The Best One Yet - “Lulu, Lulu, on the wall” — Lululemon acquires Mirror. Uber may buy Postmates. Netflix’s $100M black bank bet.

Episode Date: July 1, 2020

Athleisure icon Lululemon splurges $500M to acquire Peloton-ish in-home workout startup Mirror. Fresh off its acquisition breakup with Grubhub, Uber is looking to rebound with Postmates instead. And Netflix will stream $100M of its cash into black community banks to fix the bank desert hole in the financial system. $LULU $UBER $NFLXHere’s a Robinhood Learn article, authored by Nick and Jack (What is an ETF): https://bit.ly/3gfhd48Here’s Robinhood’s Newsfeed, accessible if you download the Robinhood app and set up an account: Snackspodcast.robinhood.comLearn 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 1st, Jack. It is July 1st. Nick, I feel like I'm lacking my typical summer glow. Jack, I feel like at this point we can just round up and go right to 2021, right? I don't know.

But my skin is basically whole milk right now. Snackers, this is the best snacks daily we've ever done. First story on the T-boy Jack? Lulu Lemon just blended in some Silicon Valley Tech into its traditional spandex yoga recipe. not do shabby Lulu Lemon splurge half a billion dollars to acquire mirror. Mirror being, of course, the Pelotana Fancy furniture. Second story, Jack, what else can we sit on? Fresh off failing to acquire Grubhub, Uber has found a rebound acquisition in PostMage. Just like Mom always used to tweet, there are plenty of fish in the delivery app see. You got to say it again and again.

Mom's tweeting now, hon' it? She was an early adopter, not our moms. Third and final story. Netflix did the Black Lives Matter post like so many other corporations did. Exactly one month later, though, they're taking an ever bigger step. They're putting some of their money into black community banks. Snackers, before we hit those three great stories, our sportsless spring and summer is almost over. It was so sportsless. I caught Jack in a closet, putting on eye black and yelling into a radio the other day. When in doubt, ask, what would Tebow do? July 23rd is opening day of baseball, which we played an empty stadium, still charging $18 for like a bud light with ice.

Actually, you don't have to buy an $18 bud light because we'll all be watching. at home, these stadiums will be empty. By the way, the designated hitter officially won the battle in the war. You know what we're talking about, Arod. If you know, you know. Now, with nothing to do during the sports apocalypse, turns out a lot of us have turned to investing. So Jack and I want to shout out Robin Hood's digestible education resources aggressively digestible. Firstly, Robin Hood snacks. This podcast and our daily email newsletter were launched by Robin Hood to help democratize financial news. Secondly, you got Robin Hood Learn, which has a library of articles on Finance, one topics that stretch on for like eons and ages and years.

You can hang out in this library like it was study hall. There's actually an article called What is an ETF? Nick, do you know what an ETF is? Exchange trade of funds. Jack and I like to think of them as like you throw in the banana, you throw in the raspberry, maybe a little bit of chia. They're like smoothies. An ETF is pretty much a stock smoothie.

And Nick and I literally wrote an article on Robin Hood Learn about that. Sat down, put pen to paper with a little bit of granola, whipped up the article for you. The third resource we want to highlight is Robin Hood News. To all the Robin Hood users out there, you click in the center of the app, and we've got free access to the Wall Street Journal, Reuters, CNN Business, and a whole bunch more news. Robin Hood's mission is to democratize finance for all, which includes financial news and financial understanding. So Snackers, you can check out learn.robinhood.com for more finance 101 articles that

could take you like three semesters to read through. And we know you love Robin Hood snacks, so we've got other business news to scroll through right in the middle of the Robin Hood app. more on all those offers in the description of this episode. In the meantime, we're going to whip up. What do you think? Our three stories, Jack? It's Tyoy time. You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal out the way. It's 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. 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, Jack, thrown the spandex second day in a row, Lulu Lemon drops half a billion dollars in cash to acquire Mirror. Which is basically a big, smart fitness TV company. They're basically like, let's take this TV and just turn it 90 degrees. It's vertical. Now, our first thought upon seeing this acquisition by Lulu Lemon,

how did Apple not make this acquisition of Mirror? Yeah, which then led to our... A second thought, now the pressure's on for Nike, Lulu's rival, to bi-tonal Mir's rival. Third thought, how did Lulu Lemon only mention the word synergy once in the press release for this acquisition? But they managed to mention sweat life three times. What M&A lawyer signed off on this thing, Jack? Sweatlife runs through the veins over at Lulu Lemon.

