The Best One Yet - 🇬🇧 “Less Hermione, more Ron” — Deliveroo’s stock drop. Apple’s record label move. Walgreens’ profit puppy.

Episode Date: April 1, 2021

So are vaccines a profit puppy? Walgreens’ stock just jumped 4% because vaccines are the first ever twin profit puppy. Apple just whipped out its checkbook to invest in a startup killing the record label. And London-based Deliveroo was supposed to be Europe’s big 2021 tech IPO... but then it plummeted 26% on Day #1 of trading.$WBA $WMG $SNE $AAPL $UBER $GRUB $DASH $ROOGot 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. And this is Jack. And this is Snacks Daily. It is Thursday, April 1st. Did you know tomorrow is a holiday? I did know tomorrow's holiday. Are you thinking when I'm thinking, Jack? This is literally Thursday's the new Friday.

It really is. Markets are close for Good Friday. Ipso facto, no pot tomorrow. We're off tomorrow. Yeah, and nice day to be off because stocks popped to a record high yesterday for the S&P 500. Must be nice. So today's pod, technically, it's actually the best one yet. For our first story, Deliveroo was supposed to show New York

that London could do tech IPOs too. Funny thing, then the stock fell 30% on day number one. A little bit too much Hermione Granger, a little nodded off Ron Weasley. We've got a muggle situation going on in London. Jack, second story, what do we got? Apple. Just whipped out the checkbook to invest in a startup called United Masters. New song on Apple Music, we noticed, kill the record label.

For our third and final story, Walgreens just jumped 4% because vaccines, they're not just a profit puppet. Jack, this is unprecedented. We got ourselves the first ever twin turbo profit puppy. Snackers, before we hit those three stories, we have a big announcement to make. We do. A new ticker symbol just entered the stock markets, T-B-O-I. As in the best one yet. This isn't just a ticker symbol.

It's a ticker symbol for a brand spank and new SPAC. Not just any SPAC, we're talking our SPAC, the Snacks SPAC. The first ever Pure Play publicly traded podcast company has arrived. Yeah, we didn't even need Richard Branson or Toma to pull this thing off. Oh, and the best part? The Snacks Spack is so hot. On Wall Street? How hot?

We're preemptively doing a 10-to-one stock split. Jack, what is the better part? Okay, the Snack Spack's co-hosts? Yeah. They're going to be classified as independent workers to keep cost down. And Jack, what's the bestest part? The Snacks Spack? Yeah.

It's actually an NFT. It's just an FD. So, Jack, are we zuck and zuck by spack and snacks? Snackers, happy April Fools. Happy National Burrito Day. Gwok is included. But happy April Fool's Day. Just kidding.

Gwok is always extra. What's in our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal 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.

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. Robahood Financial, LLC, member Fenra slash SIPC. For our first story, Jack, would you like the sauce on the side on this one?

Depends. Deliveroo, supposed to be Europe's big tech IPO that, like, everyone was excited about. Yeah, ticker symbol Roo, it's down 30% since trading began on Tuesday. Despite that ticker. Now, Snackers, if you haven't been eating in London lately, Deliveroo is the UK's homegrown delivery. Just like schedule. Brits do things a little different than the other delivery apps, though. This is wild.

The CEO and founder of... of Deliveroo. I like to get his hands dirty, we noticed. Yeah, he delivered meals himself, his entire first year of working at Deliveroo full time. Full time. And he still delivers meals regularly today as the CEO. Yohan, can you cancel my 215? I've got crumpets to drop off. Now, they call them riders at Deliveroo, which got us thinking. And we realize London, traffic is awful. Cars have to pay congestion fees to drive in London. And gas is like 12 bucks a gallon. Yeah, well, get this. 80% of Deliveroo gig workers, they are riders on bikes to deal with all that. And those riders are draped in Robbins Egg

Blue Deliveroo jackets plus an insulated backpack, plus a Robin Ed Blue bike. You're walking around London? That's not a Tar Heels fan. That's a Deliveroo delivery. That is a recognizable peddling billboard. Now, when it comes to the business itself, 50% of Deliveroo's business, they're doing food delivery in the UK and Ireland. The rest is in Europe and Asia. Oh, by the way, Amazon was an early investor in Deliveroo. They own 16% of the company. Now, this all leads up and brings us to yesterday where Deliveroo finally went public in London at a $10 billion with a B valuation. And then, poof. Yeah. 30% of that value disappeared. Three billion dollars of stock market value. Got. Stockium. Disappirium. Now, all tech IPOs that Nick and I have been covering,

they seem to be popping. So why did Deliveroo stock plummet on the first days of trading? Snackers, if you jump in Snack'd out, you're going to see a lot of opinion. unions out there. Like everyone's saying, okay, maybe it's because the pandemic's ending. So their pandemic pop is dropping. Or maybe the issue is delivery is not the market leader. Just eat takeaway is. Or maybe it's because like regulation like winter is coming. Yeah. Uber recently had to reclassify their drivers in the UK as workers, not independent contractors. But naturally, Jack and I think it's something a little bit different. So Jack, what's the takeaway for our buddies over at Delivero? This IPO was a blow to the London stock market. Snackers, the business model of Delivero is

It's the same as Uber, same as DoorDash, same as Grubhub, it's unprofitable. And yet, despite losing money on every lasagna delivery, Uber, DoorDash, and Grubhub, they're still enjoying record high stock prices in the U.S. Deliveroo is losing money on every single delivery, too. The only difference we see is that Deliveroo is listed on the London stock market, an ocean away from Uber, DoorDash, and Grubhubh, which are trading in New York City. And London was hoping that this IPO could prove that tech companies once and for all don't need to go to New York to IPO.

