The Best One Yet - “How ya like dem Apples?” — Short-selling’s Matt Damon moment. Nintendo’s 13-year record. Nike’s artful Zucking.

Episode Date: February 2, 2021

WallStreetBets just used American Airlines stock to get back at shorting hedge funds (we’re getting Good Will Hunting vibes). Ninendo enjoyed its best quarter in 13 years, but we think it needs to pull a disney. And Nike just pulled off the first artful Zucking: it’s stealing like an artist from Crocs.$NKE $NTDOY $CROXHere’s the Google form to submit your voice-recorded SnackFacts (Black History Month) https://docs.google.com/forms/d/1Hu00HOlQ-qb6S7Jx4CgnGOfzrA67_j_SLFqxvFKinEQ/editWant 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 Tuesday, February 2nd. First question, did we see a shadow? Or was there no shadow? It wasn't clear. Groundhogs Day-wise, Jack and I were thinking about it.

We're just going to play this pot on repeat. Fun fact. Well, it's a great idea. It also happens to be our best podcast yet, T-B-O-Y. Jack, first story. How do you like them apples? We're jumping into short-selling the sophisticated and risky investing strategy that just got the goodwill hunting treatment.

For our second story, dibs on Yoshi, because Nintendo just had their best quarter in 13 years. Okay, so here's our strategy advice for Nintendo. Pull a Mickey Mouse, don't pull a Mario Kart. For our third and final story, Nike just zucked Crocs. They got zucked. This is an artful zucking, though, an artful zucking. It's the only socially acceptable form of zuck and well put, Jack. But Snackers, before we jump into that wonderful mix of three stories,

a civil rights icon who doesn't get enough attention, Philadelphia's Sadie Alexander. Sadie Alexander doesn't get enough attention. She's also an economist. Actually, she was the first black woman economist to ever get a PhD. She got her PhD in 1921 from the University of Pennsylvania in economics, a field that is still dominated today by white males. Okay, and get this, Snackers. Today, less than 1% of all doctorates overall are given to black women. Now, Sadie Alexander had a PhD in economics. Yeah, she did.

But she couldn't become a professor because of discrimination in her day. Yeah, so instead, she became the first president of Delta Sigma Theta, one of the largest black sororities. Then she figured she's got time. She might as well get a law degree too. So in 1927, she got a JD from University of Pennsylvania. Yeah, don't do less, apparently. With her degrees, she managed to change policy.

And when you change policy, you change people's lives. Snackers, she wrote a letter in 1947 to, President Truman about the economic benefits of desegregating our military. Jack, something about these topic sentences must have been pretty persuasive. One year later, an executive order on exactly that desegregating the military. That's not all. Sadie Alexander also marched with the Reverend Dr. Martin Luther King Jr. for civil rights in Selma, Alabama in 1965. No big deal. Don't do less. Snackers, this month, we are taking a moment each day to celebrate Black History Month. And we're also going to point out some of the structural racism that really kind of like lurks in our economy. Now, we need

your help with this, but we're not asking for tweets like we do in pretty much every episode. We're asking for your voice. That's right. We would love for you to send us a video or an audio clip of your Black History Month snack fact, just like send it directly to us. Here's all we need. Your name, your hometown, and a snack fact about Black History all in a 30 second or less clip. Poss it up on a whiteboard. We've got a Google form. You can submit this to in the notes of this podcast today. Today's episode, there's a link, there's a Google form, and if you submit your file,

your voice could grace one of our podcast this month. In the meantime, let's hear 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 hearing 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. investment advice. Not an offer or sale about security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, hedge funds tried to short American Airlines stock. And then Wall Street Betts investors said, how do you like them? Apple's. Yeah, they did. American Airlines, Jack, can you share with us the American Airlines earnings report? Shocker, because of lockdowns in the pandemic, people canceled vacations and the airline lost $9 billion last year. Okay, so Jack, that was the earnings report. Can you tell us about the American Airlines stock?

