The Best One Yet - Match drops 5% on Facebook Dating, WeWork’s valuation may get halved, and Slack’s “10M” problem

Episode Date: September 6, 2019

Tinder-owner Match fell 5% on word Facebook’s new dating feature goes live, like, right now — even though Match already knew the competition was coming. Slack released its first earnings report since going public, revealing its next 10M users are harder than the 1st 10M. And WeWork may slice its valuation from $47B to about $25B before it IPOs because critics think its IPO paperwork is a “masterpiece of obfuscation.”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. This is snacks daily. It is Friday. September 6th, a lot of assets. This is the best one. I knew you were going somewhere that. This is actually my favorite snacks we've ever done.

Boring headline moved markets up yesterday. The U.S. and China are going to talk about trade. Been there, heard that. It's happened before. Three stories are a lot more interesting. Wonderful mix here I want to point out. But it's these are big companies. The owner of Tinder and Hinge is called Match Group.

They dropped 5% because Facebook's dating feature is going live in the U.S. starting yesterday. And here's the kicker. Instagram. It's going to the gram. Second Story Jack. Slack released its first earnings report since going public in June. The stock plummeted. The first 10 million customers for Slack were one thing. The second 10 million, we found a problem with them. Third and final story is our unicorn of the day. We work. It's like an injured unicorn jack. It's a wounded unicorn with rainbow blood.

It just crests down the leg. We told you the other week about its IPO paperwork, the S-1. Now it plans to maybe cut its valuation in half from $50 billion to $25 billion. That is a crushing wound. This one hurts. You got to see the nurse about this one. But before we jump into all three stories, happy alternative meat day. It is plant-based Friday on snacks daily. No alliteration, no rhyming there doesn't matter. Four companies just amounted non-meat meats. Let that sink in. Four different companies. Now we're going to share these companies with you, but we're going to go in the order of like worst name to insanely good name. Kroger is the Midwest powerhouse grocery chain.

It just came out with the deli meat. Plant-based meat. It's called Simple truth. Simple name, not that different, kind of basic. What else we got? Number two, Tyson, the chicken master came out with a plant-based shrimp. Technically, they invested in a shrimp company. But the name of that plant-based shrewing company is called New Wave.

And then this one, this is starting to get good. Ramp this up. Hormel is the maker of spam and like ham in a can. Don't understand what that is. I think it's lard in a jaw. Is that the original plant-based meat without the plants? It came out with a plant-based meat and calling it happy little plants. That is just a fantastic.

You know what that is, Jack? That's a Halloween costume right there. Yes. And then this final one. Jack and I spent a good six minutes staring at this one. We couldn't believe it was too good to be true. What have we got? Kellogg, another Midwest-based traditional meat company.

Came out with a plant-based meat. Wonderful name. What do they got here? Wait, set it up. A little dramatic pause. Incognito. It doesn't get any better than that. I don't know what team of interns they had over this summer.

Snackers, hit us up at Robin Hood Snacks. If you have a better idea for a plant-based meat name than incognito. We want to hear it at Robinette Snacks. Let's hit 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. It's snacks about to hear rain food. It's 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. Nope. 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 Match stock Tinder's owner match stock

It just fell 5% It's because Facebook's dating app Is live in the app store Right now Happening right now On your fingertips The big question Where is the LinkedIn dating option

We know there's like a bunch of MBAs Starting business score right now We know you guys want that It's like you and Julia You're both proficient in level three Microsoft Excel. The compatibility is undeniable. Just go to this shortcut and you can be on that first date ASAP. Now, Facebook made it Facebook official yesterday. Dating is available. So true. Now, the idea in theory makes a lot of sense here. In a nutshell, Facebook already knows everything about you. Creeply. It knows your hometown. It knows where you live. It knows when you're born. It knows your relationship status. It knows your pictures. You're scaring me. I don't want to be here right now. So it should be able to match you with the best person because it knows everything about everyone else too.

Here's an example. Jose, he's got his religion listed as bowling. Juliet is in a weekly Ladies Hit the Lanes League, aka Guttergall. Sounds like they'd be a nice match. Zuck's going to make it happen. Now, this isn't a new feature. Facebook tested this first out in Colombia in South America. Very true. And it rolled out to 20 countries yesterday. USA, Canada, Brazil, Mexico, a bunch of others, comes to Europe in 2020. But we already knew about this like months ago. They've alluded to it. They've told us it's going to happen. It was only a matter time before it hit the U.S. Yeah, but in Colombia, they... discovered that users there couldn't figure out how to set up their dating profile.