Now, Snackers, Mir was founded by a former ballet dancer back in 2018 when she realized she was pregnant and she kind of needed an in-home workout opportunity. Correction. Once a ballet dancer, always a ballet dancer. Preach Jack. And think of Mirror as like Peloton meets West Elm meets Sonos. The kind of thing that Reese Witherspoon will get on.

Oh, you probably see six of these in Big Little Eyes, episode one. It basically sponsored the show, Jack. Now, it is a wall-mounted floor-to-ceiling television that doubles as a mirror. This is the only unprofitable venture-backed hardware product that will also yell at you. It is a combination of a lot of different techs, but it's really a beautiful piece of furniture

that you can buy for $1,500. that will also stream Pilates, Hit Workouts, and Yoga Workouts for $39 a month. Which, by the way, made Jack and I realize there is a wonderful cheap mirror opportunity out there if you really want to make this thing work. If you want to live the frees for me lifestyle, buy a $5 Amazon Basics Mirror, lean it against the wall, and then put your computer on like a milk crate and just stream something for fruit. Snackers, these are the kind of insights Mirror doesn't want you to know about, but Jack and I are cooking up all day long.

Unlike Peloton, which seems similarly fitness and tech and also a piece of furniture in your house, you're not going to store mirror away in some closet like it was a laundry basket. No, this isn't like the Count of Monty Crystal like hiding away in the basement. You got a feng shui element when it comes to mirror. Mirror is super techy, super simple, and kind of beautiful, not just because you're looking at a reflection of yourself. By the way, for some context, Peloton has 900,000 subscribers. Mirror's got, what would you say, Jack? I think they said tens of thousands.

A order of magnitude less than Peloton. Which brings us to the big question, why is Lulu Lemon an apparel company acquiring Mirror Tech? We can tell you why. Retail's not dead. Bad retail is dead. Never gets old Jack. This immediately made us think of Lulu Lemon's 25,000 square foot store in Chicago that literally had like three yoga studios in it. Lulu Lemon wants you Instagramming your retail experience at Lulu Lemon.

And that 25,000 square foot Chicago spot, Nick, I think they have two yoga. studios in the store. Feels more like Disney World than the gap. Imagine you're thinking about buying some ABC pants at Lulu Lemon Chicago spot. Okay, Nick? Feel you, Jack. They look great. You're looking sharp. And you're thinking to yourself, can I wear these for both downward facing dog and standing desk? Question that comes to our minds frequently throughout the day. Well, imagine if there is a mirror and you can stream a yoga class while you're trying them on, like in between dressing room visits. Capital M mirror. Another opportunity. Imagine the capital M mirror is in a dressing room at a Lulu Lemon, which is basically a huge iPad, and it serves as your personal shopping assistant.

You're not sure if you want the burnt sienna or the Robinsedg Green. You can literally just look at the mirror and like swipe right and see yourself in the other color. Boom, mirror acts like a human series. Finally, imagine you got a mirror in your living room and use it for workouts, but you can purchase a new Lulu Lemon outfit directly from the mirror and like try it on digitally. You heard of direct to consumer? This is direct-de-ist to consumer. So Jack, what's the takeaway for a buddies over at Lulu. The most powerful use of mirror for Lulu Lemon would be Lulu Plus. That's right. It's not a thing yet, Snackers. You never heard of Lulu Plus, but it should be a thing. We're talking a premium Lulu Lemon monthly membership, aka Sweat Life Prime. We're still working on the

name options, but we're giving them to Lulu Lemon for free. Think about it. Lulu Lemon CEO did a bunch of interviews yesterday to talk about the acquisition, and he kept on referring to customers as guests and members. But by having mirror, Lulu Lemon now can create a premium membership subscription with a whole bunch of things that other rivals can't do. All right, let's say it's like a hundred bucks a year. Yeah. You get discounts on mirror hardware. Not bad. Discounted yoga pants at leisure wear. I like where you're going. Premium workout content, maybe even virtual fitness events, you can only stream through your mirror. That would be a Lulu plus option now that they have mirror. That could bring Lulu Lemon Netflix-style monthly revenue, soul cycle level community,