Terrible earnings report? Fantastic stock reaction. It jumped by 33% the day after the earnings. It seems to make no sense, and it also continues to make no sense because American Airlines is the most shorted airline stock out of all the airlines. That's actually key to this story because hedge funds wanted American Airlines. Airlines to fail, but then Wall Street bets punched back and made it rise. Okay, so Snackers, for most of us, when you want to own a stock, there basically are two options for stock ownership for just us regular people. You buy the stock if you think it will rise, and you sell the stock if you think it will fall. But to sell, you have to already own it. Okay, false on the two options because there's actually a third option that certain groups have access to

and it's called short selling. Short selling is when a hedge fund tells a brokerage. I think this stock stink, so I obviously don't own it. But I want to sell it so badly, I will borrow the stock from you just so that I can sell it. Do you have anything for me to buy? The brokerage is like, yeah, sure, you want this American airline stock to sell down? We've got a million shares. Snackers, short sellers can sell stock that they don't even own on hopes that it will drop, and then they can buy it back for lower and return it to the owner at a profit. Let that sink in. It's called shorting. And once they do that short, often these hedge funds will broadcast it, rooting for the stock to fall so that they can make money on it as it falls. They try to make it

a self-fulfilling prophecy. And by the way, not all brokerages allow short-selling. Oh, and by the way, hedge funds have special brokerages that are called to get this prime brokerages that let them do short-selling. In security situation, we know what you're thinking on this. It feels kind of mean that these hedge funds can short a stock and root for that stock to fall. It does feel mean that they're rooting for it to fall. But short selling actually has a healthy role to play in markets. Yeah, technically it does. Because maybe the short sellers think the American Airlines CEO isn't that great. The company's going to struggle. And they want to make sure everyone knows that as soon as possible. Or maybe the hedge fund is just really mean and full of mean people.

There's definitely some hedge funds that just have a shot in front. But with American Airlines being the most shorted airline stock out there, it's a sign that hedge funds think this stock is way too high, it's overvalued. Now is where things get interesting. If a short seller hopes that the stock will go down, which they do, the worst thing that can happen to their investment is if the stock goes up instead. And if this stock keeps rising, the hedge fund will try to stop the bleeding and buy the stock back to end their failing bet. And when they buy the stock back to end their failing bet, that drives the stock price up even higher. Forcing other hedge funds that are short selling to buy the stock to end their failing bets. Which results in what

we call a short squeeze. It's like the triple black diamond of investing. Shorts are incredibly risky because there is no limit to how much money you can lose. And that is exactly what happened over the last week between the Wall Street Betts Reddit community and the hedge funds. Wall Street Betts recognized that American Airlines was heavily shorted by hedge funds. They wanted the stock to fall. So an army of Wall Street Betts investors made the opposite happen. They started buying American Airlines stock like crazy. So then, when earnings were slightly better than expected, it caused the stock not to increase a little bit. No. It caused the stock to soar in a short squeeze. So Jack, what's the takeaway for our buddies over at Wall Street bets? Short sellers are experiencing

a Matt Damon moment. How do you like them apples? Short sellers, they are literally the Harvard guy in Goodwill hunting, you know, like the privileged access, the guy with the ponytail we've all seen him. Right. He's been having stock dinners talking with his buddies, rallying his his hedge fund fraternity to turn against one stock and root for it to fail. Okay, so if that's the hedge fund, the privilege dude, then Wall Street Betts is Matt Damon, aka Will Hunting. I got a number. Wall Street Betts Will Hunting is pushing up American Airlines stock to punish the hedge fund Harvard dude. Wall Street Betts has become a huge threat to the hedge fund industry because they have messed with short selling campaigns one after another. Just like Matt Damon, how do you like them apples?

For our second story, Nintendo just had its best quarter since 2008, Jack. And this year in 2021, we think Nintendo should pull a Disney. Okay, Jack, before we like jump into the story, we got to talk about this. Nintendo has one of the greatest snack facts we have ever seen. You look forward to Thanksgiving so you can tell this thing. One guy in Japan invented Mario, Donkey Kong, and Zelda. And get this, he is so important that one guy to the country. company that he was banned from biking to work in Nintendo. They wouldn't even let him do it.

Nintendo decided there is no helmet thick enough to protect that noggin. This guy's got a golden risk. Now, meantime, Nintendo, based in Kyoto, Japan, it's an 131-year-old company that is very close to a record high stock price. Now, if you look at their stock price, there's an American version of it that trades in US dollar, but look at the one that trades in Japanese yet. You got to do this because there is a one hour pause. in Tokyo to let you have lunch and not do stock trading. 1130 to 1230, it's great. And America just doesn't respect lunch.

