The Best One Yet - 🐳 “It’s the ripple, not the splash” — Evergrande’s crisis. Hotel Peloton. The Emmys’ real winner.

Episode Date: September 21, 2021

Stock markets had their worst day in months because China’s got a brewing real estate crisis (cue the Lehman Brothers vibes). We noticed that Peloton’s website has a curious “Hotels” tab, so we clicked further. And the Emmy awards follow the money: Tech’s got the ca$h, legacy media doesn’t. $EGRNF $NFLX $PTON $AAPLGot 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. Tebow Tuesday, September 21st. Or, do you remember the 21st night of September? Is that cool in the gang? Ooh, the judges were looking for earthwind and fire.

It's not just wedding songs. Stocks just had their worst day since May. Yeah, the Dow fell over 600 points, actually because of the first story of this pot. Today's pod, though. Today's pod is the best one yet. T-B-O-I for our first story, Evergrand. actually does sound like a musical on Bradbury, doesn't it? It does, it does.

Evergrand, though, is actually a giant real estate debacle in China whose ripple effects are shaking markets worldwide. But our second story, Jack? If you haven't watched The Crown yet on Netflix, the Emmy Awards really thinks you should. I have so many people to thank. I want to thank my parents. I want to thank my wife.

I want to thank the big tech money. I want to thank the big tech money. For our third and final story, we noticed something funny on Pelton's website. There's a tab called Hotels. Hotels? Peloton. Snackers, Peloton at your hotel gym, the ultimate free sample. Great mix of three stories. Wild mix of three stories.

Before we head up, the tech industry is all about secrecy. Yeah, because if your idea leaks, you could get sucked. Or even worse, your planned PR rollout could get spoiled. Not the comms plan. No, I can't revise the press release. But Snackers, that is why the tech industry uses code names to internally brand new ideas before they launch. Right. Keep them like secret names like Project Charlie or Code Delta or Bravo or even Operation Desert Storm. Operation Desert Storm. Now internally having code names for

secret projects protects the information to only employees who are working on it or need to know. Externally, it protects the project details in case you accidentally blast your entire email address book about Project Hercules when you shouldn't have done that. What's to do with this guy in Hercules? Do you a big fan? Delete the email. I didn't need to do that. Now, Business Insider actually got their hands on some historic codenames from 10 actual Amazon projects. Yeah. And Jack and I jumped in Snackstyle and these Amazon code names were like borderline creative. For example, Jack, Amazon codename Project A. What was Project A?

Project A was a reference to Kindle. Back in 2007, this was Amazon's first physical product. Very nice. They started with the first letter of the alphabet. Okay. How about? Amazon Project Golden was Project Golden. This was the HQ2 sweepstakes of, I think, 2018 because Amazon's 25,000 workers was like a golden ticket.

How about Project Veritas? This one sounds fancy. Okay. This was when Amazon trained their warehouse workers to combat negative press by tweeting positive things about Amazon's workplace on social media. So they use a Latin word as the code name because that makes it more classy, less creepy. Okay. Snackers, for Tea Boy Tuesday, for today, we want you to tell us the likely code names of famous Amazon products. For example, Jack, how about Amazon acquiring MGM Studios? What would be the project codename for that?

That'd be Project Shake and Not Sturred. That works well. How about Amazon shipping products with no box? What should be the project code name for that? They haven't done that yet, but we call it naked shipping, so they should call it Project Birthday Suits. Snackers, we want to hear your Amazon secret codename ideas. Tell us what Amazon was calling the acquisition of Whole Foods as a secret before they did it. Tweet us at Robin Hood Snacks, Jack. Let's hit our project TV. You're tuned in the snacks daily. It's snacks about to hear ain't food. It's air candy. They don't reflect the views of the Robin Hood 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. The financial LLC member Fembra slash SIPC.

For our first story, the reason markets plummeted, China's real estate crisis has Lehman Brothers trending right now? And it's not the whale or the splash. It's the ripples that kill. Scared a lot of kids just there. That was a big one. You don't see those ripples coming. Is anyone a marine biologist?

