The Best One Yet - “Kodak’s FOMO-ment” — TikTok’s latest Zucking. Lysol’s consulting gig. Kodak’s stock triples.

Episode Date: July 29, 2020

Kodak went bankrupt in 2012, but now it’s pulling off an epic pivot from photographer to pharmacist. TikTok is going through a Level 6 Zucking courtesy of Instagram’s new Reels feature. And Lysol wants to become the Bain of Clean. Full disclosure: FOMO-creator Patrick McGinnis invented the term FOMO-ment.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 Wednesday, July 29th. Stocks dipped slightly yesterday. Nick, why did stocks dip slightly yesterday? They just did, Jack. They just did. She's asking so many questions over here. We decided, though, to make this our best snacks daily ever, T-B-O-Y. For our first story, Kodak did cameras for 130 years. Now it's pivoted to do ingredients for generic drugs. So Kodak stock actually tripled yesterday because it's mutating from photography. to pharmacist. For our second story, we've seen a level one, two, three, and a level five, zucking when Facebook copies another company's core feature or core business and then does it better than them. And what just happened at TikTok is a straight up level six zucking. We're looking at Facebook's

copy, acquire, and kill playbook. You're going to have to seek shelter. Jack, third and final story. Lysol is traditionally used to rub various surfaces inside your home. It's tired of that. It doesn't be associated with rubbing all the time. So it's consulting companies to disinfect and sanitize their entire business. Behold, the Bain Consulting of Clean. A lot of decks coming. A lot of decks. A lot of presentations. But first, Snackers, we want to do some storytelling. And this episode is called investing F-ups by Nick and Jack. Yeah, making mistakes can be a good thing because you probably won't make the mistakes later, ideally. Investing-wise, we made a whole bunch of mistakes that we're actually thankful for because we look at them like scars and they look kind of cool and we're glad that we have

them. People kind of like looking your scars and they bring good stories. Case in point, Jack, Spirit Airlines? Can you disclose that, please? Yeah. I invested in Spirit Airlines back in 2014. I'm embarrassed. It's the most cheap, like stingy investment I've ever made. What drew you to them? Was it the impeccably mediocre refreshment carts? What was it exactly? Dude, I wish I could forget this. Nick, on the other hand, you invested in Cisco, which is one of the most boring stocks I'm familiar. I think our friend Maeve's dad told me about it. And it felt like the vaguely professional thing to do back in 2010. Nick probably put this on the top of his resume. I'm a Cisco shareholder. Back then it was like SAT and then some company you don't know what they do that you may have bought

stocking. Now Snackers, Nick and I made these investments early. We lost money. We got burned bad, but we've never forgotten those losses that we had. No, we haven't. But here's the thing, Snackers. We only lost like 100 bucks because our investment. were really small at the time. The beauty of making investing mistakes early is that there's small mistakes that aren't going to hopefully kill you. It's like you fall when you're a baby, but you're only six inches off the floor, so as soon as you look back up, mom's happy and loves you. Nick, you've seen those kids on like the bunny trails skiing? They fall, but they fall like six inches. They're going to be fine. They're adorable because they're basically balls themselves.

Now, we want to give a shout to Robin Hood, which is helping you make small mistakes. And that's thanks to a specific feature in particular called fractional shares. Thanks to fractional shares, you are no longer limited to investing in 1.0 entire shares of a stock, because Nick, a stock could be like $1,000 or $2,000. 1.0 because decibels and fractions kind of the same thing. You can purchase a fraction of a share instead, starting at just $1 worth. So if you want to try out investing in a company, you can start with as little as $1 and make a tiny mistake, or maybe it turns out to be, you know, something good.

Yeah, the mini takeaway here, a slice of pizza still gives you a taste of said pizza. For Snacks podcast listeners, we're giving you a free stock if you set up a Robin Hood account. Your first free stock is on us. Jack and I are talking one stock selected from a pool of stocks for free for you. Snackers, sign up at Snackspodcast.robinood.com and your account will be waiting with a free stock for you to claim. That's Snackspodcast.com to get your free stock. This is Nick and Jack, and we don't own stock of Spirit Airlines or Cisco. Let's hit our three stories.

You're tuned in to snacks daily. We spoke to the lawyers. The snacks about to hear ain't food is air candy. They don't reflect the views of the Robin Hood 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.

Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Kodak stock is still around and still kicking? Nick, I got a pulse. This thing's alive. Shares tripled yesterday because Kodak's pivoting from becoming a camera company to a pharmaceutical company. Nick, the Erie Canal, legend. World Cup champion Abby Wamba. Fantastic. Kodak.

Uh-huh. They're all born in Rochester, New York, aka the Chicago of upstate New York. The Chicago of upstate New York. If you know, you know. Now, the camera company, Kodak, made your 1990s family vacation really stressful. You're changing the film on this thing. Your dad had. to go into a closet and like turn all the lights off in the whole hotel. Did anyone pack a second set of batteries? Nick, I told you to pack a second set of batteries. Now apparently Kodak is still alive, even though they invented the camera back in 1888 and had a hundred good years, keyword, 100. But then Kodak kind of missed the digital trend and then smartphones just killed it. I mean, this is wild. Jack and I discovered this. Apparently in 1975, Kodak actually invented a digital

camera, but then didn't produce it because they were worried it would affect their film sales. The lesson here, cannibalize yourself or someone else will kill you. Cannibalize early, cannibalize often. Now, Kodak went bankrupt in 2012 because of smartphones and digital cameras, but they emerged in 2013 with less debt and with a publicly traded stock that has been thriving ever since. This is a classic case study. They're probably thrown out at Salino and Barnes. Bankruptcy is not the end. It's a new beginning. And get this, Nick. Yesterday, the stock rose 200% on a shocking injection of life. Snackers, Kodak just got $765 million from the U.S. government to make us drug independent.

90% of the pills that we pop in this country are generic drugs. And a majority of our generic drugs are produced in China or India. Perfect timing because the Defense Production Act just asked Americans to speed up domestic production of strategic resources. By the way, Jack, life goal, become person familiar with the matter and also control a lot of strategic resources. Well, it turns out drugs are kind of a strategic resource that's kind of important to this country. Yeah, and Kodak's factories are like doing nothing right now. They're on LinkedIn begging for you to endorse them for something. That's right. Kodak has

factories in Rochester, New York that can easily be retrofitted to produce the ingredients required for top generic drugs. The stuff that's like going into your ad, though, like a smoothie. The stuff that crumbles into a white powder when you like destroy a pill. Now, this isn't free money. is a loan and Kodak's got 25 years to pay this thing off. Good that it's got 25 years because it's thinking long term with this injection of cash and what it's going to do with it. Jack and I thought this was fascinating. This is not like a one-off thing of them producing some drugs right now. Kodak wants 40% of its business to be pharmaceuticals within the next few years. Which is ironic because in its last earnings report, Kodak didn't include the word pharmaceuticals,

drug, or generic anywhere in the earnings report. Jack and I jumped in snack style and did the old Apple F, which is about half of our day just Apple Fing things. Now, one element of this whole story is kind of sad. It's a reflection that we don't trust China and India to reliably produce our drugs anymore like we have for decades. But Jack and I think it's kind of cool that 300 jobs are coming back to lovely Rochester, New York, pretty soon. Oh, and Snackers, for perspective, Kodak, despite this stock jump, is still only worth

one-thirtieth of a lift. It's a tiny little company. So, Jack, what's the takeaway for our buddies over at Kodak? successfully pivot, companies have to zoom out and redefine who they are. Snackers, Kodak's not specifically a camera company. It's a chemical company. And now it's betting on its revival that it can use chemicals for medicines, not for like film and cameras like it has forever. Another great example, BlackBerry. It realized it's not specifically a phone company. It's a secure software company. Now it's developing that secure software into self-driving car technology, not smartphones, those

click clacky things we used to use in the 90s. And an anti-example here of a company that completely messed this up, Blockbuster, always thought of itself specifically as a physical VHS DVD rental company. It never zoomed out to realize it's like a movie or an entertainment company instead, and therefore it never got its mojo back. For our second story, Mark Zuckerberg is reportedly taking Zucking to an entirely new level. We're not making this up. No. Facebook is paying TikTok stars to leave TikTok and come to Instagram's TikTok knockoff instead. We'd seen categories 1, 2, 3, 4, and 5. This is straight up 6, shelter from the storm style.

