The Best One Yet - “How the election affected stocks” — The post-election surge. Uber/Lyft’s Prop 22 win. A liquor legend’s moment.

Episode Date: November 5, 2020

We got you covered: Big Tech, gambling, and cannabis are the stocks making post-election moves. Uber and Lyft shares surged after winning the most expensive ballot initiative in California history. And since you probably poured yourself some top-shelf stuff Tuesday night, we’re looking at the latest update from Corona-brewing liquor legend Constellation Brands.$UBER $LYFT $GRUB $STZGot 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 Thursday, November 5th. Snackers, Nick and I are here for you because markets jumped big for reasons we'll get to in a second. That sounds like it's going to be our first story. Jack, is this the best one yet, by the way? This is a T-boy.

Snackers, the election isn't over yet. True. But three big stock sectors are already moving because of it. Jack, we got to drop a hint on this one. Here you go. Here you go. Zuck is betting on CBD massage oils. I like what I did that.

I actually didn't know where you're going there, but now I got it. Second story, Jack? The most expensive ballot initiative in the history of California just ended. Snackers Uber and Lyft, their shares searched 10% on good old Prop 22. For our third and final story, on election night, you poured yourself an ale. Maybe you poured a pinot. Maybe you sipped a sobbing yon. Mixed up a cosmopolitan.

Jack calls him a cosmopolitan. Liquor legend constellation brands knows what you're drinking. True story. We're jumping into it for our third and five. But Snackers, before we jump into that wonderful mix of stories, it was stressful and tense evening out there. It is Wednesday afternoon as Nick and I record this podcast. Full disclosure.

So our emotions are still raw. And like we said, it is actually going to be a stressful intense few days until this is over. Jack and I are going back to like the lessons you got in middle school. Patience. It's still key. To quote our buddy Frank the tank from old school, we have to keep our composure until the last vote. Jack, we just got to pass athletics. Nobody freak out out there. As we said Snackers on Tuesday, we knew it would take Pennsylvania longer to count their votes

because they have different House rules than Florida does for election. Classic sandwich situation takes longer to eat a cheese steak than it does to consume a Cuban sandwich. That's why we simply won't know the final result of the election on Tuesday until all the votes are counted. But one thing Jack and I do know is that the thing we do best is whip up three wonderful stories for you that you're not going to get anywhere else. Nick, there's one thing I'm 100% certain of. This is the best one yet snack style. Jack, let's hit our TV OI. 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 the hearing food is 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. 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 Rob her financial LLZ Member Fenra Slash SIPC For our first story Stocks just jumped yesterday

Because Wall Street Doesn't wait for all the votes To be counted Yeah Wall Street was happy Moving on incomplete results And they're glad That it looks like Divided government

Is what we have in America Energizer Bunny situation It's going and it's going And it's going and it's going Snackers by Wednesday morning Americans had decided who their president should be But here's the key issue. That decision hadn't been fully counted yet. But from the incomplete results,

it is pretty clear that the House will probably be controlled by Democrats and the Senate will probably be controlled by Republicans. If so facto add that up, that means we're going to potentially have ourselves with the divided Congress for two more years. And that means regardless of who ends up winning the presidency, there is a low likelihood that that president will be able to pass any major laws because of divided Congress. Jack, feels like, we would have fewer Batman laws, more like Robin Law's situation kind of thing. The biggest law we're going to pass is a definite sidekick law. It's going to be, it's definitely a Robin law. But here's the funny thing Jack and I noticed. Snackers, you know who kind of won

the election? Zuck. Zuck kind of won the election. You can actually hear him like with his massive size of relief because he like, he breeze very loudly all the way from Menlob Park. So far, Snackers, misinformation on social media was not the story on election day. Jack, you're crazy Ann Ed in his conspiracy theory. That got less traction than CNN breaking news. That's a good thing. Now, the president did predictably and falsely claim that he won on Tuesday night and that if he didn't win, then that's the result of voting for us.

But then Twitter and Facebook did exactly what they said ahead of time they would do when that kind of thing happens. Yeah. They labeled those statements by Trump as not verified and like asked us to be patient and wait for votes to be counted. Add that all up, Mark gets open on Wednesday morning and invest. Investors boosted all the big tech stocks above everyone else. Amazon, Apple, Facebook, Google, they all jumped by at least 4%.

