The Best One Yet - 🔥 “I told ya so” — Lordstown’s mirage. Dave & Buster’s decay curve. US vs China econ winner.

Episode Date: June 15, 2021

Lordstown Motors was supposed to be the hero of electric cars, but it looks like it wasn’t even real. Dave & Buster’s is hoping a limited time margarita can cure the Decay Curve. And after a rare bipartisan bill and a big G7 summit, the economic victor of the US vs China is Made in USA.$PLAY $RIDEGot 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, T-Boy Tuesday, June 15th. Forgot to mention you. Yes. The Big Apple looked good last week. Jack, New York City looked fantastic.

The city was alive. We don't know what you've been doing, Central Park. Keep doing it. Frank Sinatra needs to write a sequel about that city. At a third New York, New York, New York, 8th Street was popping. Jack, we got to get back. Okay, now speaking of this pod,

did you know we're covering companies with ticker symbols play and ride today? I did only because I worked on this with you. But this is still the best one yet. It's TV-O-Y. Sounds like a T-boy. For our first story, Lordstown Motors was supposed to be the hero electric truck company of Ohio.

It just plummeted, though, because it may have faked too much before it made anything. I don't know if people are going to get the fake until you make it. We're going to roll with it, I guess. Let's go with it. Second story, America's politicians are unified on one thing. Yeah, they are. Opposition to China.

Well, the real winner of U.S. versus China already won. For our third and final story, David Busters, stock felt 84% in less than one month last year. Jack, the pure play arcade stock survived the pandemic. It's focused on hungry, hungry hippos now. What have you been up to recently? Yeah. A human version of hungry, hungry hippos. Real life, life size, actual thing.

More on that soon. Snackers, before we hit those three fantastic stories. Such a good mix today, Jack. It's not just wedding season right now. No, no, no. It's also engagement preseason. It is, Jack. it is. You know, you or someone you may know is probably prepping to pop the question right now in the

next few weeks. You or someone you're pretty serious with maybe listening to this pod right now. Yeah, you and someone who you're listening to this with maybe getting a little nervous right now as we're talking about this. Apologies to whoever that is. But new thing, not engagement rings. No. Not wedding bands. No. Engagement watches. Yes. Engagement watches. Jack and I noticed that this spring there was a 42% jump in watch searches that include. the terms wedding, couple, or engagement. The people at Google are like, what's going on? Yeah, but interesting what's going on because people are splurgeon on some chronograph chronometer

situation. Timepieces with a gasket, a gear train, and a gold mainspring. Apparently are the ultimate expression of love and commitment. Apparently engagement watch is now a thing. Now, of course, Snackers, the most common way to propose is a ring with a diamond. It makes sense because diamonds are forever. But what lasts longer than diamonds, Nick? I'm checking here. Time. Time on that watch. That lost longer.

So Snackers, do you get down on one knee with an object that exists for perpetuity? Or do you do it with one that is perpetuity? Diamonds are forever. But time is infinity. Let's in our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something illegal out the way. The snacks about the hair ain't 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 security.

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 Fenra slash SIPC. For our first story, this one's wild. Lordstown was supposed to be the Gandalf of electric trucks. But it might be the Gallum.

Yeah. It's dead. Jack, I don't want to pull a token on us over here, but there are lots of storylines you could write a story that in the world. So many storylines. Lordstown decided they wanted to be the hero story. The hero storyline. Here's what they did.

Lourstown Motors took over an old General Motors factory in Ohio and wanted to be the hero. Right. They rescued thousands of jobs from going away. And they even named themselves after that Ohio town, Lordstown. It only got better from there. They spacked last summer, went public, hit a $4 billion dollar evaluation. This was the hero electric truck company. They were also going to make trucking, which poloises a lot of greenhouse gases, electric,

which is great. And they got the ticker symbol ride for their stock. They got the ticker symbol ride. How was that still available? Well, Jack, now it looks like Lordstown may be a tragedy. Yes. As required by law in this country, Lloydstown Motors had to give investors a heads up last week. Yeah, they mentioned the words substantial doubt 10 times in this little filing, as in substantial doubt they could last another 12 months without needing to declare bankruptcy. Snackers, we control FD, substantial and doubt are 10 times next to each other. That can't be good. That was last week. And then yesterday, the CEO and the CFO both quit.

