The Best One Yet - 🏠 “Home-lennials” — Costco’s Kirkland secret. Bitcoin’s pureplay miner. WeWork’s trophy.

Episode Date: June 22, 2021

Everyone’s talking about Amazon Prime Day, but we’re focused on Costco (new target: Home-lennials). Bitcoin fell below $33K on a mining problem, but it’s actually an opportunity for Riot Blockchain, a pureplay mining stock. And WeWork just had its best quarter… since the one where the company fell apart.$WING $BTC $COST $BOWXGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn 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 Tuesday. Tea Boy, Tuesday, June 22nd. Here we go. Snackers, remember last week we said was the worst week for stocks since January? We'll say hello to the best day since March for stocks.

That's right. The S&P 500 was up 1.4% to kick off the Monday week. But Jack, what's the deal? What are we looking at for this pod? Today's pot. The best one, yeah. TBOY. Jack, what do we got for our first story? Everybody's talking about Amazon Prime Day, except me, I think.

I don't know. not either. I don't need an Echo Spot device. 150% off what is that even mean? But we think the more important story is Costco right now. Get this Snackers. Costco's Kirkland brand is bigger than Coca-Cola. Second story, Bitcoin fell again on news of a mining crackdown in China. But that problem could be an opportunity for riot blockchain, the pure play mining stock.

For our third and final story, WeWork just had its best quarter in two and a half years, although it's still unprofitable. WeWorks. hath completed the rework. Although it's still deeply unprocable. Although, Jack, I don't think it's your money if it's technically soft banks money. True. But Snackers, before we hit those three fantastic stories. It's a wonderful mix today.

Four months ago, we covered Wingstop, which is the chicken wing chain champion. It's a publicly traded stock. Wingstop, the wing icon who's delivery wings, we're winning the pandemic. But Wingstop's competitive advantage was that it only sells chicken wings. And funny thing about Wingstops' greatest. risk. It only sells chicken wings. Which leads to an interesting problem we've noticed lately. Wingstop is running out of wings. Wing supplies are low snackers. Wing prices are high. So Wingstop just pulled off one of the biggest pivots of all time. I mean, Jack, this is unprecedented

baby. Wingstop is launching an entirely different, completely new brand. You ready for this? Please. Thigh stop. No joke. It's called thigh stop. Put your thigh tastress all away because Wingstop is launching a ghost restaurant on the delivery apps only that only. That only does chicken thighs. Those chicken thigh orders, they're only going to exist on the delivery apps and in your thighs. And get this, wingstop is going to save money because now it can buy the whole bird instead of just the chicken wings. Jack, they're going to cut up half the bird for the wingstop brand and then half the bird for the thigh stop brand. Wings now cost an arm and a leg. So wing stop is moving beyond the arms and the legs. Jack, what's the takeaway for our buddies over at wing stop? You do need wings to fly. But don't let your wings hold you back.

especially when there's a thing on your time. Let's hit our three stories. Levels, baby. There are levels to that. 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 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. Right. Snacks is digestible.

Business news for you. Robert Her Financial, LLC, member Finra slash SIPC. For our first story, everyone is focused on Amazon Prime Day right now, but we are looking at the anti-Cyber retailer. That's because Costco's next core customer is what we're calling home lineals. Home laniels. By the way, happy second Amazon Prime Day in a Rojack. Yeah, said nobody. Perfect opportunity to get 70% off that Ti-W.

What's a T-W-W? You got to love a T-W-U. thing I won't use. They're discounting these T-Wos all over the place, Jack. You know, my uncle has a birthday coming up. He would want a T-WU-W. You want to get him a T-Woo. In the meantime, though, Jack and I jumped in Snackstyle

to a Seattle-based company that's not tech-savvy, happens to be Costco. Just about the only Seattle-based company that's not tech-sabby. Costco is based out of Isoquois, Washington. Lovely area. These guys probably use MapQuest printouts to drive the 18 miles to Amazon HQ. It's extremely low tech-off.