Right. They basically used these countries as like mini petri dishes for experimenting. So Facebook told this yesterday that they're actually going to help you build your profile and like suggest what your profile hero picture should be. We're picturing like Zuck in the background saying, you know what? You look great in those corduroys, Jose. Kind of creepy. Make this happen. I hope it's an algorithm that like picks my football jersey that I should be so Jack and I jumped in snacks now. We're happily married so we didn't complete the process. We got to the point of return. Exactly. We didn't push like, go live with this profile.

But basically we notice is if you're going to actually use this feature, the first thing you're going to experience is warnings about privacy. Facebook peppers the whole sign-up process with assurances that your data won't be compromised. Basically, Facebook's in love with privacy and letting you know they're taking things seriously. But our fun feature of this thing, you know, it's not that different than Tinder, except it knows everything about it's good matches. But there was one feature we thought was fascinating. The secret crush. Exactly. Now, as context here, keep this in mind.

Facebook will not match you. with someone you're already Facebook. Right. In general, the dating app is to meet other people you're not connected to on Facebook. Get out there. But there's one exception. Right. If you have unfinished business from sophomore year with somebody, you can do the same.

You can list them as a secret crush. And then if they happen to do the same thing and do the secret crush and you match up. You'll get connected. Boom. That's how dreams come true. And then that wedding speech has already ridden itself. By the way, this is capped. You can only do like nine secret crushes. You can't go Tom Haverford on this thing.

So we know what you're thinking. We just talked about Facebook, but Match's stock dropped 5%. That's weird because we knew Facebook was going to do this months ago. We covered this once on Market Snacks and once as Robin Hood Snacks in May. So, Jack, what's the takeaway for our buddies at Match if they already knew this was going to happen, but the stock still dropped? Instagram. Exactly. Facebook whipped out a surprise on the first date here.

Instagram. They mentioned it 12 times in the press release. Total shocker. Instagram is going to be a core feature of this dating app, and that's where everybody under 35 lives basically. But it turns out that wasn't clear when Facebook first announced that they were going to get into the dating game. So now this Instagram doozy is something that Tinder is going to have to deal with. And honestly, in the dating game these days, one of our buddies. Timmy?

Let's call him Timmy. Let's go with that. He tells us that three or four lines into any Tinder conversation, you're exchanging Instagram handles. Boom, Facebook's new move, cuts out Tinder, which is owned by match. We didn't know that was going to happen. By the way, Timmy is happily girlfriended up on a wonderful vacation. Great guy. Thanks, Timmy.

For our second story, we've got to be. Talk about Slack and the number 10 million and what the CEO just said that scared the stock. The stock fell by 14% at one point yesterday. It eventually rebounded. It ended up just 3% in the negative. Just a smidge. But can we talk about favorite slack hack? I use Slack now. You do. And my favorite Slack hack, creating your own emoji. It's super easy to create. We got a friend of the office. His name's Tristan. He spends like a good portion of his day doing this. When the CEO makes a Slack like public at Robin Hood, they get like a hundred billion emojis immediately reacted to. I don't even where that slack noise comes from, but it's like a thing. Now, worst slack hack forces you to get work done.

You can't just leave an unread email in your inbox. So true. Now, we know there's someone out there's like, yeah, there's a way to do that, but we don't know how to do it. No, we don't. First earnings report for Slack since going public in June. So this is a big deal. We thought we should pay some attention to this. And, you know, it kind of disappointed in some ways. Yeah, I mean, honestly, the revenues, the unprofitability, the user growth, that was all pretty much what investors expected. It's still very unprofitable. It's okay that it's unprofitable. It's okay that it's unprofitable. profitable because it's still in growth mode. But then the CEO said something that was alarming about the growth. Exactly. Slack has 10 million customers, not companies, but individuals who are using

Slack. Right. There's like 100,000 customers, which are the companies that sign up their whole employee workforce to use Slack. But that first 10 million, they were the early adopters. And when it comes to the adoption cycle of the product, the next 10 million are going to be a lot harder to get. Picture the early adopters. They like trying new things. They're probably better at computers than you are. They probably work in Silicon Valley or a tech. Picture your friend who, like, has a cannabis smoking all-bird shoe that was tied by a drone three years ago. Now, Robin Hood uses Slack, so we were early adopters. We worker uses Slack. We have a buddy who works there and told us. Red Antler, the branding company behind all

these firms, uses Slack. Lyft uses Slack. Target uses Slack. But those are all the low-hanging fruit. Exactly. Those are the ones that are naturally inclined to be early adopters to, like, disrupt themselves and disrupt outlook. The big question for Slack is, can they convince the Walmarts, the commerce banks, the UBSs of the world to actually do this? The law firms of the world.