They can do it in London. But the investor reaction this week to this IPO? Yeah. It may have actually proven the opposite. Deliveroo spends money on growth first, then figures out profits later. That's been okay in the U.S., not as cool in the U.K. Deliveroo, it's got supervote shares giving the founder, you know, just extreme power. That's been fine for U.S. tech companies, but apparently not fine for this British one.

British markets, they're looking more like Hermione. Obsessed with the company's fundamentals. American markets are looking more like Ron Weasley. It's just buying what Harry told him to buy. For our second story, Walgreens has shot more than 8 million doses into Americans' arms. And this isn't just profitable. It's a special type of profitability these vaccines are. Jack, I mean, perfect first-date icebreaker question these days.

Are you Walgreens or UCS? Or in Vermont, are you local Tom's apothecary? This is the big, like, regional thing. I mean, Dwayne Reed, there's like three on every corner and there's a Dwayne read within each every Dwayne. For Walgreens, you might be surprised, but COVID-19 overall has hurt. Walgreens profits. Yeah, CEO admitted this. In the earnings yesterday,

people flocked to Walgreens for like the rubbing alcohol and the Purell. But then you bleach cleaned your entire house. The whole thing. Which led to, as the CEO says, an exceptionally weak cough, cold,

and flu season we just finished. Yeah, when you're like a stage five germophobia, you're wearing the mask, you're washing hands, or avoiding bacteria. That's not great for Walgreens. Yeah, because cough and flu medications dipped big last quarter,

leading sales on average to drop three and a half percent. But the stock price jumped yesterday, because this is going to start changing. And that's because the vaccine phase of this pandemic, that's the profit phase of the pandemic for Walgreens. Yes, they have administered 8 million vaccines to date. Not bad.

With 4 million shots in March alone. Jack, they're only going to whip up, you know, another 20 million more vaccines this summer. And this is great news for Walgreens, because the government is getting more generous when it comes to vaccines. Yeah, because the government was reimbursing vaccine sites. Get this, 25 bucks a shot. Oh, wait.

And there's more. Yes, they were doing $25 a shot, but they're upping that reimbursement rate to $40 per shot, starting right now. Retailers are going to end up doing like half of the shots for vaccines to all Americans, retailers, including Walgreens. So it looks like Joe Biden is trying to incentivize them with bigger financial payments so that companies like Walgreens vaccinate as many people as possible as quickly as possible. When it's not just Walgreens, you got Costco, Kroger, and Walmart 2 getting in on this. And every day, these companies, they're adding up the number of shots they've done. They're multiplying by 40 bucks. Okay.

And they're sending a bill to the United States of America. Yeah, Jack, this is going to look a little bit more like a CVS receipt that they're sending. So what's the takeaway for our buddies over at Walgreens? We got ourselves, the first twin profit puppy. Snackers, Johnson and Johnson, that vaccine's going to cost $10 a shot. Moderna and Pfizer, they're charging like $15 to $20 a shot each. But Walgreens doesn't pay for that. The federal government is paying for the vaccines and shipping them to Walgreens out of their own pocket.

Okay, so let this sink in. This fascinated Jack and me, $40 bucks a shot becomes pure profit for Walgreens. Walgreens just has to pay for the pharmacist time. The cotton balls, they rub on the arm, the rubbing alcohol, and the band-aid after the shot's done. All right, Jack, so let's pull out the whiteboard here. Let's say they're making, I don't know, like $20 a profit per shot. And then they got $20 million more shots coming through this summer. That's pretty simple, Matt. That's $400 million of extra profits just from the direct administration of shots this That also means that Walgreens is getting about a 25% boost in profits for free. And wait, Walgreens isn't just going to let you walk out after the shop.

No, no, no, no. You got to wait before and you got to wait after the shot, which is, you know, shopping time. Maybe you get that NyQuil. Oh, also, now you're going to start associating Walgreens brand with getting back to freedom thanks to the vaccine they just gave you. And Walgreens is going to get your contact information if you sign up for a vaccine. So get ready for marketing emails and texts. For retailers like Walgreens, this vaccine,

It isn't just a profit puppy. This vaccine could be a quintuplet profit puppy. For our third and final story, this one like almost snuck by, but then we caught it. Apple is investing in a music label disruptor. It looks like the music streamers may want to think about cutting out the record labels. They're like 12 conditionals in that one, Jack. It would be like war if they did. That's why I'm throwing so many hedges in that.