Okay. So the stock is down 39% since they said substantial doubt to the SEC 10 times in one document. So basically, Lordstown Motors, which was a hero, desperately needs cash. Maybe they'll find buyers of new stock. Maybe they'll find a lender. Maybe someone just buys Lordstown Motors. If none of those three things happen, then it will probably have to declare bankruptcy. Now, here's what Jack and I find fascinating about this Lordstown hero story.

It's kind of, and I told you so, a moment for a little company called Hindenburg Research. Hindenberg Research is a short-selling hedge fund that said on March 12th that Lordstown Motors was a mirage. That was their thought and they put out a report detailing all the reasons why. Okay, Snackers, in January, Lordstown got a lot of hype and a lot of PR for announcing that there were 100,000 pre-orders for the electric truck that they hadn't even made yet. Okay, so Jack, tell me about one of the big orders. Let's look at the 1,000 truck order that was like a huge order for Lordstown Motors. Hindenburg tracked down the customer that apparently ordered a thousand of these.

It was a two-person startup working at like a Wii work. It's two guys in a co-working space, drinking kombucha, and just ordering trucks that they don't even necessarily have to pay for. Apparently, it was a letter in 10. It's like if your mom said, if you make a great... car, I'll buy it from the side. Okay, so Jack, then Hindenberg went a little further, called up some more customers. What did they learn about the $750 million truck order that Lortstown Motors said they would get? It led back to a two-bedroom apartment in Texas, which is rented by a company that doesn't even do trucking. Okay. So then Hindenberg went a little further and said, okay, we spoke to the

customers. Let's call up some former employees and current employees and see what's going on inside of the company. Well, Lordstown has been saying for a while that they'll start producing the truck this September. Employees are like, yeah, right. We are three to four years away from production. They went even further and said, yeah, right, right. A hundred thousand cars that we said we'd make. That's not even possible right now. Hindenberg Research also contacted a fire department in Michigan and found photographs and videos of the test electric truck from Lourdes Town bursting into flame. It literally exploded. The fire department came and these guys found the photos. Nick and I are thinking, fake it till you make it.

And if these allegations are true, Lordstown faked the demand for their trucks and the timeline for production. But maybe not long enough to actually make it. So, Jack, what's the takeaway for our buddies over at Lordstown Motors? The other role of short sellers is to unearth fraud and or deception. Snackers, Hindenberg Research, they're a short selling hedge fund that profits when companies fail. That's what they do. Sounds kind of messed up.

Yeah, it does. But they can also act like an investment. investigative journalist, which can be good. Now, in general, short sellers think of stock's over value. They think it should fall, so they actually bet against that stock. And sometimes the hedge fund rips on the company publicly and the stock falls, even if the allegations from the hedge fund are not actually true. Which sounds messed up and is messed up. Now, this Lordstown issue isn't resolved and we don't know for sure if all the allegations are true, but this does highlight the investigative work that some short selling hedge funds do. Yeah, this short selling hedge fund called up

customers interviewed the employees, went the full nine yards. They printed the receipts. They got the fire department on the phone and they snagged images that were like in the evidence closet. Jack, they basically did all the work that a muckrake and investigative journalist would have done 100 years ago. Okay, so this hedge fund sounds like a journalist kind of, but this hedge fund has a huge financial conflict of interest when they're telling the story. Their work is like completely driven by profit pursuits and not informing the public. Like a journalist. So this highlights the complicated, conflicted, and special role of a short-selling hedge fund. Investigate to make tons of money for yourself.

For our second story, the U.S. and China are already in a long economic Cold War. But two major developments in the past week. Huge developments. Show us there's already a winner of this economic Cold War. Jack, first it was grape bread, then it was the Germans, and then eventually the Soviets. Last week, made incredibly clear that now it's China and the U.S. is mobilizing to combat China. Specifically, the U.S. is mobilizing money to combat China. Snackers, the Trump era was all about tariffs. It was the taxes on things made in China. The Biden era

is taking a different tack. Yeah, it's government support for U.S. businesses to beat China. Which leads us to last week, the U.S. Senate passed a law in shocking bipartisan fashion. Jack, you don't see this every day, but we're going to call it the made in the USA commitment. That was an anticlimactic bill name. I think you're right. I think we should go with act on that, made in the USA Act. Now, we're calling this the Made in the USA Act because it's a direct response to China's made in China 2025 mega plan.

