The Best One Yet - “Juul’s Darth Vader moment” — Amazon surges 10%. The Bouqs raises $30M for wedding flowers. Altria devalues Juul e-cigarettes (again).

Episode Date: January 31, 2020

Juul was supposed to save the world from smoking, but it made a critical decision that its new owner, Altria, is now paying for. The Bouqs direct-to-consumer flower startup raised $30M because it wants to get invited to your wedding (but seriously).Learn 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 Friday, January 31st. Last day of the month, first day for you and me back in California. And this is the best one yet. Jack, three wonderful stories. I can't believe we're running the week like this.

It's beautiful. What do we got? Our first story is Altria. This is a big tobacco company. They acquired Jewel, the vaping phenom. And that was one of the worst things they ever did. Yeah, a lot of regrets were feeling. A lot of regret vibes.

We're going to go back to that moment when Jewel had an Anakin Skywalker or Darth Vader. situation and they went with the Darth Vader. Yeah, they kind of sliced an arm off. I think we've all been there, Jack. We've all been there. Our second story is about books. This is a direct-to-consumer online flower delivery company. They snagged $30 million in fresh funding because they want to be invited to your wedding. But they don't want to get sat at the impulse buyers table. No one wants to get sat with those people. Our third and final story, Amazon just went Amazon on its earnings reports. Is it just me or is Bezos looked like he's been working out? He looks great. He is the hottest billionaire I've ever seen.

Fewer push-ups, Jeff, a little bit more focus on the earnings. Now, Amazon already has a giant stock, and it just jumped another 10% after the earnings report. Jack, I think this is a healthy moment for a disclosure. This is Jack. I own stock of Amazon. Now, Snackers, before we jump into all that beautiful stuff, Snagxit is complete. Snacks have exited the UK.

Fun fact, there is a direct flight from London, which is in Europe to San Francisco. it's 12 hours long. I'm pretty sure we went over the North Pole like twice to get back here. The crazy thing is when you land in California, it's only three hours later on the clock, but you're like completely exhausted. Now, maybe this is because Jack and I are a little jet lagged, but we thought we may have found the best one yet when it comes to snack facts of the day to the point where we promoted it to the intro of the pod.

Scott's from Scottsdale was the first guy to send a snack fact via video on Twitter. It was great. I remember what? Mo Hassan from Miami, Florida, and Justin Shelton Mosley from Sacramento, California, are the second, and it is so good we had to put it in the intro. They're right now in the Nashville, Tennessee. Two words, gentlemen, anchor down. Nick, this is Super Bowl themed, and this Sunday fans will consume an estimated 1.3 billion chicken wings, which comes second only to Thanksgiving in most food consumed in America. We would have expected nothing less from the two Vanderbilt football players, whether that Miss Kelly's or the Hockey Towers. section of town. Now, 1.3 billion chicken wings is apropos because tonight is the last day of January,

but we're celebrating Nick's birthday a little bit belated at a Korean barbecue place. We do barbecue every year for my birthday. We went a little bit more Pacific and went Korean barbecue this time. It's also the perfect moment to break Jack's V. January. Snackers, I've told you every day this month, it's my Vig January. And although it's still January 31st, I'm still on UK time. So by the time dinner rolls around, it's time for some pork or something. I bought some plight. I bought some pl, plant-based spoons, and I'm going to be feeding Jack's face with bimibok, pork belly, and a bunch of short ribs. If anyone wants to watch it, I'm at Nick of New York and Jack's T-boy Jack on Twitter. Let's get to our three stories. Let's do it.

You're tuned in the snacks daily. We spoke to the lawyers of them. 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. 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, Altria, the big tobacco company, just saw its worst year get even worse.