It could, would potentially, maybe would potentially be. The Snackers, this story starts with the record label business model. Yeah, it does. Basically, here's how the record labels work. You find young artists, you finance them with resources to scale, and you get them discovered. In exchange, the record label owns the artist's music, and they control their sales and listener data. So think of the record label as like a venture capital firm, and then in this case, Lizzo, she's the entrepreneur. And the big three record labels are Warner Music, Sony Music, and Universal Music.

But here's the surprise player here. In 2017, a music mogul named Steve Stout created something called United Masters, basically a disruptor of the record labels. United Masters is messing with the record label business model. They're providing the same tools for musical growth and discovery as the labels do. But here's the key. They only take 10% of revenues instead of like owning the whole album and everything the artist does. And they give the musicians all the data so that they can commercialize their product.

So they help Lizzo become Lizzo and then Lizzo still gets to own. juice. And one million independent musicians have already signed up with United Masters. Which led us to the news, Jack and I noticed. United Masters just raised money in a private fundraise with one particular investor. Apple. Apple is their key investor. So our first thought on this, is Apple Music trying to disrupt the record labels? Well, Apple Music gets 10 bucks a month from their subscribers, but about two-thirds of that goes directly to the record labels. Yeah, and the three major record labels, they've negotiated two-thirds of a cut of all streaming revenues since they own the music. So if Apple could somehow find a way to cut out the record labels and go directly to the musicians

instead, then Apple could probably keep more of that $10 a month for themselves. And the musicians, they could probably take home more of that money too. And you are seeing creators everywhere use tools to go directly to consumers to monetize their audience. So we're thinking United Masters and maybe Apple, they want music to be next. So, Jack, what's the takeaway for our buddies over at United Masters? Traditional power brokers are falling all around the economy. Snackers, look at the media brands out there.

They're losing writers to substack. Investment banks are losing traditional IPO clients to direct listings. Shopping malls are losing retailers to direct to consumer startups with lowercase font names. Now, the record label Warner Music has a publicly traded stock, and it rose 5% yesterday, despite this seemingly threatening news. All right, so we're thinking investors don't think. Apple cutting out the record middleman is like an eminent threat. But record labels could be the next power broker to fall if what they broker has less power. Jack, can you whip up the takeaways for us over there? Deliverous stock fell in its London IPO. Yeah, maybe U.S. investors would have seen this

IPO differently muggily. Yesterday, we said every government policy is a business opportunity. Yeah, well, today, this government decision to boost vaccine reimbursements, that's a twin profit puppy for Walgreens. For a third and final story, Apple just invested in a company that helps musicians monetize Sons record label. Apple may want to cut out the record label here. Now, time for our snack fact of the day. This one sent in by Logan Rex from lovely Wapak, Canada, Ohio. After coming back from their historic space mission,

the United States government made the crew of Apollo 11 fill out customs forms because technically the astronauts left the country and had brought back foreign cargo with them. The customs form states that the return cargo included moon, moon rocks in moon dust samples. I got to say, I feel like they could have turned their head the other way, just let the guys in. I know, this is like they're trying to make a three certainties happen, death taxes and customs. I mean, isn't it duty-free? Sir, can you take your shoes off and remove all the electronic devices from the spacecraft? No, Snackers, as a reminder, tomorrow is good Friday. Stock markets are closed, and so is this pot. So we'll see you Monday. Unless like, Jack,

if you have the baby this weekend, I mean, I don't know what your timelines like, and it works for me. Monday is actually D-Day. It's due date day. So we'll see you. See, but actually it would be great if you did this Saturday. I'll let Alex's belly know, Nick. Please communicate the best. Snackers, you look fantastic. We can't wait to see again soon and ask your friends, H-Y-H-Y-S-D. Have you had your snacks daily? If you know, you know.

And before we go, Snackers, happy birthday to Edina Ratchelso. And Christina Big Tina Dina Daly in Rockland, California. And Marcelo Santana in Porteo, Ecuador. And Chris Williams in Kings County, New York. I like what you did there, Jack. And Luke Labradi in Toledo, Ohio. and Jessica Sullivan in Chicago. Zach Malam over in Lafayette, Louisiana.

And Chris Lindauer in New Athens, Illinois. And Cordelia in Richmond, Virginia. And Sam Renzi in Newport Beach, California. And Messach, Abraham in New Jersey. And Ali Greenberg in Philadelphia. And Peggy's son from Bayside Queens. And Christine Rothaker in Los Angeles. And Tyler Liss, happy birthday in Long Valley.

And Debbie Heckman, happy birthday in Ocean City, Maryland. Also, Jack, Eric Shaw. He's got a big art show over in Greenpoint, Brooklyn. And Drew Sopra, congrats on starting the NBA. in Delhi India. Jack Von Sosin's got into BYU law school. Congratulations to Ali Miles for passing her psychiatry boards in Princeton, New Jersey. And Julie Pardee got the first job in venture capital over in New Jersey. And Mike Alexander is celebrating a one-year snack anniversary.

Yeah. Lake Charles, Louisiana. We like that. This is Jack. I own stock of Amazon. Nick on stock of Apple. 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 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.