I mean, Jack, sit down, stand up, wait to hear these numbers. 68 of the 100 U.S. senators voted for this new Made in the USA Act. 68 said yes. Sackers, two-thirds consensus in this divided country is rare. You don't see that for like, I don't know, if they were voting on a three-day permanent weekend. That's when you'd see that. Oh, that'd be unanimous, actually. Three-day weekend should be permanent. Jack and I agreed, we got to make this a thing. It'd be a big win for the whole world. You tell your boss, it's a four-day work week. You tell your

friends, it's a three-day weekend. Now, the U.S. senators agreed that the government should spend $250 billion on long-term research development for America's critical industries of the future. And they single out computer chips because we got a shortage of computer chips. And it's why you can't get a car and probably can't get a port-a-potty. That was major news, but that was all inside the USA. On Saturday, the G7 finished up their fancy suede over in England. We're talking the G7 nations here. You got Canada, France, Germany, Italy, Japan, the UK, and the U.S.

And Jack, what's their new plan outside of the U.S? Their new plan is called Build Back Better World. B3W, the acronym, kind of works. Well, Biden must be thrilled about this. Yeah, his branding team has basically scaled the build back better concept. Now, all seven of those rich nations agreed to support the less rich nations of this world by financing major infrastructure projects. And Jack, that is a direct response to China's Belt and Road initiative, which is another one of their initiatives focused on building global infrastructure. Build Back Better World is like the Marshall Plan from post-World War II.

They're trying to win over the hearts, minds, and allegiance of the world's developing economy. So, Jack, what's the takeaway for our buddies in the entire United States? The real winner of the U.S. versus China economic tension is American corporations. Snackers, when the U.S. took on Russia in the Cold War, American military contractors are who profited enormously. The stark industries of the day. Love that. Made billions arming the United States and its allies. All right.

Here's what we're thinking. Today's conflict with China, it's less about the weapons. It's more about the tech goodies. Less intercontinental ballistic missile. I like what you're saying. More intercontinental cloud computing. Exactly. And the United States is dependent on China right now. So we're going to subsidize U.S. businesses to change that. That's the goal. This is all about U.S. made 5G, U.S. made semiconductors, and U.S. made other industries of the future so that we don't need to ask China for critical stuff.

There is a long-term economic cold war for development between the United States and China. Companies that win government-backed grants and government-backed loans, they may have already won. For our third and final story, Jack, you got to have mom's permission if you're going to do this story. You have to be this tall to listen to this story. Dave and Busters, the arcade chain basically almost disappeared last year. This is the Chucky Cheeses for adults. Yep. But it faces the same issues as McDonald's.

I mean, Jack, founded in Dallas, 1982 by a guy named Dave and a guy nicknamed Buster. Is that really true? It's true. Now, one year ago, Snackers, Dave and Buster had to let go for. 1,400 employees. They had to close all their locations and they had to warn that bankruptcy was probably coming soon. Jack, this chain almost died. But now, as of last quarter, they are almost back, baby. The three months that ended on May 2nd hit 73% of normal pre-pendemic sales for Dave and Buster. I mean, Jack, you thought indoor dining was a super

spreader event? Yeah. Have you tried adding in yelling, touching, and a whole bunch of machines? This is a pure play arcade stop. Love this. This is the Adults ran out of things to do industry. I mean, Jack, we got to talk about their siblings over here. You got top golf. You can do axe throwing. These are the other ones you could do. Can you tell us about folling?

Folling I did in the city of Detroit. Yes. It's bowling. Okay. But you throw footballs instead of bowling balls. And get this. Yes. Alex and me, we beat my two former quarterback brothers.

Okay, you got to keep us updated on the rematch. In the meantime, we asked Snackers on Twitter if they had any more ideas for like adults, ran out of things to do industry companies. What they got for us. Okay, so it looks like someone said escape rooms. Yes. Trampoline parks. And then you're ready for this?

Skydiving, but indoor skydiving. Oh, with the giant fans. Yeah, it sounds scary. Honestly, you had me a DZ Discovery Zone. I forgot about that. Now, Snackers, David Busters is two businesses in one, entertainment and food. And historically, revenues are split 50-50.