That's because before the election, investors were a bit concerned that if there was a democratic sweep, that could bring some big change to big tech land over in Silicon Valley. We're talking change that wouldn't have been good for those tech companies, like breaking them up or saddling them with tons of regulation. Clamping down on Zuck over there. But divided government reduces the chances that that happened. But it wasn't just big tech who kind of won the election here. You had other two big personalities who made their presence known on Election Day.

Yeah. Americans in nine states loudly said that they want to be able to smoke weed and gamble. In some states, they want to do it at the same time, Jack. Louisiana, Maryland, Nebraska, South Dakota, they all voted to legalize sports gambling in some form. Boom, draft kings and Penn Gaming stocks rose 5% and 7%. Then Arizona, New Jersey, Montana, South Dakota, Mississippi. Do you see South Dakota in there twice name? I saw it. They got an overlap. Vendigram situation. Those states voted to legalize marijuana in some way. Jack, Oregon saw your pot legalization and raises all those states one psychedelic magic mushroom reform.

Yeah, Oregon, Oregon, Oregon, wow. Yeah, they actually did a magic mushroom reform. Psychedelic drugs, legal in Oregon. But despite that good news about cannabis, cannabis stocks actually fell Wednesday morning because they were disdemeanor. disappointed that the Democrats didn't sweep the House of the Senate and the White House. Yeah, if you're a cannabis doc CEO, a few states legalizing is good, but you really were hoping for that nationwide decriminalization that would have come with a potential blue wave. So Jack, Wal-Zuck is bedding on CBD massage oils. What's the takeaway for our buddies over in the United States? The first reaction isn't always the right reaction on Wall Street. Snackers, we understand there has been pent-up anxiety. After a note, give or take, 700

days of campaigning. But yesterday's stock jump, which like investors were pumped about, that could definitely undo itself in the coming days. Jack, you're bringing me back to 2016 when you and I were just a couple young whippersnackers. Wippersnackers. Yep, the election just happened. Jack and I were running our startup market snacks. And we noticed that market sank, you know, immediately on news that Trump had won that election in a surprise. Investors globally freaked out on news that Trump was going to win. But then the S&P 5th, in the coming days had one of the best November's ever, totally undoing that first reaction. The S&P 500 plummeted and then it surged for the next month.

Snackers, we won't know the final results of the election until all the votes are counted. But we do know that stocks will probably swing until then and even after. For our second story, Constellation Brands is the largest booze company in the United States. And it knows what you were drinking on election night. Oh, Snackers, after like one and a half years, Jack and I noticed that Constellation is finally about to close a big deal to sell off a billion dollars of its cheapest wines. Now, I've got to say, I'm taking personal offense to this list of cheapest wines because Claudeau Chardonnay, they're selling it because it's cheap. That was top shelf at the Olive

Garden when I was a waiter. I'm not kidding. Seven bucks. What were you up charging on that one, Jack? We were charging seven bucks a glass, which was double the house white. Let me tell you. If you know, you know, must be nice. Was it a good vintage. If you're selling it. celebrating something big, you go Clodubois, OJ. Maybe you go with the $6 Ravenswood Zinfandel instead. Jack, how's that one looking? Those cheap, quote-unquote wines are both out at Constellation brands now. Jack, how about the $130 million cheap New Zealand wine facility that they own? Sold to a company that likes cheap wine brands. There's a rough situation going on for cheap wine at Constellation. But in the meantime,

look in your recycling bin from Tuesday election night. You'll see you. a reflection of Constellation Brand's latest earnings report. Yeah, here is their earnings report in a single sentence. You're buying fancier alcohol and you're buying a wider range of alcohol lately. A diverse shelf of premium booze. That's what Constellation does. And that is why Constellation Brands is finally selling off a billion dollars of cheap wine. Even though it costs the same amount of like grapes and work to create a Clodubois versus like a $25 bottle. It's the same family of Italian women. It's the same family of Italian Women who are stomping on the grapes for every winery. No one knows that. For some reason, some bottles can sell for 25 and others just seven.