Facebook is pulling out all the Zucks to stop TikTok from growing. And honestly, Jack and I could almost see why, because every time we start a biz-dev meeting for snacks, it begins with, that's cute Jack, Nick, but what are you doing on TikTok? Nick and I have like a holder slide in our deck for our TikTok strategy. We've never filled it in. We kind of want to keep it a mystery,

so it just says TBD and then we put a big jiff. It just keeps everyone entertained. That's because over one billion people globally have downloaded the TikTok app as an alternative to Instagram and Snapchat and an alternative to real-life interactions with you. That's pretty true. That's true. Now, the wild statistic Jack and I found here is that 70% of 10-year-old girls with smartphones in the U.S. used TikTok last year. 70%. Also, what 10-year-old girls have smartphones? And what are the other 30% doing with their lives. Now, we already knew that Facebook was planning to suck TikTok. That's because they've already announced a TikTok copycat called Reels coming to Instagram in the U.S. next month. But zucking the product wasn't enough for Mark Zuckerberg. Now he's zucking TikTok's content. Which brings us to the

wild headline, according to PFWTM interviewed by the WSJ, Instagram is making financial offers to TikTok stars. Nick, I am so impressed by your abbreviations. Let me. Let him. sometimes they're better than words. Now this looks like a bribe situation. We're imagining like Cheryl Sandberg and like a black hooded sweatshirt crawling out of a bush with a big envelope of cash. She's got sunglasses.

She hands at the envelope and says, just read the note. Here's what she's saying, according to the article by the Wall Street Journal. I'll give you hundreds of thousands of dollars of cash. Not bad. If you stop posting your videos on TikTok and use Instagram reels instead.

Or if you don't want to be exclusive with Instagram, maybe you just post with Instagram first and then we'll give you just a little less. post with us first. We'll still give you money for that. We just want you to post to TikTok after us. And then Cheryl walks backwards and leaves and backwards slowly. Now this isn't a bribe because there's no corrupt government politicians involved. No. But this is just a business transaction. Yeah, technically it's not illegal and we've seen this come up in other places like Spotify signing Joe Rogan to an exclusive podcast deal. Or Netflix did this by signing TV show creator Shonda Rhymes to only do shows

on Netflix. The only difference between what Facebook's doing and what the other two we just mentioned are doing is that Spotify and Netflix actually did a press release. Right. Spotify and Netflix didn't have to get caught by some PFWTMs who are talking to the Wall Street Journal. They're out front and honest about what they're doing here. By the way, Snackers, TikTok is not like some David Zucked by Goliath situation. You don't have to have too much sympathy. Right. TikTok is owned by a Chinese tech giant and they themselves just launched a $200 million pot of cash to keep its own creators from ditching to go to Instagram. So it kind of feels like the real winners in this entire situation are the creators on TikTok who are getting paid by one company or another. Which full

disclosure is not Nick and me. No, it is not. We've got to update that slide jack. So what's the takeaway for our buddies over a TikTok? We call it zucking. A congresswoman calls it copy, acquire, kill. Snackers, today, big tech is getting treated like big tobacco 20 years ago. Congress called up the CEOs of Amazon, Facebook, Apple, and Google to get grilled by a bunch of hungry politicians on Capitol Hill. And they're going to be speaking with Representative Pramila Jai Paul who will argue they protect their dominance with anti-competitive strategies that she calls copy, acquire, kill.

Think about it. Zuck already copied TikTok. Now it's acquiring TikTok's top creators. So the big question, will this kill TikTok? Maybe. But many in Congress don't like big tech squashing of competition with their incredible size and their incredible money. For our third and final story, Lysol is launching a brand new business line. It's leveraging its impeccably sanitized brand to become the hygiene consultant of the economy.

Squeaky clean. We're talking a company owned by another company called Reket Benkeiser, which is absurdly similar to Unilever. Okay, both Reket Bankhizer and Unilever are Anglo-Dutch. Yes, real thing. Which means they have like dual headquarters in the United Kingdom and in Holland. make a whole bunch stuff that is just hiding in your closet. Go to your kitchen sink, open up the cabinets, it's full of their product. Now, Reckett Ben Kaiser has the unfortunate situation of sounding kind of like an evil villain, but it also owns Lysol, whose sales searched 70% in North America last quarter. Lysol is having a moment in the coronavirus,

