shares at all of those fundraising routes. Now that's SpaceX. What we're talking about here is Virgin Galactic. And Virgin Galactic is very focused on one way to make money. Yes. Space tourism, specifically. Space tourism for thrill-seeking ultra-wealthy people. Now, that's different from SpaceX owned by Elon Musk or Jeff Bezos's Blue Origin. SpaceX is launching satellites into space for NASA. NASA pays SpaceX for that service. Another way some of these other space companies want to make money is by, once they have satellites up there, maybe you're offering Wi-Fi for the world. Yeah, cast it down to everybody's smart. smartphone through SpaceX. So let's keep focused on our buddies over at Virgin Galactic Jack, and what's the takeaway for them? Virgin's business model is actually a lot like Tesla.

Now, we don't want to get confusing here because we know Tesla's Elon Musk owns SpaceX. But just like Tesla, Virgin Galactic is starting a wait list. Yes, and that wait list costs $133,000 to get on the list to fly into space. They made $80 million off the initial 600 customers. So just like Tesla, it's starting very much. high end. And just like Tesla, they claim that the tickets will become affordable to go into outer space on Virgin Galactic in 10 years. And just like Tesla, it has a highly aggressive plan to become profitable by 2021. Sir Richard Branson's Virgin Galactic is pulling the exact strategy as Tesla. Jack, can you whip up the takeaways for us over there? Pepsi is seriously crushing on sparkling water and it's going after millennial moms. If you can find a target demographic that turns into two, that's not too bad. AT&T's HBO Max comes in the spring,

focused on the reruns you love. Everyone talks about original content, but reruns can have value too. Virgin Galactic is going public, following the high end first, everybody else later, Tesla strategy. The old Tesla strategy. Now, time for our snack back to the day. This one's an original. Sad story, the Volkswagen Beetle, known in Germany as the Kifer, is rolling off the assembly line in Puebla, Mexico for the very last time.

Today. Today, it's happening today. And that last model, we're talking denim blue. Now, that is the longest running and most manufactured car ever. This is an old vehicle. From 1938 to 2003, the Beetle had like zero changes and was produced for that whole time. On the exact same single platform. Unbelievable.

Now, a couple other big stories were covering it in our snacks. Well, hackers figured out how to hijack the webcams of Zoom Video Conference. That's a little awkward. That's a sticky situation. And they're going to see how they get out of that one. Great to have everyone on the pot this day. We will be back with you tomorrow as always. It feels like a good midweek.

Keep snack and feeling good. Keep. Can't wait. 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, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, 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.