But the other funny thing we learned from the recent earnings report at Constellation, that's the same situation going on for every type of alcohol. High-end beer is growing at a faster rate than like the frat juice in the basement. And top shelf bourbon is growing at 27 percent. Lower end whiskeys are only growing 15%. That's why Constellation is selling off its low-price wine, because the higher-end stuff is selling more anyway. Jack and I got to taste this and we said, you know what, we're going to take a break on election night, jump in a little more snack style and see what else is going on over at the nation's largest liquor company. Constellation Brand's deck, which is like for investors to try to get you to buy a stock,

it sounded more like a political strategy deck from some DC think tank. This is the kind of thing when you were interning in like sophomore year down in Washington, D.C., they made you come up with a deck like this. Awkward slide 24. Hispanics love our brands. We repeat bold letters in italics. Constellation brand says Hispanics love our brands. Half of its beer drinkers are Hispanic and 65% of Modelo drinkers are Hispanic.

They took it a step further and then announced their Corona brand resonates with, quote unquote, multicultural men age 21 to 34. I can say Corona brand resonates with me. I'm not sure if I fall in that category. Oh, and their new sparkling salsa, refresca resonating with women. 21 to 34. It's a demographer's dream this day. It is.

That's a beautiful way to put it, Jack. So, Jack, what's the takeaway for our buddies over at Constellation Brands? Constellation Brands lost on Tuesday Election Day because cannabis. Snackers. Let's go back to 2017. Constellation buys 10% of cannabis producer canopy growth. It's since up to that ownership stake to 39%. It owns almost half of the planet's biggest cannabis company.

That's right. Earth's biggest cannabis company. It's basically canopy. It's like the general motors of marijuana. That's how you've got to think of it. And they want cannabis because, Constellation hopes that someday you will have a THC and or a CBD infused beverage, and that's going to become like the new Coke.

We also got a little fomo here because Gwyneth Paltrow just invested big in a floral tonic with cannabis infused into it. What is floral tonic? Jack, that is a marketing strategy to make you pay $7 more for a drink. Gwyneth. Gwynny! Despite these positive trends, Nick and I have been disgusting, Constellation stock fell 2% yesterday because there was no blue wave in the election, which means less less

likelihood of federal decriminalization of cannabis. And we're thinking that cannabis policy has really expanded beyond just affecting cannabis stocks. For our third and final story, the most expensive ballot initiative in California history just got passed. It's Prop 22 and Uber and Lyft are winning because voters can't imagine not being able to Uber or Lyft. Now Snackers, it's not that hard apparently in the state of California to like get an initiative that bypasses your state legislature and get everyone in the state to have to vote on it instead. And when California's House, Senate, and governor all passed AB5, a new law, that is exactly what the gig companies decided to do. Yeah, this thing needed to be rebranded. I mean, it's never a good, it sounds more like honestly,

it sounds like a disease. AB5 kind of sounds like a droid in my opinion. It was the law that dictated that Uber, Lyft, DoorDash, and the other gig companies, their drivers must be treated it as full-time employees. So then Uber, Lyft, and DoorDash would have had to pay up for some nice perks like, you know, your health insurance, your minimum wage, yada, yada, yada. So they pulled a referendum instead. Uber, Lyft, and DoorDash financed a ballot referendum called Prop 22 to override law AB5. They basically said, state of California, we don't like your law, so we're going to propose a new law, and we're going to have the entire citizenship of California vote on it. Everybody in California had to check yes or no on Prop 22. And with 17,

22% of the vote in as of this recording, it is clear that the yes have won. So it looks like ride-hail and food delivery companies won't treat their drivers like employees after all. They get an exception thanks to Prop 22. But Snackers, here's what Jack and I find fascinating about Proposition 22 that was put on California's ballot. We knew it would win. Yep. I mean, it's just David versus God. This is a unique situation. On the one side, you got all the gig companies who cooperated to campaign for yes, vote yes on Prop 22. This is like billionaire row, Uber, Lyft, DoorDash, Postmates, Grubhub, Instacart. They all put their hand in the middle and they said, let's go. It's a captain planet situation, the earth, the wind, the fire, the whole thing.