Snackers, the index of America's top 500 stocks dropped a hefty 1.7% yesterday. Pretty big. Yeah, that's the worst drop in stock markets since May. But the real pain here is that stocks had been notching record highs for like months now. It had been exhausting like so many records on records. But bad news brewing in China caused millions of investors to sell their stock yesterday worldwide, cash out just in case things get worse. And the bad news here out of China, China's biggest real estate developer is on the brink of bankruptcy. Yes. The company is called Evergrand. And in Chinese, that means constant and big. Yeah, the problem, though, it got a little too big and a little too constant with the housing deals they've been writing up.

Oh, yeah. Evergrand was created in 1996, and they helped build China's real estate fueled economic boom that's been going on. What do I got to do to get you into this condo in Shanghai? Snackers, there's a lot of condos in Shanghai. According to the World Population Review, China has, get this, how many cities do you? do you think China has with over a million people now? Just sign here and sign here. And it's yours.

That's it. It's that easy. Nothing down. China has 160 cities with over a million people. It's a lot of brick and that's going to require a lot of money and a whole lot of Evergrand. And Evergrand built a lot of the apartments and the office buildings to hold all those millions of people. And Jack, how was Evergrand going to pay for all these lovely condos in Shanghai with the ocean views even though it's not there? Well, they amassed a ton of debt in the construction of those millions of building.

And here's the thing. The debt situation, China, has gotten so bad in real estate that 1.4 million people prepaid for those lovely Shanghai condo apartments. And Evergrand doesn't have enough money to build those 1.4 million apartments they're supposed to build or to repay the $300 billion in debt that they owe. Ipso facto ever-grant stock over in China is down a whopping 80% this year. The company's in so much trouble. They sort of forced their employees to give them a loan in the past months. Jim, how are the kids? Can we chat about your paycheck? Do you have a hundred bucks to spare?

Can you be a team player? So a huge question that will determine how things go from here on out. Will the Chinese government bail out this probably too big to fail real estate developer over in China? I mean, remember what she wants, she gets. If President Sheed decides, no, this company was irresponsible, we need to let them go bankrupt to send the right message, then China's real estate sector could come to a full stop. And that is when things get a little freaky because real estate is so massive, this is already spreading to other industries and companies. Not only are investors nervous that other real estate developers might go bankrupt. And they are.

But the suppliers who depend on real estate development like paint, the company that provides Evergrades paint, their stock is. down 30% in the past couple months. It's like if Sherman Williams was down because he had a housing crisis in the U.S. So, Jack, what's the takeaway for our buddies over at Evergrand and China? It's not the whale or it's splash. It's the ripples that kill. Snackers. Vibes back to 2008, Jack and I were in college, Lehman Brothers set the then record for biggest corporate bankruptcy ever. It was freaky. A lot of investors lost a lot of money on Lehman Brothers, but it was the ripple effects that were worse than Lehman's bankruptcy splash. Because after Lehman Brothers' stock and bonds became worthless, investors race to sell, protect their money, just sell this, sell that, get out of

here. Everyone panic sold. And that caused all of the stock prices and all of the bond prices to plummet. Well, fast forward 13 years, China's Evergrand is a whale that could die this week. And that would be a huge splash. But with three quarters of China's wealth tied up in real estate, the ripple effects could be really bad. Now, on the other hand, some experts are saying this comparison to Lehman Brothers, it's like it feels inappropriate. We've all seen the big short. The financial system in the U.S. was messed up.

And I guess China's real estate market is not that messed up. But in the meantime, China and the world are more worried about the ripples than they are of the whale. For our second story, you don't care who won the Emmys. But the stars care who won the Emmys. They really do. They really do. And we care about the companies that won the Emmys.

We do. We do. That we do. We put on Tuxes for this. And Netflix won gold. Again, Apple TV Plus, though, stole the silver from HBO. Full disclosure, we didn't watch the Emmys here. But the Emmys, the Grammys, and the Oscars and the Tosks,

Emmys kind of looked the best out of all of them. Yes, because Broadway was closed, bad for the Tonys. Movie theaters were closed, bad for the Oscars. And concert venues have been closed, bad for the Grammys. On the other hand, your account. was occupied by you and TV screens were more open than ever. So this was arguably the most significant and relevant Emmys ever, and we all still probably didn't watch it.