operation over there. They don't really care about e-commerce. And they did just bring back food samples. We should tell people that. They care about free samples, which I respect, because you walk into a Costco looking for a honey-baked ham. Why wouldn't you? You walk out with a sofa because you got a free sample on the N-C. It doesn't fit, but I couldn't resist. Now, Snackers, we all know big tech's been crushing it the last few years, but Costco stock has been having a ball too. I mean, up 44% in 2019, up 26% in 2020. The stock's flat this year. year so far, but sales rose by 22% this past spring quarter. Jack, can you hit us with the wildest stat we'd ever heard until another stat later in the story? The number of American households that are

members of Costco is bigger than the number of American households that have a cable TV subscription. I mean, Jack, you got more people buying bulk-sized popcorn than watching Shark Week. It's shocking. But Costco's profit puppy snackers. It's not the free samples. Here's what Jack and I find so fast-hanging about Costco, the Kirkland brand. This is Costco's own brand. They named it after Kirkland, Washington, which is where the original headquarters was. And if you like that stat we dropped just like 30 seconds ago, get this wild stat about the Kirkland brand of Costco.

They're doing $39 billion per year in sales, which, get this, is more sales than Coca-Cola corporation. Costco's own sub-brand, Kirkland, is bigger than Coca-Cola or Kraft Heinz. About 25% of everything sold at Costco is the Kirkland brand. Even the wine, one out of five bottles is Kirkland. And they're white labeling this stuff with some pro players these days. Jack, how about the Kirkland batteries? Yeah, you think they're like low-grade double-A batteries?

They're actually made by Duracel. They're like extras, the Durcell man. And so Kirkland has become a trusted brand at the lower price. And since there's no middleman brand like Duracel, that lets Costco offer a lower price and still take home a problem. But funny thing, Jack, and I noticed the portion of the portion of the market. of vegan and often healthy options under the Kirkland brand. That's increased, which leads to our takeaway.

Jack, what's the takeaway for our buddies over at Costco? Home millennials. Home millennials are Costco's next 20 years of profit. Home millennials, as in home, own, and millennials. Snackers, funny potential problem for Costco that Jack and I noticed, the meeting the age of their Costco buyers, it's 43 right now. 43 used to be a baby boy. Now a 43-year-old is part of Gen X.

And in a few years, that 40s. a three-year-old is technically going to be a millennial who's been Amazon priming their entire adult life. Although millennials are hooked on online shopping, Costco hopes that their spending habits will change once they become home millennials. Because get this, 37% of new homebuyers are millennials, most of them, most of us for the first time. Yeah, so millennials are like, living in the suburbs, maybe with a kid or two. And that's a lot different than living on a third floor walkup with a Nintendo 64 controller or two. Right. That your buddy, Timmy Broke, still doesn't pay you back for it. But it's not a lot.

Not a big deal because time heals all wounds. Costco is hopeful that millennials are going to swap out the online shopping cart they know and love with one of those huge physical Costco ones. Jack, we're not just the Tinder swipe and brunch generation that marketers made up back in 2010. Well, millennials are becoming home millennials and Costco must pivot to them. And Kirkland is how they're trying to do it. For our second story, Bitcoin miners just got kicked out of China. over the weekend. Okay, there's actually a Bitcoin mining stock.

So we're looking at Riot blockchain. Riot blockchains. The reason we're looking at it is because for the third time in the past month, Bitcoin actually dipped below $33,000. Bitcoin's been on a wild ride. It was $33,000 back in January. Then it was $64,000 in April, but now it's back down to $33,000. And this all began on Friday night.

You probably didn't even notice it unless you were based in China, where China's government ordered this. before the weekend. They ordered a crackdown on Bitcoin mining, specifically where Bitcoin mining is most popular, the Sichuan province of Southwest China. Maybe you think that's kind of crazy a little while, but get this, then China's government set up snitching hotlines. In case you suspect your neighbor is ignoring the government's rule to shut down mining, you can call a hotline and get Carl in trouble. I haven't seen Carl in five days and the lamps are still flickering in the living room money. And that's why 90% of China's Bitcoin mining,

is already shut down just days after the government decree. And that 90% is a pretty big deal because, get this, up to 75% of the world's Bitcoin miners are based in China. Nick and I love looking at the public stock market reaction to Bitcoin news. Jumping and snack style. So naturally, we turned our heads to Coinbase, to Square, to Tesla. That's where you're looking because those are the companies that are owning and transacting in Bitcoin.

