The Best One Yet - “iBlackjack at the iCasino” — Penn’s Barstool app. Home Depot’s pimped dividend. Chegg’s back-to-school bounce.

Episode Date: August 19, 2020

Penn National Gaming shares jump on hopes it can turn the Blockbuster of gambling into the Netflix of casinos. Home Depot’s biz loved that you pimped yo’ crib, so we’re looking at whether it can pimp its own dividend. And Chegg pioneered eTextbooks, but shares have doubled because it’s not your textbook tech platform.$PENN $CHGG $HDWant a shoutout on the pod? We got the form for Snackers to fill out right here: 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 Wednesday, August 19. Nicholas, it finally happened. The S&P 500 hit an all-time record. Not too shabby, but small businesses are losing right now. Yes, and big publicly traded businesses that are in the S&P 500, they're winning. It's painfully true and it's a painfully simple explanation, but we managed to make this our best snacks daily yet, Jack first story. Casinos are living in the blockbuster video era, basically. Doesn't sound good, but it's a painfully simple explanation. But we managed to make this our best snacks daily yet, Jack first story. Casinos are living in the blockbuster video era, basically. Doesn't sound good. Doesn't sound good. It doesn't sound good. It doesn't sound good. It Penn National Gaming shares have doubled this year because it's turning casinos into Netflix. For our second story, since you pimped your crib mid-pandemic, not bad. Home Depot has become the exhibit of the home improvement industry. Great snacker, by the way. We're looking at the upgrade it's made to its cash dividend. For our third and final story, just in time for back to school, Chegg is setting record sales in online textbook rentals. But the stock has doubled since it's not your textbook textbook business. I love that.

You see what we did there. Now, Snackers, before we jump into all that good stuff, in May, Jack Dorsey, CEO of Twitter, told Twitter employees they could work from home until the end of eternity. Then Mark Zuckerberg half-zucked the idea. Class-in. announcing that Facebook would aim for 50% remote workforce long-term.

With a half-zucking, you round up, it's a full zucking. So maybe you've had a work-from-home fantasy yourself out there. Yeah, you're thinking about instituting a strict, no-pants, code for the whole office. Full disclosure, Jack and I only wear shirts like a third of the podcast we actually record. You may even have stalled like a 200 megabits per second download speed Wi-Fi for your backyard yurt. Life goal. Standing desk yurt, everyone has it. But classic Amazon, it sees all of this movement towards a permanent work from home and it doesn't care. Get this Snackers. Jack and I notice that Amazon is adding physical offices in six cities the opposite of work from home.

We're talking 3,500 work from work. Amazon corporate jobs. New York City, Phoenix, San Diego, Denver, Detroit, and Dallas, congratulations. You get an Amazon office. You get an Amazon office. You get an Amazon office. One key we got to point out, no perks. Jeff Bezos doesn't believe in, like, free Greek yogurt handout. Jeff Bezos believes in the Church of Frugality. So you're not getting any, like, Greek yogurt for free. Don't build that year yet. Work from home isn't a guarantee.

Let's hear our stories. 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 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. 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. Robahood Financial, LLC, member FINRA slash SIPC. For our first story, Penn National Gaming is getting Wall Street love, even though its casinos are dying.

Because Wall Street thinks Penn is blockbuster, but it's turning into Netflix. All right, Snackers, Jack and I checked this out. We jumped in Snacks style. Earnings last quarter for Penn National Gaming, very specific name, fell because Penn has casinos not just in Pennsylvania. Yeah, it has casinos in 19 different states. Somebody called Ben Franklin. He's pissed. A little spoiler alert here. They were all closed in all night. 19 states. That's right. All of Penn National Gaming's casinos were closed the entire quarter quarter that we're talking about. So Penn managed to snag itself a $213 million, quarter billion dollar loss for the quarter.

Contrary to our experience, the house doesn't always win, apparently. Yeah, we don't perform well on the tables. Now, we don't know when Penn National Gaming's casinos will reopen, and that's a huge problem for the company. So then Jack and I were wondering, why is Penn National Gaming stock at a record high up 100, and 11% since the start of this year. It's a very simple answer. It's one word with either three or four legs. Depends. It's called bar stool.

