The Best One Yet - Lyft IPOs, Facebook’s ad model gets sued, and the Mets’ Moviepass situation

Episode Date: March 29, 2019

Lyft’s IPO is today, so we tell you how it got here. Facebook’s facing another lawsuit, this time about its core business model. And the Mets are Movie-passing themselves this baseball season.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's Friday, March 29th. And this, what do you think of this one, Jack? This is the best one yet. Feels so good. Feel so right. Markets barely budged yesterday. But we went in. We found three wonderful stories, including our headliner. We got to talk about the headline. I'm going to jump right out and say it. We got Lyft's IPO today. This is exciting. And then under four minutes, we'll give you all the highlights and interesting nuggets you need to know. And we got some good quotes from Travis over at Uber on this one. I like how you called him Travis, Nick. Travis Kalanick just goes by Travis. Pretending I know the guy. Second story is about Facebook.

Its core advertising business model is getting threatened again. And by again and threatened, we mean it got sued. Third and final story is about the movie pacification of baseball. In honor of Major League Baseball's opening day, which went down yet. Please tell me this involves subscriptions. I just want to know it involves subscriptions. Okay, talking about subscriptions, We just found this, like, hilarious thing we got to talk about. Jack, what is going on with

this, like, Spotify Premium Duo situation? Spotify's, like, quasi getting into the dating app game. They're creating a, like, dual Spotify account for him and her or him and him or her and her, so that you can have one account, and it creates custom playlist based on what you're both listening to. For a discounted price, kind of like a family plan. And it's combining your interests in music even, if you're, you're a couple. First reaction, perfect for long-distance couples next. Exactly. Who can't get to be with each other, but at least they can get to be with each other's playlist. Right. He likes Ed Sheeran. She's more Adele. Spotify comes in, makes a beautiful

English mix between the two. Unfortunately, though, that's not the case. This premium subscription requires that you cohabitate with the person. So it's only works for live-in couples or roommates. In fact, it like gets aggressive. They like email you a dozen times, apparently, just to figure out and make sure you're at the same address. They need to prevent password sharing abuse. I respect that, but still, let's petition.org this thing to open it up to long distance. It can create a lot of love. But before we talk about Lyft's IPO, please listen to this.

You're tuned in the snacks daily. We spoke to the lawyers. It's 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. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC. Member Fenra slash SIPC. For our first story, Lyft is IPOing today. Its shares are going to be available to buy or sell.

And it finally gets to be like the number one, not the number two ride chair. Little brother finally gets to sit in the front seat next to mom and dad. Like finally, just this one day. Exactly. feeling. It's like your little sister's birthday. She's smaller, but today is her day. By the way, do you know your Lyft rating? I don't. I tried to find it the other day. I couldn't find it. No, it's really hard to find it. I don't know. I asked a driver, and he wouldn't tell me, which made me really concerned. That is not a good sign. But let's back up. Lyft almost could have

not been here today. Oh my God. Jack, it should not have been here. Travis Kalanick, the founder of Uber and CEO until recently, said in a podcast interview in 2011, there will be lots of Uber competitors and we will kill them. Guys, that is a direct quote about killing the competitors. In fact, five years ago, Uber tried to buy Lyft for $3 billion. Okay, so Uber failed to kill Lyft, then it failed to buy Lyft, and now Lyft has survived. It's IPOing today. Its valuation is $23 billion.

Guys, this makes it the biggest IPO in two years. And the last time it was signing this big, it was Snap. Yeah. And Uber is expected to IPO in a couple months. It's actually about five times bigger than Lyft, but let's focus on Lyft today. Now, today is the big day, but it's the last couple weeks before today that were actually kind of the most fun. That's the road show. Lyft management packed a away suitcase and has been going from airport to airport talking to VIP big time investors. It's basically like speed dating, except they're like a lot of slide decks and every meal gets to be expensed. Yeah. So first, let's talk about the financials that Lyft was so excited to share during this road show. And people were excited to see these things. Guys, get this. Lift in 2015, back when Travis made that offer to buy the company, it only had 15% of the ride share market.