and Facebook-type connection. Investors were thinking similarly awesome outcomes, and they bumped Lulu stock up 5% yesterday on the acquisition. For our second story, Netflix just pledged to reallocate $100 million of its cash to black community banks. It's trying to plug a giant hole we have in this financial industry. Snackers, open up your Netflix new show on Netflix called Nice Problems to have. Today's episode, What to Do When You Have Too Much Cash? Because Netflix has five billion. dollars of cash, which is half a lift, just sitting there. And like you and me, most of Netflix's cash is just sitting in bank accounts. Not doing much, just hanging out, trying not to get into trouble. Trying not to get into trouble. Which brings us to yesterday's news, Netflix is shifting

$100 million of its cash from big bank checking accounts to community bank accounts. Specifically, we're talking the Black Economic Development Initiative and the Hope Credit Union. That's who's getting the $100 million. This comes exactly one month after a very specific, Netflix tweet. To be silent is to be complicit, black lives matter. Exactly one month after tweeting those beautiful words, Netflix is literally putting their money where their mouth is. And that's because Reed Hastings has a big library of books and he knows that rule number one of capitalist America is money moves things. Social media posts, which we've all seen so much of, they can build support for a cause, but money can really drive that change home. Great real life

example. We can all see of this. Let's look at college admissions. out all the time. We've all seen college admissions departments pledge to be need blind when it comes to who gets the acceptance letter and who gets rejected. Pledging is nice, but it's not a promise. So when Mike Bloomberg donates two billion dollars to Johns Hopkins University, that pledge becomes a promise. And then admissions departments can actually be need blind. You kind of needed the billions. Now, Netflix isn't even donating billions of dollars like Mike Bloomberg. They're just taking 2% of their cash and moving it from one bank account to a different bank account. And here's how this is going to go down. Netflix money will find its way to banks that then lend within the black community.

And then those banks will use Netflix's money to finance loans to black people and to black businesses. And then it slowly chips away at the opportunity gap so more black people can climb out of poverty. That's the beauty of the financial system. You need banks for economic growth. So, Jack, what's the takeaway for our buddies streaming over at Netflix? There are three streets in America. Wall Street, Main Street, and what street? What Street is, you know, the forgotten part of America that's way too overlooked by corporations, and it's basically poor neighborhoods. You may have heard of food deserts, basically a neighborhood that doesn't have a fresh grocery store because Whole Foods doesn't think they can turn a profit in that neighborhood. You've heard of those food deserts, but we're talking about bank deserts. There are more and more bank deserts in America's poor neighborhoods because banks are closing up branches that they deem unprofitable. Netflix has seen them, and they know that you need money to make money. So Netflix is sending money over to What Street? For our third and final story, Uber is aiming to rebound from its Grubhub breakup ASAP.

It's reportedly in talks to acquire Postmates for $2.6 billion. Whip open the old romance diaries from back at delivery app summer camp in the day. After years of fighting each other, this is the summer of love for those big delivery apps that you get your burrito. Turns out, Snackers, the corona economy is amped up the urgency for DoorDash Uber eats like Grubhubhub, and postmates to become, you know, profitable. Spoiler, none of them are profitable yet. Mom and dad are like, you know what? You really need to find someone, guys.

Last month, though, Uber thought they found someone, but then they got their heartbroken because of a classic European romantic accent. Feels like the climax of a gosling film right now. Uber was close to acquiring grubb, but then a European heart throb came in and swooped it away. Boom, you grant out of nowhere. This guy starts talking.