And to remind you to like return to Dave and and Busters in the last three months, they spent the last year dreaming up some LTOs. Some limited time offers. They're hoping the power of Yolo and FOMO will drive you back inside a daybo. Exactly. Like these promotional dishes, IPA, fish and chips. Interesting, intriguing, aggressive. Hawaiian chicken.

All right. Maybe, Jack, you could be interested in the mushroom stout burger, limited time only? Each of these names has a hint of alcohol sound and a hint of, like, food sound. Oh, well, Jack, wait to hear about the new temporary drinks they whipped up at Dave and Buster. Elder flower tonic sounds like something from Snape's Dungeon. Also highly curious about the bomb pop margarita, which sounds like the kind of drink that's going to physically hurt you. I looked into this.

It's actually a margarita where they just plop in one of those red, white, and blue firecracker popsicles on top. It's all about the simplicity that leads to the complexity. Your mouth is a deep shade of purple after you consume this thing. Oh, wait, but Jack, can you share the thing about the new games, like the crazy new games? Life-size, hungry, hungry hippo, only at Dave and Busters. LTOs to get you in the stores. So, Jack, what's the takeaway for our buddies over at Dave and Busters?

The real enemy of reopening retail is the decay curve. The decay curve. Snackers, this is actually a business concept that Jack and I noticed in McDonald's earnings reports, but we think it really applies here, best of all. It's when you excite customers with some new thing like an LTO, but eventually customers lose interest in that new thing. So consumption on day one is high, and then the curve drops by day 10 as orders. drop. Demand decayed. Excitement was extinguished. Dollars disappeared. So Dave and Busters creatively got

people in their stores over the last quarter with these fancy new things. With the LTOs. Because nothing thrills people like a bomb pop margarita followed by six minutes of running from a human hippo. Now our question for next quarter at Dave and Busters, here it is. What does the decay curve look like for your company? And how can Dave and Busters elongate the curve to delay the decay? Jack, can you whip up the takeaways for us over there? Lordstown Motors may run out of money and a hedge fund saying, I told you so. Short sellers, they can sometimes reveal fraud and or deception. First, it was the U.S. Senate, then the G7 responding to China's economic rise.

When it comes to made in the USA, made in the USA corporations may have already won. David Busters is an adult arcade company, ticker symbol play. Jack, the decay curve. Eventually, it's going to eat away those LTOs. By the way, full disclosure, I haven't been to a Dave and Busters, but I really do miss DZ Discovery Zone, Jack. Full disclosure, the wedding I was just at, their first date was at a Dave and Busters.

You're kidding me. No. Did they get an engagement watch or an engagement ring? Right. Engagement NFT. Now, it's time for our snack fact of the day. This one from the legendary Kendall Baker, author of the sports internet newsletter. The Montreal Canadiens are about to play the Las Vegas Golden Knights

in the Stanley Cup finals. That was fantastic, by the way, Jack. Now, the Montreal Canadiens franchise, they were founded back in 1909. That means the Canadians are older than the city of Las Vegas. That's because Las Vegas, the city, wasn't incorporated until 1911. Montreal's Canadians hockey team is older than Las Vegas's city. Emilio. Snackers, you look fantastic today.

Jack, we got to talk about this sweater you're wearing after the pot. I love what you're doing over there. You're picking up what I'm putting down. If you haven't yet, Snackers, tell your friends, ask them H-Y-H-Y-S-D. And post your favorite moment from today's pod on your Insta. Have you had your snacks daily? If you know, you know. Nick and I'll see you tomorrow.

And before we go, happy birthday to Brandy Tickel over in Guam. And congratulations on said wedding to Caitlin and Rich of Long Island. A great addition, Jack. Oh, and happy birthday to Wendy Tejas over in Los Angeles. And Samil Shah in Cincinnati, Ohio. And Jack Diego, congratulations. on the first Frappuccino over in Mission Viejo, California. Congrats to Nick Tran, who won a startup pitch competition in Seattle, Washington.

We want to hear your pitch, and Perry and Diaz just started her own ceramics business down in San Diego. Navid and Shayra just got married in Santa Barbara, the beautiful town in California. That is lovely, going to assume our pot invites got lost in the mail. And happy goodbye to Internet Explorer. Yes. Oh, gee, Internet browse. Since 1997, you were pre-downloaded on all our computers. And today, you're now gone.

It is the end. It's not a new beginning. This is Jack. And as I said, neither Nick nor I have been to a Dave and Busters. 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. VILIO!