The story, though, starts with another company called Jewel. This is the pioneer of those little Apple product-looking devices that you convey from. They're kind of adorable. They had the same impact as like Skechers' weight loss shoes did. They think they could, like, change everything. but they actually did catch on on like Skechers. Yes. Well, I think what you're saying about the Skechers is

Skechers were supposed to make you healthier, right? Yes, exactly. The vaping devices were supposed to be healthier. But here's the thing. Teenagers, young adults, former smokers, this was a revolutionary lifestyle product. Now, this caused a major threat to Altria, the maker of Marlborough,

who was losing like 5% of its sales every year to these guys. Yeah, that's just because, you know, cigarettes are kind of out right now. But as e-cigarettes started taking over, that accelerated the decline of cigarettes and was a major threat for big tobacco. In the mid-2010s, you started seeing people walk down the street. Instead of cigarettes, they had like puffs of smoke like dragons popping out of them.

It was a new thing. So, let's go back to Altria. To neutralize the threat presented by Jewel, Altria acquired 35% of Jewel back in November of 2018. And it kind of had to splurge for that. You know, they spent a cool $12 billion to get that part of Jewel. And they only got 35% of Jewel. That means Jewel was worth $30. $38 billion. It was only like two years old. This was a toddler of a company. Instead of popping champagne-flavored e-cigarettes, they ended up having a nightmare situation after that investment. Last year, Altria wrote down its jewel stake by $4.5 billion. Yesterday, they downgraded their stake by another $4.1 billion. So that Altria, 35% investment that we mentioned to you, it's no longer worth $12 billion. Jack, can you add the three, carry the nine and tell us what it's worth?

now. Okay. 12 minus four and a half minus 4.1. Now Altria's stake in Joule is only worth $3.4 billion. We haven't seen that many investments, but this is probably the worst one we've seen of this kind. Oh, by the way, in this meantime, like over the past year, Congress passed a law raising the legal age to buy cigarettes to 21. I like barely even notice that that happened. If you are Altria, you are going to therapy and saying, is it me? Like, What did I do? Am I doing something wrong here? So, Jack, what's the takeaway for our buddies over at Jewel?

At the beginning, Jewel faced an Anakin Skywalker moment and became Darth Vader. Jewel could have made the world better, but it chose the dark side by marketing to teenagers instead of the light side. There are two great episodes of The New York Times Daily that explain the story of Jewel and how it's impacted people in this country who use the products. Snackers, this is what Jewel could have done. It had a product to help smoke. switch to potentially less harmful nicotine, aka the Jedi Path.

There are millions of people addicted to cigarettes, and that's like a big problem. But if Jewel could have, like, got them on the off ramp away from cigarettes, towards something that's also nicotine, but slightly healthier, that would have been really, really good. Slight nudge. But before its Altry investment, it still had ads showing like Abercrombie models partying with vapes. Right.

Instead of following that Jedi path, Nick described, they started marketing their product and like clearly advertising to appeal to kids. They had flavors like mango and cream that looked like they were straight to have a jamba juice menu. And naturally, they got non-smokers becoming vapors, and those were some of the key customers of Jule. The result for Juel and for Altria was a domino effect that began with the team vape academic. That led to dangerous knockoffs being created.

That led to people dying. That led to a flavored e-cigarette ban. That led to long. lawsuits. And that is why Altria has lost $8.6 billion in its dual investment. For our second story, Jack, annual or perennial? Perennial. That's always the answer. You always go with perennial. The Bookes, the flower delivery startup, just stack $30 million in fresh funding. And this is the biggest venture-funded check a delivery flower startup has ever received. Jack, you feel like a fig tree guy to me, like a succulent fig tree kind of like. No, no, no, no.

My wife, Alex, told me early in the game she liked tulips. So that's been my favorite flower ever since. I'm not asking about your wife. I'm asking about you. I mean, I'm like a peony iris, Jasmine County. Renanches, I go crazy for him. I like a seven-foot Vermont-bred spruce tree, Christmas tree style. Now, this company is called The Bookes, but it's short for Bouquet.