But again, there's a public stock of a Bitcoin mine. it's $3 billion $3 billion riot blockchain step on down buddy we're talking about a pure play Bitcoin mining stock not one that's just like dishing Bitcoins around this way and that way for somebody who wants to invest in Bitcoin but different When you check out the earnings for riot blockchain it's not your typical earnings report

it looks more like a South African diamond mining situation On the first page they say that they mine 227 Bitcoin in May which is three times higher than last year's May mine Yeah I'm going a little further down Looks like our buddies over at Riot blockchain received 6,703 Ant Minor S-19's last quarter. Classic. Google Antminor S-19.

You'll find that it's listed on Amazon for $24,000. It's like a jacked computer for processing stuff. Snackers, pause this pot, go on Amazon, and you can actually purchase one of these maybe on Prime Day to mine Bitcoin. It's probably on sale. Riot blockchain has 81,000 of those processors. for their mining of Bitcoin. And we're assuming they looted up their Amazon shopping carts to get them. Now, Snackers, mining of Bitcoin is the mega computer processing you need to create new Bitcoin.

And the key here about mining Bitcoin is that as you're mining Bitcoin, you get rewarded in new Bitcoin for yourself. It can be pretty lucrative. And last quarter, Riot Blockchain made $23 million worth of Bitcoin mining revenue. Up 900% from the previous year. So, Jack, what's the takeaway for our buddies over at Riot Blockchain? Cryptocurrencies, they're fundamentally physical. Snackers, it's not just the way Riot blockchain's executives speak on their earnings calls.

The business model of this Bitcoin mining company, it is fundamentally physical. Riot blockchain acquired a 100-acre hosting facility in Texas, where they set up all those amp miner processors to mine Bitcoin at scale. Jack, if you're going to be mining this Bitcoin and doing it at scale, you need the electricity, you need the water, you need the ACs, and you need a whole lot of bathrooms. That's a lot of physical stuff. You also need Bitcoin mining to be legal in that country.

So Riot blockchain needs real estate. It's mining all this Bitcoin in upstate New York and it's also doing it in Texas. So this China news, it kind of means riot blockchain has less foreign competition from the southwest of China. It's like if Japan banned carmaking suddenly boom, Ford or Tesla, they would benefit a bunch. But also, the less value that Bitcoin has, the less value of the Bitcoin that Riot blockchain is mining. All right. So that's the funny situation. for riot, but they did just gain a geographic advantage with yesterday's China crackdown.

Because cryptocurrencies are fundamentally physical. For our third and final story, this came out of nowhere. WeWork just whipped up, get this, its best quarter in two and a half years. WeWorks back. Specifically, their best quarter since their canceled IPO. Yeah, remember, I mean, Jack, 2019, I was standing there with you. The IPO paperwork for WeWork revealed They weren't really a tech company.

The IPO paperwork revealed kind of added Newman's personal credit card. I mean, of course he can expense it. It's just a corporate jet. Snackers, in 2019, they were getting ready for a $47 billion valuation with an IPO. Yeah, they were. In 2020, the valuation had plummeted to $3 billion. And now, they have crawled back Al-a-Rudy to a $9 billion valuation. Kind of respectable, Jack.

They're not IPOing, but they will become a publicly, traded stock because they're merging with a SPAC that Shaquille O'Neal is involved with. Yeah, we know what you're thinking. It's the ShaqSpack. And it's called Bow X Acquisition Corp today, ticker symbol bow X. But by the third quarter, the merger will be complete. Ticker symbol's probably going to be work. But get this, Snackers.

Here's what Jack and I find fascinating about Wii work. They just had their busiest two months in the past two years. Because remember, this company had the double whammy of a brutally failed IPO and then a brutal pandemic. Also painful. And yet, WeWork just rented out 33,000 desks in April and 39,000 desks in May. Jack, let's bring a little context on that for us. The occupancy rate of all of WeWork's desks is 53% up from a pandemic low of 47%. Jack, I'm going to have to drop a little asterisk here. They also have fewer desks because they ended leases on 17 buildings. A double asterisk here. WeWorks still made an enormous loss last quarter.

Because they're still half empty, basically. I mean, or they're half full. It depends on your outlook in life. It's a metaphorical thing. Don't get all Adam Newman on me, Nick. If the jet comes back, then the trip didn't happen. But Snackris, WeWork is facing a pretty funny corporate situation here because Jack and I noticed working locations are being determined by your industry.