A whole lot of schmovies going on. And the biggest winner, the biggest winner of the whole Emmy series, it was Netflix. Let's step on down Netflix. Yes, they set a modern record for Emmy wins at 44 awards. The Crown and Queens Gambit were Netflix's big winners. both sound British, only one actually is. The Crown hauling a seven top drama categories, not too shabby. Speaking of drama, Prince Charles, you have a great wife in two castles.

Stop pouting every episode. You already built the Xanidu like you wanted. Just move on to get on with your life. Come on. And the Crown was Netflix's first ever outstanding series award, which is the biggest award at the Emmys and a huge milestone for Netflix. Okay. Netflix having a great time. HBO, which is now owned by Discovery Warner Brothers, they won 19

Emmys. They weren't celebrating as much, though. Well, it didn't feel like a big night for HBO because the guy who did Game of Throat, Sopranos, The Wire, True Detective, he's not at HBO anymore. No, where is he? Now he's at Apple TV Plus. The old LinkedIn update. Speaking of Apple, we should talk about Ted Lassah. The American football coach turned to European football. football coach won a lot of Emmys last night. Okay, by the way, first of all, another British-based show. Like, what, there's like a circuit of actors who do, what, Game of Thrones and then they do all these streaming movies?

Britain won the Emmys. And Ted Lasso is Apple TV's first huge hit. Yeah, this is Liam Neeson's world. We're just streaming in it. Ted Lasso won Best Comedy, Best Actor, Best Supporting Actor, Best Supporting Actress. So this goes on. This is like a whole iPhone lineup of wins for Apple. And the BlackBerry of that analogy, Nick, is Legacy TV.

networks, which won like barely any, if not zero Emmys last night. Keyword legacy. Right. Amazon Prime Video, they didn't win any awards last night either. Hey, Alexa, write better screenplays. And Disney, which is spending all this money on streaming, the Mandalorian and Wanda Vision, the only won awards related to like most money splurged on CGI. Yeah, clearly do less. Disney, do less. So Jack, what's the takeaway for our buddies in the entire entertainment industry? The Emmy Awards follow the money. And the money today is with the streamers. Snackers, CBS, NBC, Fox, they stuck with cable TV while the view in public was cutting the court the last few years.

And that hurt their future profits and it hurt their stock prices. On the other hand, Netflix, Apple TV Plus, Amazon, they got these soaring stock prices and profits that are funded huge production budgets like recreating Buckingham Palace. And the huge budgets, Nick just referred to, that is what attracts the best screen. Reariders, directors, and actors who go and win these Emmy Awards. Now, the legacy TV networks, they have like finally launched streamers. Yeah, Paramount. Plus, you probably have a 30-day trial for Peacock somewhere. Yeah, you do.

But they don't have the money or the awards prestige of the OG streamers. Emmys follow the money, and the money is with the tech streamers. For our third and final story, Peloton has struggled all year. So they're making a pivot, a really interesting one. Peloton is focusing less on people and more on hotels, but to get to people. Snackers, true story. One year ago, Jack and I noticed something on the Peloton website. And we kind of kept it like a hush, hush secret.

I mean, Jack, maybe we should have done a story on it. But like, now's that time. Yeah, it was called Hotel Finder. It was a tab on the Pelton website. And we waited a year to tell you about it, Snackers. Yeah. And if you click on this part of their website, the hotel finder, it'll say in big letters, find a.

peloton bike at hotels worldwide. All right. So you type in a zip code for downtown Austin and they're like, boom, there are two pelotons at the Fairmont and one at the Kempton. Yeah, you're going to walk a little bit further down 6th Street and you're going to show up at the W Hotel instead, potentially. And Jack, what is the Peloton Hotel Finder say about the W Hotel in Austin? Cody Rigsby equipped. They got three bikes. They got three pound dumbbells. They got dual-sided pedals, but you got to bring your own cleats to use this. Are they called cleats? Is that what you call these things? They're called $200 shoes. Actually, Jack, the first time and the only time I've used a Peloton treadmill was at a hotel in Santa Monica because they had it. This thing looked like

it was designed by SpaceX. It was amazing. The first time and only time I've watched Dancing with the Stars is tonight to watch Cody Rigsby, the Pelton instructor who's on the show. There you go. Life comes full circle. By the way, Jack, I have a Peloton account. I don't know who is paying for this, but I use it at every hotel I go to and I don't know who's paying for you. Here's the news. Peloton is going all in on selling their bikes to hotels, to the hospitality industry. Specifically, Peloton launched a website for hotels to buy Peloton bikes and Peloton treadmills, not for you, not consumers, but just for the hotels. Right. Peloton noticed their sales of bikes have slowed. They had to cut the price of their bikes by 20% and the stock has plummeted ever since I bought the stock.