Those deep-pocketed companies committed a record-breaking $200 million in lobbying and campaign and political ad money for the vote yes campaign. Okay, so you got $200 million basically coming from Uber and its buddies. And then you've got it the labor. unions on the other side. Labor unions is the David to the Goliath. They could only scrounge up $19 million from their carhart khakis, although 19 million is a respectable number. It's dwarfed by Uber and co. That's like the cost of an Uber to go from one side of Tribeca to the other on New Year's Eve, Jack. It's brutal. So they had the finance advantage, but the gig companies also had two secret weapons. Okay, the first one Jack and I'd like to point out is that their apps are actually

the world's greatest billboards. They have been downloaded by millions of California. who like getting rides and getting pad tie delivered. Boom, that means you're getting push notifications, emails, banner ads, every time you opened an Uber app telling you to vote yes on Prop 22. Nick, didn't you get shamed recently by an Uber push notifications? Honestly, I'm living in San Francisco right now, and I'd wake up to like a text from Julie, a single mom doing Uber and lift 10 hours a week. By the way, don't disappoint Julie.

Vote yes on Prop 22, courtesy of her buddies over at Uber. The other secret weapon these gig companies had, they knew Californians didn't want to live without them. Yeah, so true. And these companies like Uber, they threatened to shut down in California if Prop 22 failed. Add all that up and $200 million and $200 million push notifications later, Prop 22 is going to win in California. Uber stock jumped 15% yesterday.

Lyft lifted 11% in Grubhub Bros by 3. So Jack, what's the takeaway for our buddies over in the entire gig economy? This is still a win for workers. Snackers, if Prop 22 lost, full-time employees, status for Uber driver Julie, kind of would have been a nice thing. But then Julie would have lost the job flexibility that an independent contractor status affords you, or Julie may have ended up with no job at all from an Uber-O-Lift. Instead, since Prop 22 is going to win, she will still get some perks, though, and it's kind of nice. Yeah, it's like Julie may get guaranteed minimum wage,

plus 20% for hours worked, one of the benefits of Prop 22. She'll also get some cash subsidies if she works 15 hours a week or more to pay for her own health insurance. And she may get to disability coverage too. The initial AB5 law to give Uber drivers more rights ultimately didn't work. But the work is it ain't to protect still one. Jack, we're going to put you to the test in this one. Can you put that German triple major to use and VIP up the takeaways for us on Deutsch? Auf Deutsch. No, I can't. Yeah. Snackers, the election isn't done being counted, but Wall Street seen what they need to see. Divided government gambling and cannabis, and to name a few, that's what they're saying. For a second story, Constellation Brands made progress

towards ditching its low-end wine business. No blue wave, no green wave. For our third and final story, Uber and its buddies can continue treating their drivers as just independent contractors. In the meantime, workers just won at least some rights. Now, time for our snack fact of the day. This is the rare but fantastic group snack fact from Mr. Conklin's Carlisle High School class of business.

Nick, the Keystone State of Pennsylvania might as well be called the gas station state. It has the oldest gas station in the United States. The name of the gas station, they're keeping it simple. Wright Guards, and it's located in lovely Altoona, Pennsylvania. Rye Guards full-service gas station. That means you don't get out. They pump for you.

And, Nick, isn't it amazing that those gas pumps know when to stop when the tank is full? They're so smart. The original AI, Jack. That's the original AI. This has been open since 1909, like pre-model T days, and it's still in operation today. Turns out it was originally a blacksmith shop because, you know, before cars were a thing, gas stations weren't really a thing at first. Snackers, we know things are still tense,

but that's today's pod. We hope we've been a fun and chill break for you today. Jack and I honestly have a blast with you every single day, and we can't wait to do it tomorrow. It's our honor. It's our privilege. We'll see you tomorrow. And before we go,

big congrats to Snacker Cole Banner G, graduating over in Dubai. And happy birthday to Coray from Istanbul, Turkey, and to James McMahon in Glenwood Springs, Colorado. And to Alejandro Pifferer from Ocala, Florida. And to Ray Gwo, Waldorf, Maryland. And to Maswee Endo in Long Beach, California. And to Leah Clapper in Gainesville,

Florida. And Molly Espino in Gallup, New Mexico. And to Cali over in Iowa. And to Dr. Harun Faroo in Kansas. And to Mike Venetia in Asheville, North Carolina. And happy birthday to Luke from Burlington, Vermont. Luke, we'll catch you late night at Alibaba's. Jack and I, we've been there. We've been there. Finally, happy engagement to Grace and Chris from Fremont, California. Got to imagine he proposed at the Tesla factory. Feels like he did. This is Jack. I own stock of Amazon.

Nick on stock of Apple. 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. not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.