Right. Bouquet is like the Charles, and the Bookes is when you call your buddy Charles, Chaz. Yeah. It's kind of what they're going for here. Little be cool. And they're coming up on a really critical quarter because, you know, Valentine's Day, it's literally their most important quarter.

Now, if you need to buy some flowers, there are some really nicely millennial branded competitors out there besides the books, like Farm Girl Flowers, Urban Stems. These are privately held companies. You can't invest in the stock, but you can buy the flowers and put them on Instagram. And they're all fighting against the rival, the big publicly traded company with the greatest name ever. 1-800flowers.com. It's only a matter of months before they throw.

a hashtag on there and get the IP lawyers on this thing. Now, the Bookes is trying to take down 1-800flowers.com, and they're leaning into their marketing buzz because they want you to feel special when you buy their flowers. Jack and I saw this and you feel kind of special because I love volcanoes. On the other hand, it seems like a big carbon footprint. They claim all their flowers come from a sustainable volcano in Ecuador. Okay. Yep.

Yeah. Here, I got you these flowers. I love you so much. I got them from Ecuador. Yeah. Don't touch them. They're really hot. Now, Warby Parker is the original direct-to-consumer brand.

They make those eyeglasses. They cut out the middleman. They shipped them right to you. Let you try them on and send back the frames you don't want. True. And this concept of direct-to-consumer, it has officially carried over into pretty much every industry, anything you can buy.

So the Bookes is cutting out these several middlemen that actually exist in the Flowers industry. They're selling online, and they're giving you a wonderful experience. Just like the Casper mattress, Nick. You have that awesome unboxing. Now, that's what they want you to have. In our experience, though, when you get the books, you need like a chainsaw to cut through

to actually open and get the flowers are. And the flowers are like, they just want to get out of there. They're like, let us out of here. We were on a volcano for 12 months. They're also thirsty as hell. Yeah. It's been two days on an airplane. Now, the books is trying to upsell you to make it more profitable by getting you to

commit to a flower subscription so you get fresh flowers every month. or right before you push the like confirm order button, they're going to try to throw in like some chocolates to make that gift extra special. Hey Jack, can we put some caramel to go with the daisies? The pansies. Most interesting feature though, and this is what Jack and I found fascinating, is what they're going into next. I just got married this past summer and I'm telling you, flowers are expensive.

And you've got to coordinate with a couple different people. You've got to smell them. You've got to try them out. and they're really expensive. Did I mention they're expensive? That's right. They're focusing on the wedding business. And when it comes to spending on weddings, 8% of the average budget is splurged on flowers, and that's $2,061. And the Bookes figures they can offer a better flour for lower price by cutting out the middleman. Oh, by the way, fun early snack fact, 60% of weddings have a flower girl. That's kind of charm. Delightful. So, Jack, what's the takeaway for our buddies over at The Boots? Here's the thing about flowers. They tend to be

impulse buys. And impulse buys, they have to be offered locally. So when people buy flowers, I'm sorry, flowers, cheer up flowers, spontaneous flowers, I forgot your birthday flowers, they're doing it because they need it in four hours. Yet most, like, especially men, I feel, when men need to buy them today. And you can't wait until them, you know, to be shipped in two days. That's not going to work. Right. Overnight shipping from the books doesn't fit that need. So I feel the only opportunity the books has is that subscription flowers business because you can get it in a month and that's fine or these big ticket items like weddings which you've been planning for months. There's a reason why every small town

has multiple floral stores because you need the flowers right now. For our third and final story, Amazon stock just jumped 10% and it became a trillion dollar with a tea company. Yes. So remember, a unicorn is a billion dollars. A trillion dollar company is a platinum platypus, which is one 1,000 unicorns. Rare, rare breed of animal. By the way, Snackers, if you ever want to check out Amazon's earning support, like Jack and I was enjoying on the flight, it is like a long resume with absurdly large numbers.