Yeah. This is Nick and I'm suffering along with Jack. So Peloton is going after a new type of customer, not a human being, a hotel. They pulled off a pivot. Jack, who needs new bikes right now? The gym at Hilton. Jack, who needs to excite people to come back? Marriott Hotels does.

And Jack, who has the budget for a fleet of nine bikes, not one lousy one that's just in your living room? The Arlo Hotel in New York City. Snackers, Peloton is selling to hotels, but we don't think they're really just selling to hotels. So, Jack, what's the takeaway for our buddies over Peloton? The power of the free sample transcends all. Short-term Peloton is going to make money selling to these hotels. They just will.

But long-term, we think the real value in selling bikes to hotels is ultimately to get that OG customer. You and me. Yeah, here's what we're thinking. Hotel Pelotons, they're basically. free samples. They're just like walking into aisle 6 at Costco. Oh, little pineapple chicken. Don't mind if I do. Sure. Amazing. Well, Hotel Pelotons are the ultimate free sample. You get a free 60-minute guns and buns ride. Lovely. And you're already in a vacation state of mind. So you're feeling great about it. Exactly. And then Jack, you go back home from the trip.

You miss the pool. You miss the Dacri lunches and you miss that thrilling Peloton ride. Before you know it, you go to Peloton.com. You're not clicking the hotel tab. No. You're clicking the buy one for my home Peloton, they are pivoting to focus on hotels instead of customers. But we think you're still the target customer. Jack, can you whip up the takeaways for us for T-Boy Tuesday? Great day. Evergrand could be the start of a real estate crisis in China. And it's not the splash we're worried about.

It's the ripples. Netflix and Apple TV Plus were the big winners at Sunday night's Emmy Awards. Emmys follow the money and tech streamers have all of it. Third and final story, Peloton is using hotels for sales, but also to generate leads with hotel guests. Because a Hotel Peloton, that is the ultimate free sample. Costco, Isle 6. Now, time for our snack fact of the day.

This one sent in by snacker Felicity Powell from lovely Auckland, New Zealand. Kiaoro from Altau, New Zealand. Here's an extra snacky snack fact. The New Zealand government decides which members' bills will be debated in Parliament by picking random numbers out of a 30-year-old biscuit tin. That's kind of like a metal cookie jar. Some of our most progressive laws like marriage equality introduced in 2013 were picked out of this tin, which is known as the biscuit tin of democracy.

Carraway. A tin biscuit is way more fun sounding than a filibuster. Behind every representative government is a cookie of some kind, right? Jack, that is a thing. That's Pollyside 201. Polysyt 201. We have Plymouth Rock. Can't eat it.

Snackers, remember, we want to hear your code names, your Amazon code names. What would have been the code name for Whole Foods? Valid's Operation Asparagus Water. It is Operation $9 asparagus water. Tweet us at Robin Hood Snacks, if you know. And before we go, happy birthday to Christina Zaller in lovely Minneapolis, Minnesota. And Taylor Boodensick in Berkeley, California. And Barry Dalmoshi in Pleasanton, California.

Happy 30th to Ellie Hey. We're celebrating with some Constellation Brands buddies over in Chicago, which apparently does logistics. Yeah, and happy hours? and happy hours. Yeah. Anybody celebrating something else today? Make it a T-Bowl. Celebrate the wins.

This is Jack. I own stock of Amazon and Netflix and Peloton. Nick own stock of Apple and Peloton. Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors who are associated persons of Robin Hood Financial LLC and do not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates. They are meant for informational purposes only and are not a recommendation to buy or sell any security, cryptocurrency, or investment strategy in any account.

This is not an offer or sale of a security, not a research report, and is not intended to serve on the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robin Hood Markets, Inc., Robin Hood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk, including loss of principal and past performance, does not guarantee future results. Robin Hood Financial LLC, Member Finra, SIPC. Oh, little pineapple chicken.

Don't mind if I do.