and the CEO just said, if you've done something for 60 days, it becomes, and I quote, embedded in your life. Powerful quote, also feels kind of like the plot in every single Malcolm Gladwell book. That's true. 10,000 hours, you've become an expert. 60 days, you become a germaphobe who's constantly purelling their hands for the rest of their lives. So the folks over at Lysol got together, looked at the numbers, and decided to throw them all up on a PowerPoint, and then said this. Let's become the Deloitte of Hygiene. They're like, we know sanitization. Carl, you're promoted. Nobody knows sanitization more than Lysol, so they're like, let's help corporate customers sanitize themselves. Boom, case study situation. Jack, we got a hotel

luggage rack. What are we going to do with it, Lysol? Three sprays, two wipes. Lysol, we got a plain bathroom. How are we going to handle this thing? Two wipes, three sprays. No more, no less. So Lysol noticed a change, which was an opportunity for them. Hospitality and travel marketing is only focused on cleanliness these days. Right now, that's what's happening. There's no advertising for like a spa treatment at a hotel or like their three-eight kind of brown. Hilton Delta Avis. They've signed up to become Lysol's first partners because they want to become Lysol approved and show customers that they're clean. Lysol's consulting business already has legs. We checked out Hilton.com, which like right up front on their website has this big clean stay initiative. Classy. If you look at their clean stay page, Nick, I Apple F this thing. They mentioned Lysol 13 times. Apple Fing is like the most fundamental technical analysis you can do. Now Hilton is publicizing that Lysol's cleaning. program is now across 6,000 of its hotels. Now, what customers don't want to hear in the Corona economy is we cleaned your bathroom three times today. But what they do want to hear is

your room was cleaned with Lysol products with Lysol standards once a day. We only did it once because we know you don't want us coming into your hotel room off. But we did it the Lysol way. So Jack, what's the takeaway for our buddies over at Lysol? This is the value of a company's brand equity. Snackers, Lysol probably isn't any more clean than like your generic sanitizer killing 99.999% of germs. In fact, Nick, I would wager that Clorox bleach is probably even a little cleaner than Lysol. It's that X. It just, it feels cleaner with the X check. Now, since effectiveness of these cleaning products is so similar, Lysol is capitalizing on the

value of its brand, which so many people know and trust. Companies will pay Lysol for what its brand communicates to all its customers. And the Rekit Bank Inser CEO thinks Lysol is the stamp of approval. customers are looking for it right now. Snackers, that is the power of brand equity. Brand equity attracts customers and will result in more sales. Jack, can you whip up the takeaways for us over there? Kodak is living its second life, this time as a pharmaceutical supplier. Some jobs that we outsourced other countries are now coming back to this country. Second story, Facebook is annoyed that TikTok is growing so darn fast. So Facebook's pulling the old Kack strategy. Copy, acquire, kill. That's what Facebook

does. For a third and final story. Lysol kills 99.999% of germs, which is importantly, one more nine than the generic off-the-shelf sanitizers. But customers know Lysol equals clean and corporate clients will pay for that. Now, time for our snack fact of the day. This one tweeted in by Alejandra Monroy in lovely Georgia, Georgia. Just Georgia. Just right of Georgia. But she noticed we had a little snack fact the other week about how South Carolina actually produces more peaches.

than the peach state of Georgia. Alejandro wasn't happy because Georgia may not be number one in peach quantity grown technically. True. But Atlanta is definitely the city with the most peach trees, both figuratively and literally. Turns out Atlanta has 71 streets with a variant of the word peach tree in their name. This is like George Foreman naming all six of his son's joint. This is the most charming thing. Any male person has ever come across.

Actually, this is probably really aggravating for the U.S. bustle. It actually gets really annoying for them. Now, before we head out, happy birthday to Jessica from Philadelphia, Pennsylvania. Pats are Ginos, and happy birthday to Emrita in sunny Seattle, Washington. Now, Snackers, before we go, we're not going to ask you H, H, Y, H, Y, Y, SD today. We're going to ask you to do that to Spotify and Apple. If you're listening on Spotify, click to follow Snacks daily.

If you're listening on Apple, we'd love if you could jump in and give us a five-star and make sure you're subscribed there, too. Just scroll a little bit further down. Snackers, we can't wait to see tomorrow. We'll see you then. This is Nick, and I own shares of Apple and Jack owned shares of Amazon and Spotify. 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

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