And people start loving. Grubhub turned down Uber and merged with a company called Just Eat Takeaway Instead. Now, together, they're probably going to be called Just Eat Takeaway Seamless Grubhub because that's what they would do. The old quadruple hyphenated name is most likely for that couple. Works with some couples doesn't always work with other couples. But this brings us to this week's news, which comes from a little birdie called PFWTM. People familiar with the matter. Jack, what did the old PFWTM say. Uber is on the rebound. Yeah. They're in talks to merge Uber Eats with Postmates. No joke. Postmates could end up being a pretty nice catch for Uber Eats too, though, because Postmates controls one core section of the country. Southern California, the Los Angeles market. Pretty much it. That's where

you're seeing Postmates. And if Uber acquires Postmates, that means they'll also get served, which is like the dog in this relationship. Yeah, Postmates has this cute little, like, minion-looking thing that will deliver you a sandwich in an adorable self-driving way. It's basically a Coleman cooler that you can drop a burrito into, and it'll roam the sidewalks to your doorstep and then text you to come down and get it. Now, Jack, before this relationship gets to find, we should point out that there is like an alternative world and destiny out there, potentially for Postmates. Postmates could stay single, an IPO instead. It could turn down the deal, and you know what? Postmates has kind of been talking about doing this for like a years now. They've been rumored for about

a year to be preparing for an IPO, and that would give them the champagne pop in New York City moment that every entrepreneur strives for. Now, call Jack and I a pair hopeless romantics over here, but we think Uber and Postmates could be worth a lot more together than they are separate. No pre-nup necessary. So, Jack, what's the takeaway for our buddies over at Postmates and Uber? Actually, a pre-up is definitely necessary. Absolutely. Because in a commoditized market, merging could be the best way to make profit. Snackers, let's look at the numbers. Uber's number three in the delivery market and controls 22% of food delivery in the United States. Postmates is number four in the delivery app space, controlling just 8%. And the Star Cross pair are both behind DoorDash and

Grubhubhub in the entire market. DoorDash and Grubhub are number one and number two. Now, to separate from the rest of the pack, they've had to resort to like promo codes to stand out the entire time. That's because, let's be honest, all of these delivery apps have the same design, the same function. Everything is almost identical. So you need to differentiate with the seven dollar off promo code. That's the only way they're getting to use one or the other. But together, they could stop beating each other up with these discount and promo codes that kill their profitability. Together, if they control 30% of the market and all of Los Angeles, Uber and Postmates could be big enough to raise prices on consumers. And we all know that's

the goal of every delivery app power couple. Jack and you'll whip up the takeaways for us over there. Lulu Lemon just acquired Mirror. The company, not the mirror. We want to see a Lulu Plus membership even though hands-on instruction not included. Netflix is sending some of its cash to banks supporting black communities. Because you need money to make money. Third takeaway, Jack? Third and final story, Uber wants to make unadjusted profits for the first time ever. So together, Uber Eats and Postmates are more valuable as a couple than a part.

Now, time for our snack fact of the day. This one sent in by Tiffany Schmidt in lovely Los Angeles, California. She's probably snacking on some sushi delivered by Postmates, right now. Must be nice, Tiffany. must be nice. Now, in 2018 and 2019, it combined $300,000 was spent on ads that were focused on racial justice. He had 10 ads from seven brands and they ran 500 times. Not that much, but you have casual amount. Now, in just the month of June 2020, Nick, $1.6 million was spent on ads focused on racial justice. And that came from 26 ads from 21 brands that ran 1286 times.

Add that up, Jack? In just one month. There was six times as much money invested in racial justice messaging as in the two years prior. Snackers, we've said it before. We'll say it again. Accelerated trends in the corona economy. This is a good one. Before we go, happy birthday to Lauren who just had a baby named Reagan in Wawatuza, Wisconsin. Say it again, Jack, because you might as well say it again.

Wausauusa, Wisconsin. Let's make it three, baby. Wawatusa, Wisconsin. Happy 52nd birthday to KSoon and her cat, Juju as well. Also, HBD and Nicole from Westfield, New Jersey. We know you and C.J. We're getting ready to marry the summer. That doesn't mean you can't still have a wedding registry, even though you postpone the wedding.

True. We're pumped for next year. Snackers, love being with you today. Remember, you got to share your snacks. Ask your friends, have you had your snacks daily? HY, HY, YSD, and we'll see it tomorrow. If you know, you know. This is Jack. Nick and I both on stock of Lulu Lemon and Nick owned stock of Apple.

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who are associated persons of Robin Hood Financial LLC and does 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.