WeWorks would love if tech workers set up shop at a WeWork desk instead of the headquarters. Because tech companies are announcing flexibility on future work locations. as home options. Twitter was first to work from home at the beginning of the pandemic. And they're not even making people return if they don't want it. No, they're not. When or if you come back, it's your decision. For Facebook, Mark Zuckerberg is going to work at least half of next year from home.

And he's encouraging Facebookers to spend half their time at the office. Over at Google, work from home through Labor Day. After that, it's your call. Seems as long as you're moving fast and breaking things, location doesn't matter for the big tech companies. Interesting situation. A tech. Over in banking, it's a single. see your ASAP situation.

JPMorgan, Jays, and Goldman, New York's finest, they want everybody back. And many have already returned to their New York City offices. I mean, Bank of America, Jack, you're going to have to cancel the Hampton share. You've got to be vaxed up and backed by Labor Day. Morgan Stanley's CEO seemed angry at the prospect of more work from home. He said, if you can go to a restaurant in New York City, you can come into the office. He then proceeded to say, please double pleat your double Windsor Brooks Brothers trousers because you're coming back, baby.

Jack, somewhere on 200 West Street, there's a snacker listening to this pod next to a water cooler for the first time of 15 months. So, Jack, what's the takeaway for our buddies over at WeWork? WeWorks used to be for entrepreneurs and startups. The future WeWork, we think it should be a corporate perk.

Yeah, we do, because the world, it's fallen into two categories. You got work from home, work from office, and WeWorks prefer something different. WeWork is banking its future success on a flexible office future. So for work from homers, when your kid is screaming, the Wi-Fi goes out,

you just need some human interaction. You go to WeWork. And for work from workers, maybe you do five weeks in Silicon Valley, but then you need that one week pass to the WeWork Union Square when you're visiting your family, New York. You go to WeWork.

So we're thinking that tech could offer available WeWorkspace as a benefit to work from home employees. Banks could offer available WeWorkspace as a benefit to the work from office crew. And that would mean we work could become a work from anywhere solution in a world divided by work from home and work from work. You go to WeWork. Jack, can you whip up the takeaways for us over there? Just about every millennial from personal experience is under pressure

from in-laws to stop wasting money and join Costco already. Homell millennials are the key to Costco's future. So is the Kirkland brand. China is more and more opposed to cryptocurrencies. she wants, she gets because crypto is fundamentally physical. For our third and final story, WeWork is recovered as workers come back to the office. A flexible work future could make WeWork a key corporate perk. Now, time for our snack fact of the day. This one sent in by Chris Craft from lovely St. Paul, Minnesota. Billy Jean King is one of the greatest tennis players of all time.

And in 1981, she came out publicly as gay. So throughout her tennis career, Billy Jean campaigned for equal prizes in men's and women's tennis tournaments because they weren't even getting the same sponsorships. Well, she achieved that when Virginia Slims became the first corporate sponsor of a professional women's tennis tournament. And then Billy Jean King went on to famously win the Battle of the sexist tennis tournament at the age of 29. She also won 39 grand slam titles. And she brought money to women's tennis. Snackers, before we go, quick correction about the UEFA Champions League tournament from yesterday's pot. Yeah, Andy Reid, Peter Ball, and Sujohn Atticari told us,

that it wasn't 12 teams, it's actually 32 teams in that tournament. And the tournament is a $2 billion euro pot for the winners, but it's not split evenly across all the teams. Yeah, $2,000 if you're out in the first round, $82 million if you win in the whole thing. So that's not split evenly at all. No, it's not. Thank you, soccer fans. Thank you soccer fans.

Hand ball penalty on me. Everyone else, you look fantastic. Say, Jack, you need wings to fly, but don't let the wings hold you back. And if you're going to fly, fly Buffalo, not barbecue. If you know, you know. And before we go, happy birthday to snack or Crystal Chen over in Silicon Valley. And congratulations to Caden on buying the first home ever in San Antonio, Texas. Sounds like a home millennial, Jack.

And happy birthday to Carol in Sugar Lynn, Texas. And Brad and Melody, who met the old-fashioned way through a mutual friend, not named Hinge. Congrats on getting married down in Wyoming. And Jordan Santos from Oakland, California. Congrats on just loving the pot and thanks for the shoutout for a shoutout. Thanks for loving the pot. And to anyone else celebrating something today, make it a tea boy. Celebrate the wins.

This is Jack. I own stock of Amazon. Nick own stock of square. 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. If the jet comes back, then the trip didn't happen.