I feel like this weekery needs to change this or something. Well, the stock for Nintendo, it jumped 7% yesterday. Thanks to like a $2.2 billion in profit over the holidays, not too shabby. That is the best quarter since 2008, which I think was the Nintendo Wii era. Okay, so here's what's fascinated Jack me about Nintendo. Their hardware over the last three months went from a device to a device to a game. a lifestyle product. It's basically part of the wardrobe because you wake up in the morning, you roll out of bed, you got your phone, check, sweatpants, check, Nintendo Switch. Check, you

could dock this thing in your TV so you can play video games, or you can carry it to the basement couch when your sister happened to take the remote away. And sales of this thing are incredible. Despite new competition this holiday season from the Xbox Series 1 and the PlayStation 5, they sold 12 million Nintendo Switches, a record high. Okay, so Jack, they sold 12 main in just a few months, what is the total number of switches they have now sold? This thing was launched in March of 2017, and they have sold 80 million. And it's a shocker that four years in, sales are higher than ever. Higher than ever. But here is the key. It's not just that sales are higher than ever. It's a very particular type of video game sale. Unlike other video game companies like Sony and Xbox,

Nintendo makes all of their games themselves. And it turns out, when Jack and I checked it out, they sold 76 million games last quarter. That means nearly every single. Nintendo Switch owner also bought a new video game for that Switch last quarter. So Jack, what's the takeaway for our buddies playing over at Nintendo? Hardware sales may have peaked last year, so in 2021, Nintendo should pull at Disney. Yeah, eventually, Nintendo is going to run out of new gamers. That's like the dirty secret here. And what it does, it's going to need to make money off of its existing gamers. And for that, Nintendo should book a Southwest flight to Orlando, Florida, and check out Walt Disney World. Yeah, because Walt, Walt's created a

of brilliance manifest in the movies, in the shows, in the shmovies on Disney Plus. But the real value for Disney is monetizing those shows into theme parks, lunchboxes, video games, playing toys. Jack, perfect setup because Nintendo owns some of the best intellectual property in the world. Can I introduce you to the Nintendo characters, please? Not just the OGs like Princess Peach and Kirby. They have new characters they can monetize like everybody from Animal Crossing, a viral game from last year. So here's what we noticed. In 2021, Nintendo's going to start Disneyfying its revenues with the delayed opening of Super Nintendo World its first theme park. They are partnering with Universal Studios, first in Tokyo,

which is going down this month, by the way, then in Orlando, come in next year, with Super Nintendo World. And Jack, if those open and Nintendo successfully Disneyfies its characters, that could Disneyify its stock. For our third and final story, Nike's latest shoe is all about the comfort economy. It's a slip-on, it's laceless, and it's a great example of zucking like an artist. All right, Jack, let's jump right into this one. Nike launched their first pair of slip-on,

laceless sneakers. It's a look-ma no-hand situation. You just glide right in. The name, I mean, this isn't like, I mean, it's a hard-it-to-say name. It's called the go-fly-ease. It doesn't roll off the tongue. The go-fly-ease.

It's the shoe equivalent of like a snuggie. If you look at this thing, it looks like a marshmallow tied-eyed itself, and then started doing crossfit. This isn't a clog, though. You're going to picture a clog with this thing. It's actually a sneaker that you put on your foot, but hands free. And then you can come home with groceries in your arms

and easily slip out of these shoes also hands free. Jack, and then it just sits by the door, waiting like a warm, open nest for your foot to return. It's a really brilliant design. You should check these out. And the reason we think it's kind of brilliant is because this single shoe captures two trends. Jack, the first trend, just straight up,

the comfort economy. These shoes aren't for your Zumba class. They're for your couch-to-closet pandemic commute. Okay, that's the first one. The second trend they captured is the current pandemic cleanliness trend. Apparently, these sneakers were inspired by Asian cultures where it's customary to take off your shoes before entering the home. Could you say this? Should be the international standard. Makes so much sense. Should be customary everywhere. I take my shoes off like down the hallway 30 feet away from my apartment. I actually wear Birkenstocks indoors, so I shouldn't be talking. But here's what we think is the wildest part about this shoe, the rollout. Apparently, this is what they call a soft drop because you can only buy the $120 shoes