Amazon checked out one of those websites that says action verbs for your resume. There's a whole bunch of managed this, supported that, led this, coordinated that, with gigantic numbers after each verb. We get it, Amazon. You're proficient in Excel and French. Amazon announced a couple really nice. in this earnings report that were just pretty cool. Okay, so holiday sales snackers in the United States rose 4.1% overall across the country. But for Amazon, they rose by 15%. It's a sign that Amazon

is just eating up more and more of American shopping every year. And the result was profits that were way larger than expected, $3.3 billion just in the fourth quarter. Now, that was like the regular stuff that you might hear about Amazon. What Jack and I found the most fascinating, though, was the 150 million prime members. That was a total surprise. We didn't expect an update on the number of prime members. In fact, they very rarely tell us how many prime members there are. Snackers, if you were to put that 150 million in their own country, they would be the ninth most populous country on earth. Jack, where does that stand in the top? It's in front of Bangladesh and behind Russia. I trust you on that. You just said it with confidence. Now, Facebook is a way bigger user base than

150 million. They have like 2.8 billion actually. But remember, Facebook is free. It's harder when you have to get people to pay. Yes, Prime means you're spending $119 of a commitment every year just to buy everything from Amazon. Prime is basically a modern day country club, but for shopaholics, with a $19 million a year due. Aside from the country of 150 million prime members, the everything Jack and I just thought was cool was like the movie section. They had a whole bullet about movies. Well, they do have a movie coming out, produced by Al Pacino and Jordan Peel, and it's a movie about Nazi hunters based in New York. Let's just leave it at that. We kind of thought that was just cool.

So, Jack, what's the takeaway for our buddies over at Amazon and their 150 million country strong? This is the shocker. Amazon is not slowing down, like most huge companies. It's speeding up. Snackers, more people joined Prime last quarter than in any previous quarter. Again, you expect growth to flatten at a certain point, but this one is getting steeper higher up. Revenues for Amazon, they rose by 22% this holiday quarter. That's up from 18% in last year's holiday quarter.

They keep growing. We just talked yesterday about Facebook's growth, which is slowing down because it only added 240 million users last year. Oh, that is it. That is it. By the way, Google's growth also slowing down. Meanwhile, Amazon is bigger than Google. It's bigger than Facebook, and it's showing no science. of slowing down. Jack, can you whip up the takeaways for us before the weekend? Altria invested in

Jewel when it was still a young Skywalker. But then Jewel helps start a team vaping epidemic, so Altria's paying the price. Kind of tough. The Bookes sells bouquets of flowers direct online and wants to get into weddings. Because so many flower occasions can't be shipped in two days, you kind of need them now. Third and final story, Amazon just had a giant profit of $3.3 billion in three months. Its growth is speeding up, not slowing down, and someone's got to do like a piss test on Jeff Bezos right now. Now, time for our snack fact of the day. Snackers, we asked you for snack facts about the Super Bowl so you could be prepared going into the Super Bowl. And Josh Shorto delivered.

This is a good one to kick things off when like the nacho dip isn't ready. The game has started. Not fun, awkward talk. What are you doing? How are you? How's work? This is actually a classic. question. Andy Reed is one of seven head coaches to go to the Super Bowl with two different

teams because he went there with the Eagles back in 2003, I think. Great guy. Basically, the trivia question here is who are the other six? And I'm going to rattle off a couple here. Bill Parcells went with the Patriots and the Giants. Dan Reeves, who went with the Falcons and somebody else. He's on a roll. Jimmy Johnson. True. Nice alliteration. I'm out, Nick. That's all I got. You got any? I don't have any. So I was just taking it. notes again. I literally was taking notes in that. Snackers, run with that one, kick off your Super Bowl with it, and let everyone know about the wings situation, because that's probably something we should all be paying attention. 1.3 billion. That's about six wings per American, by the way. I got to get

some bimmy bop ready and start feeding Jack. We'll see you guys on Monday. See you that. 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.