I was proudly part of that 15%. I was an early Lyft convert. Then by 2017, Lyft had 22% of the ride hailing market. And then in the last couple years, in the delete Uber era, that's jumped to nearly 40% of the market. Let there be promo codes. That is how Lyft got so much of that market share. But revenues doubled last year in 2018 to $2.2 billion. And it's still making a giant loss. It's almost lost a billion dollars last year. But it's chasing like all parts.

Anything with wheels in like the transportation market, Lyft wants a piece of that action. Right. And that's why investors are excited. because the transportation market in the United States is $1.2 trillion every year. So Lyft has bikes, scooters, Lyfts, Lyft line, Lyft XL, it's got everything. Investors are so into everything that's going on with Lyft right now that at the end of the road show, just as it's about to IPO, they raise the stock price at which the company will IPO to $72 from like around $68. Right. And that's why the valuation is $23 billion. Lyft is very happy.

So, Jack, what's the takeaway for our buddies over at Lyft? Uber thinks external for growth, but Lyft thinks internal. Uber's focus is international expansion. It just bought Kareem in the Middle East. Food, delivery with Uber Eats, global domination. Yeah, it's kind of the evil empire. It wants to dominate everything everywhere. Lyft is a little different.

It's focused on, like, company wellness and driver happiness. Its theory is that happy drivers and happy customers will make a good company. And the thing they're doing and focusing on is those happy drivers. It just committed to like offering up shops where drivers can get their cars repaired for cheap. Yep, it's offering bonuses in the form of Lyft stock to its top drivers. Just this week we learned they want to give free bank accounts to drivers. With like a cool debit card. Now, Uber is probably doing these things too, but Lyft has done them first and somehow more earnestly. For our second story, Facebook stock actually dipped a tad today because it just got sued over its core thing, its ad business.

Ah, Facebook, I got to confess to you. I didn't even check my wall two weeks ago on my birthday to see who posted a happy birthday post. This is the perfect venue for Facebook Confessionals, Jack. Now, the Department of Housing and Urban Development, a mouthful, but a great name, is suing Facebook right now. Right. HUD is the abbreviation. HUD claims that Facebook lets advertisers pick the race, the color, the national. origin, the religion, the family status, the sex, and the disability of the users, it can

target with ads. And HUD, again, we love that name, says that's discrimination. That's kind of like clearly discrimination. At least it sounds like it. And it's in violation of the Fair Housing Act passed in 1968. It actually sounds like another definition of discrimination. Now, here's the funny thing about this discrimination. Marketers happen to love stereotypes. And there's the ones who are actually buying these ads. They really do. They'll build a product designed for a certain type of person, and then they'll target that type of person with ads. For example, a lawnmower company loves to advertise their lawnmower on guy-ish TV shows. Right. Or you see these gardening products focused on female-oriented TV shows. It's lame, it's expected, it's crude, but it's also the industry standard.

It's ridiculous, too, because as a guy who just likes to throw on his AirPods and do the laundry, I'm sick of downy ads, not having any guys in them. Yeah. You never see it. It's really lame. But this is why marketers love Facebook advertising, because they let you target perfectly who you're looking for. 25-year-old Baltimore Orioles fans who love cats, Facebook will deliver that for you. The Great City of Baltimore. Now, they're designed to actually exclude certain people from even seeing those ads, like if they're not from the great city of Baltimore.

And that can be discrimination. It can be a legal discrimination. So, Jack, what's the takeaway for our buddies over at Facebook? Facebook has to decide what is OK discrimination and what is all. Oh, my God. I want no role in being part of the job that has to do that. That is brutal. Like, is it okay to exclude grandfathers in ads for skydiving? I actually think that is okay. Okay. That's probably actually illegal, Nick. But what's not okay is excluding people of a certain race, for example, from a certain housing community. Like, that's not cool. Yeah. Like, when it comes to three

things here, housing, jobs, or credit, you can't be advertising based on race. It's just straight up illegal. Right. But the rest, not. housing, not jobs, not credit. That's up to Facebook, and it can allow discrimination. Totally. And whatever Facebook decides, there's probably going to be some controversy wish it. For our third and final story, I love this one. Your Snacks Daily Team found a fascinating trend. It's the movie pacification of baseball, and it starts this year. Nick, yesterday was opening day. It was a great day. I'm feeling it. I got it. He's got it in my bones. This is our year. It's big. He got hot dogs. You got cracker jacks. And you got like,

I don't get it. But some people eat the peat. and they just let the peanut shell spill. It's weird. A baseball game is a hostile place for a vegan significant other. Now, Jack is speaking from like very deep personal experience there. I can, I can tell and I know. Now, the reason this whole trend came about is because baseball attendance actually shrank over the last three years. Yeah, baseball stadiums are actually getting smaller to spare themselves the embarrassment of the whole upper deck neck being completely empty. Let that sink in. They can't fill the seats so they're getting rid of the seats. and they've come up with a solution.