Simple furniture. Penn made a wicked investment in Boston-born tabloid startup barstool just a little bit earlier this year. This is basically the Dunkin' Donuts of sports media. Deborah! Yeah. Two pumps. Hazelnut!

In the cup, Cuadda! Now here's the idea behind Penn National Gaming's acquisition of barstool, which was announced in January. Penn wants a piece of the first of the first. fast-growing online sports betting industry. And it just so turns out that Barstool's founder is a guy named Dave Portnoy, who speaks English with a Boston accent and speaks betting with a sports accent. Yes, he does. Well put. Now, Barstool has, give or take, and we're going to round here, a bajillion sports and culture podcast, and it's the number four ranked podcast publisher on Earth.

And it has hundreds of millions of people on social media who listen to everything Dave Portnoy says. So what Jack and I are noticing here is the epic collision of tech and media products colliding. Dave Portnoy is about to tell all of Barstool's audience to download the Barstool brand new sports betting app. That's right. Penn calls this the best in class sports betting product ever launching September because, again, they're heavily invested in Barstool. They own the company. Right, 36% of it now, and it could go up to 51%. So starting this fall, all of Barstool's

podcast and blog posts are going to end with a very clear CTA for the audience. Yeah, you want to balance sports. We just yelled to each other for half an hour. Download the Boston Sportsbook app. Put some money on it. Download cash apps. Sports Bed for app, app, app, app, app. Every podcast is going to drive business to this brand new app,

which is controlled by Penn National Gaming. We're calling it now. So, Jack, what's the takeaway for our buddies over at Penn National Gaming? The future of casino stocks isn't casinos. It's eye casinos. Snackers, you have heard a lot of buzz over the last couple of years about legal sports betting apps. You've seen him like Draft Kings and all those. But investors think this is a mega trend that will result in the legalization of all betting apps.

Tons of apps. For everything that happens in casinos right now, which will increase the size of the market for sure, because you can gamble from anywhere. Again, things that Jack and I are really bad at playing at. Now, evidence of this comes from Barry Dill, or probably a snacker, who's the founder and CEO of IAC, a company famous for investing in apps. His resume includes scaling Tinder, Expedia, Vimeo, college humor, which Nick and I loved when we're in college. Classic. And Investipedia. These are all online businesses. Well,

turns out this Barry Diller, the portnoy of digital media apps, invested a billion dollars through IAC into MGM Resorts, the famous casino in Vegas. Now, this news does not mean that Barry Diller is pivoting from apps to casinos. It means he thinks casinos are becoming apps. That's why he's invested. Slot machines, blackjack, craps, all the other confusing stuff, all from your phone while riding the subway. That's his vision. Now, this long-term bet that Barry Diller is making is a bet that casinos are kind of going to go the way of blockbuster. They might go out of business. But the casino stocks are now building the Netflix of gaming for the future.

And it starts with Penn National Gaming and the Barstool Sports betting app. For our second story, with American spending zero on entertainment fashion and leisure, you're spending thousands at Home Depot. Pimp Yo Crip. Yes. Has Home Depot at a record high stock. And that's because Snackers, this is a big box store that specializes, it literally specializes in big boxes. That's what they do. Nick, everything you buy Home Depot comes in like an enormous box. You better have a pickup truck. Small, we're unfamiliar with that term, sir. Now, from May, June,

and July, you canceled your vacation. Yeah, you did. You ended your gym membership finally because you can't even go there. You didn't buy new going out clothes, whatever those look like. And you didn't drop 50 bucks on Laws Garden Keani because you know it's really 12 bucks. Dead. Americans spent all that saved money at Home Depot on things like Adirondack chairs, a hedge trimmer, a Coleman cooler. Must be nice. All that added up led to a 23% sales jump over at Home Depot. That is huge growth for a company that already is worth $300 billion. Translation, that is 33 lifts. You could fit 33 lifts in a single Home Depot. Translation, that's like a six-foot dude who's in high school and then adds eight more inches to his nodded.