if you're in the loyalty club. For the first round of sales, you got to be in the Nike loyalty club. And if you're in the loyalty club, you're getting access to Nike fitness classes, podcasts, and most importantly, you've downloaded the Nike app. That last part means if you want these shoes, you need to give Nike access to your data. Yeah, basically you're getting like a Nike digital tattoo. And with their data, that means they'll know what you're up to, what workouts you're doing, how you're moving your feet. And then that data jack is going to inform how they build their next

unprecedented shoe. So, Jack, what's the takeaway for our buddies over at Nike? This isn't a zucking. It is zucking like an artist. Zucking, the term. It's when you steal a product idea, just like how Facebook took Snapchat stories. They zucked Snapchat stories. This reminds us of a book Nick and I both love called Stealing Like an Artist, which is about putting your own Twitter, on someone else's idea. Okay, so there's like a gray area here, and we know what you're thinking. This whole slip-on Nike shoe sounds a lot like a slip-on crox clog. Makes sense to emulate Crox because Crox stock is up 500% since March,

riding on the comfort economy. But here's what Jack and I are thinking here. This isn't a stage five-zucking. It's not even in 100% sucking. This is zucking like an artist. Nike zucked the crox idea of having a slip-on rubber clog, but they artistically put on Nike's much better-looking style. To be clear, these look way better than Crocs.

Jack, can you whip up the takeaways for us over there? Hedge funds that specialize in short-selling are closing down because Wall Street Betts is ruining their strategy. Wall Street Betts just went full-on Matt Damon on the hedge funds. For our second story, Nintendo is the tech jewel of the Japanese economy. Nintendo, pull a Mickey Mouse, not a Mario Kart. For our third and final story, Nike just created something that took an idea from Crocs. Yeah, but there's sucking like an artist on this one by putting their own spin on it.

Now, time for our snack fact of the day. This one uniquely sent in by Reggie Ford in lovely Nashville, Tennessee. Reggie Ford is our first call-in snack fact snacker, so we're going to let him take care of this. Take it away, Reggie. The idea for the modern vaccination was introduced by an enslaved person named Onesimus in the early 1700s. To help prevent smallpox, he told his owner about a technique of inoculation used in Africa. Annesomus described how Africans would extract pus from an infected person and scratch it into the skin of a non-infected person to create a system of immunity. But the technique was considered dangerous.

It opened up the path for experimentation with vaccine development. Anisimus techniques eventually were used to inoculate soldiers during a revolutionary war. Perfect timing. Give some credit for this vaccine. Way back to Anissimus, an enslaved person from Libya in 1721. Snackers love being with you for T-Boy Tuesday. We want your snack facts. Check out the Google form in the notes of this episode,

and you'll be on tomorrow's pot. Maybe. Maybe. We're not committal on that one. If you know, you know. And before we go, congrats to Alex and Maria, two snackers celebrating their check at this eighth,

big number, eighth anniversary. They live in Knoxville, Tennessee, where we heard there's a statute of limitations, Alex. I think like eight and a half years and you're done. We're not nudging, but we're not not nudging. And congrats to Brian Leaventhall. Just got his helicopter license down in North Carolina. Congrats to Arosha Rasta, who just launched a startup down in L.A.

And Mark and Maria anniversary in lovely Mill Valley, California, right down the bridge. Happy anniversary to Nathan and Cece in Ann Arbor, Michigan, Go Blue. And congrats, Josh Bowers, just got promoted in Harrisburg, Pennsylvania. Happy birthday to Brandon Barron in San Francisco. And happy birthday, Steph, we don't know where you're from. Happy birthday, Lainey from Boston, Massachusetts. And Hubert Wang in San Jose. Happy birthday, Will Deal in Elkton, Kentucky, and Andres Ramirez in Miami, Florida.

And Ben Galloway in Baltimore, Maryland, and Christine de LaCerna in Manhattan. And Alyssa Rose Yun in Los Angeles. And Claire Davis in Chicago. And Aruel Sanivas in Sunnyvale, California. 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.