Movie pass for baseball. Yeah. It's being debuted by a pioneering team in Queens, New York. We're talking about the New York metropolitan. They just unrolled a plan. For 40 bucks a month, you get access to all Mets home games, but you don't get a seat. You just get standing room only. It's kind of rough.

Now, this is an entirely new definition of the cheap seats because you're going to bring a date, and he or she is going to be kind of concerned. That's true. There's going to be an usher following you the whole time saying like, is that your seat? Don't sit down. Don't sit down. What are you doing?

Please show me your ticket. Now, this is great for the Mets for like a whole bunch of reasons. You might think the Mets don't want like, you know, low-income millennials and Gen Zs in their stadium because they're not spending much money. But you know what? They probably still want to drink and they're probably hungry. Yeah, when we get into the stadium, it's only about getting us in. After that point, once you're there, you're probably going to end up spending the $14 on a

bud light. Yeah. Plus, gambling has been legalized in many, many states and many more soon to come. So these people could spend money on that, which the stadium could get a cut of too. Yeah, stadiums know that when they're full, it means the fans there are spending more money on the ridiculously overpriced stuff. And the people watching at home are just happy someone is actually there. Yeah, Nick, fun fact, Detroit Red Wings, they changed the color of their seats so that it would be less noticeable on TV when they were all empty.

S subtle. Settle. I like it. So, Jack, what's the takeaway for our buddies over at the? the Mets who are movie pacifying everything. Failed companies can sometimes change the world. Yes, we're talking about movie pass here. Remember, it was a monthly subscription, rocked the world in 2018, 10 bucks a month, go to as many movies as you want, and it was like all up in your face. Yeah, and if that deal sounds too good to be true, 10 bucks a month, that's because it is.

It's technically still a live movie pass, but it's like in the ICU. But no, you know what? It's going to be a martyr for other industries because it's changed the game. Yeah, AMC, a big competitor to movie pass, has basically just taken the whole model, applied it to itself, total copycat, and now it's doing the same thing, but successful. And now the Mets are stealing like an artist by bringing movie pass to baseball. Jack, why don't you whip up these snacks daily takeaways for us? Sure will. First of all, the Mets are movie passing themselves, showing that failed companies can change the world. Guys, we've got a bold proposal. Mets, after six innings, just let the standing fans sit in the empty seats. Just let them sit.

Amen. Amen. Amen. Second, Uber is thinking externally for growth, but Lyft with its IPO today thinks internal. Next time you're in a Lyft, simple question. Ask the driver, which they prefer. And Facebook has the brutal task of deciding what kind of discrimination is okay for its ad platform and what kind's not okay. Zuck, trick question, it's none of them.

Like, none of them are okay. Guys, time for our snack fact of the day. This one, you know, I don't even know how to contextualize this one. What's going on? Well, here's some context for you. Disney is about to open up a new Star Wars theme park, and they're expecting such an onslaught of new Star Wars fans. So many. They're banning, like, big strollers.

We don't know what the big stroller, like, limit is, like, and how big big is. But if it's a big stroller, it can't come in. It's actually 31 inches wide. Like, is that big? I don't even know. I think that's, like, airport seat width. I can't tell. But they don't want your stroller getting me in the way of seeing a Luke Skywalker, like, hologram.

It's totally. Totally fair. A couple other big stories yesterday that you need to check out the Snacks Daily email newsletter for. First, Wells Fargo CEO stepped down after three years and investors are thrilled. Yeah, the stock jumped 3%. And then on the other end of the spectrum, Wow Airlines, the budget Icelandic airline, canceled all its flights yesterday. And then it canceled the entire airline. Snackers, I loved spending the last 15 minutes with you. Unlike Wow Airlines, we are not canceling. We will see you again Monday. Have a great weekend.

We'll be there. Great week, guys. 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, 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.