in college. Derek? Derek? What have you been eating Derek? Nick, a late growth spurt like that tends to just not happen. But here's the weird thing, Snackers. The stock for Home Depot after they made this earnings announcement fell 1% after the call. Because the CEO stood in front of reporters after the earnings report. Yeah. And he didn't look that excited. No. Just not that much enthusiasm from this guy. It's like you just had a fantastic corner. Can you give me a grin? And what this CEO apparently is claiming, the reason he's so down, early signs that the spending boost Home Depot just got from stuck at home Americans, he doesn't think it's going to last.

Think about it. The stimulus checks for $1,200, they already got spent. And 30 million families just recently lost their $600 a week extra unemployment benefits. You already pimped your home with the brushed brass sconces. You're not going in for a second round of sconces. Unless you got a second home to pimp, which is like rare. Must be nice. Now, a company like Home Depot is only as legit as its last retained customer. Chlorox also got a surge in sales thanks to the coronavirus,

and they believe that cleaning behavior like OCD, like don't want to be near germs, that is here to stay. But Home Depot thinks that those new floorboards you just got were just one-off purchases. You're not coming back for more. Basically, investors send stock down because Pimp your crib, it's like a weather. Jack and I was talking about this.

You spend big ones and hopefully never again. So Jack, what's the takeaway for our buddies over at Home Depot? Home Depot stock, which is ticker symbol HD, is a profit puppy for shareholders. We're not talking about a Home Depot product being a profit puppy. We're talking about Home Depot, the stock. And that's because we noticed one line in Home Depot's earnings report. On September 17th, we are paying each shareholder of Home Depot a $0.50 per share as a cash dividend.

Let me know your Vendal account. That is not just a one-off. That is the 134th straight quarter that Home Depot has paid a dividend to shareholders. like a check from grandma on your birthday, but every three months. Now Home Depot stock is hitting $285. It's up 30% this year. It's a clear corona economy winner. That's one reason you might be pumped to be a Home Depot shareholder.

But even if the stock hadn't rose this year, each share would have received six bucks in cash thanks to these quarterly dividends. Thanks to the dividends. That's a 2% return considering the stock price, which isn't big, but it's not nothing considering it's just dividends. If the stock price didn't move, you'd do that. get a 2% return just from the dividend. Home Depot is a profit puppy already today. It just doesn't get as much future hype love as like Amazon does. For our third and final story, textbook legend Chegg is soaring as the school year kicks off. You've racked up a decade of degrees you've accumulated. They have a decade of acquisitions that are finally paying off. Now Snackers, we have all

been there, Jack, the title. Principal Foundations of Calculus, Volume 6, Edition. because edition four uses different numbers in that example on page 38. So you got to buy addition six and it's going to cost, you know, roughly $346.26. Never a round number of these rip-off textbooks. Jack, what's the weight of that textbook, by the way? It's going to break your back because it's 14 pounds. I hope you got a military-grade backpack. Turn to Chapter 6 and herniated disc along the way. Oh, good news, though. It comes with a CD-ROM and an online portal. But don't worry, you can offset the cost because you can sell it back at the bookstore at the end of the semester for 50 bucks.

The textbook industry makes absolutely no sense. So a couple of founders over at Iowa State came up with this idea for a company called Chegg. And these Iowa State Cyclones must be English majors because Chegg is a mashup of chicken and egg. Beautiful. Because which comes first, the job or the education? Or is it the education and then the job? The core business of Chegg is selling or renting textbooks online for much cheaper than like the Middlebury College bookstore is going to sell them for. And the results are showing right now in the coronavirus.

be 63% surge in revenue from last year. And the stock has doubled this year. But there was one number that Jack and I found way more fascinating. Chegg doesn't just have customers. No. They announced a 60% jump in subscribers last quarter. Subscribers added more subscribers in the last three months than they did in all of 2018. And these subscribers are paying like 20 bucks a month for the Netflix of getting smart. That's right. Snackers, this company Chegg has made a decades worth of acquisitions and it is finally paying off right now. In 2010, they acquired Kramster, which sounds like my nickname in college, but it's actually the original homework helper online. Then they snag note hall, the Craig's list of notes. Then they snag study blue, which is like convenient flashcards on like your phone. And then they

grabbed a coding boot camp because if you don't have a coding thing, then no one gives you like any credibility these days. And thanks to that arsenal of ed tech companies they've acquired, they're now offering a subscription study pack for 20 bucks a month. This is an online tutor, solutions to the toughest questions. They got a mass solver or a written tool and it's all in subscription form. Basically, they're selling you the textbook and then they're selling you 20 bucks a month study pack to make sure you get the A. Textbook isn't always enough. 1995 a month because venture capitalists won't talk to you unless you got a subscription product. Now, the average American college student is not what you're picturing in your

head right now. The average college student in America is 25 years old and nearly half of them are employed, 40%. It's not just the eight. 18 year old with the Scarface poster and the godfather poster so that everyone in the dorm knows how tough they are. No, they're not getting bankrupt by parents. These are working adults who want to pay 20 bucks a month because they got to keep cost down and they got to get some skills. They got to bring food home to kids at the table. That's who Chegg is targeting. So Jack, what's the takeaway for our buddies over at Chegg? Chegg's true value is that it owns the entire customer value chain. Snackers, most platforms are just connecting like a user with a service. They're matchers. Basically, a middle.

man, look at Airbnb. They're pretty much cupid for like sweet pads for the weekend. They do not own that three-story Malibu condo. No, they don't. They're just finding someone who wants it for a weekend. But Chegg owns everything that it offers, every part of the value chain. The transaction, the lessons, the quizzes, the study guides, the distribution channel, and the data from all of its four million users. That is all Chegg. The value for Chegg investors isn't in just like one of these touchpoints. It's in all of them. The CEO calls this disproportionate value and investors agree. Jack, and you'll whip up the takeaways for us over there. Penn National Gaming Casinos are closed. Yep. But its stock is at a record high. Investors don't care if the casinos go out

business as long as Penn moves gambling into its app. Home Depot one last quarter as Americans pimped your crib. But next quarter, it might not because your crib is already gotten pim. Third and final story, Chegg is the Netflix of Education. And like Netflix owns its original content, Chegg owns its original flashcards. Now, time for our snack fact of the day. This one tweeted in by Ankit Angkorwal, and it's a messed up study from 2016. So apparently genetic data like DNA and RNA. Good stuff. They use acronyms because they're so tough to say. Yeah, case in point, membrane associated ring, CH type finger one just gets short into March 1. Now, understandably, Microsoft Excel accidentally misclassifies that name as the date the first day of March.

It thought March 1 was March the 1st. So this study looked at... 3,597 published science papers and found that like a fifth of them were affected by those Excel errors. Yeah, science papers kind of need Excel. So scientists have recently renamed a whole bunch of human genes. Yeah. So that Microsoft Excel stops misreading them as dates. Feels like the kind of thing, you know, Apple wouldn't have messed up.

Before we go, Snackers, happy Zero Birthday to Jack Arthur Brannenberg. He was just born yesterday. Jack Arthur Brannberg. Happy Zero with Birthday. Happy first birthday to Rion Patel in Olath, Kansas, and Sophie Yurley in San Jose, California. And Amanda Chin's 19th on Staten Island. And Jody and Louisville, Kentucky, home of Muhammad Ali. And Jordan Hormons in Charlotte, North Carolina.

And congrats on the first day of business school to Davis Harano. And Jenny Gow got the return offer. She's employed in Reading, Pennsylvania. Cha-ching! Snackers, you look fantastic. Ask your friends, H-Y-H-Y-S-D. Have you had your snacks daily? We'll see you tomorrow. Jack, I own stock of Amazon.

If you know, you know. 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 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.