Can we talk about our dads for a second? I sent my dad a picture. Great guys. Great guys. Great guys. Great guys. Great snackers. Kramer Law Office in Brattleball, Vermont.

I sent him a picture of my wedding via a text message. And what I was like, Jack, will you email that to me so I can print it out? I'm like, Dad, you already got it. Jack, Mike Martel's a legend. He sees an interesting newspaper article on the New York Rangers. He prints it out. He scans it out.

and he has someone send it. Now, Slack's assignment now is to get law firms like these ones to sign up for Slack and ditch the services they've been using for decades. A lot harder because they're not the early adopters. So Jack, what's the takeaway for our buddies over at Slack who just enjoyed their first earnings reported and trying to have some fun? Slack has to defeat Microsoft to survive and Microsoft is a sticky, sticky product. Not many people realize this, but Microsoft has a competitive product to Slack. It's called Teams. And just like Slack, it is a messaging system. Slack is a single product newcomer trying to convince companies to switch from Microsoft to Slack. But Microsoft is already embedded in all these companies.

It owns the corporate white collar workforce. It's got office. It's got Outlook. Powerpoint. Presentation this, presentation that. It's got Outlaw. It is deeply entrenched in corporate America. They've been using it for decades.

So while Slack has to convince someone to try an entirely new product, Microsoft just has to get them to flick a switch. Or Microsoft can say, you know, stick without luck. Don't fix it if it ain't broke. And if you really want to try something new, try Teams. It's like Slack, but it's more comfortable. You'll recognize things. It's a zero-sum game. I used to not understand what that means.

I think I get it now because it kind of works here. For Slack to get new customers, it has to take customers from Microsoft. By the way, fun fact here, Jack and I discovered, Teams from Microsoft already has 13 million users. That's more than Slack. For our third and final story, we've got our wounded unicorn of the day down on the ground. We work. It just slashed its valuation in half.

which is like a rough sign for the IPO. Very, very bad sign for the IPO. This is tough. Nick, you know how Lyft has performed very poorly since it's IPO? I do. It's worth one Lyft. Yeah. WeWork is performing very poorly before it's IPO.

Exactly. Now, by the way, WeWork, we're not trying to kick you while you're down. I know some people have made some like kombucha jokes because they serve it there. Chacquely, I love kombucha and we're never going to make that joke. Big fan. Big fan. It's good for the afternoon when you want a little caffeine, but like not a copy. We're kind of maybe doing it right now.

Now, the news itself is that WeWork is planning to cut it. stock price in half because it wants to perform better on IPO debt. Yeah. So the valuation of WeWork was $47 billion, which was hefty. Yeah, that's actually the biggest privately held company in America unicorn status right now. But it looks like they may cut it down to $25 billion. That is like subtracting two lifts from the valuation of WeWR. Out of a single WeWork. Now, you're probably wondering, how could something like this happen? Because cutting in half is like a big cut. It's pretty simple. Not a little haircut. I got two letters. Straight up. One letter.

in one number? What are you talking to me with? The S1. Hit me up. Tell me more. The Wii company issued it to S1 about two weeks ago. And since then, a lot of people have been diving into it, reading it, analyzing it. We know you're wondering, too. What is WeWork doing right now? They're prepping for the IPO. They're meeting with companies that may buy the stock. They're doing a roadshow. Now, the S1 is the document that tells everything about WeWork and is supposed to prepare investors to decide, should I buy this stock or not. But there have been some criticisms and they're hearing the feedback that their numbers are a little too cryptic. Yes, WeWork has not been very transparent about some very crucial metrics that you would expect from a real estate company,

and that's basically what we work is. In fact, one of the analysts wants to far as to say that we work has begun a, quote, unquote, masterful display of obfuscation. It does sound like the Harry Potter ninth book. Adam Newman in the masterful display of obfuscation. Give me that audio book. So one big time investor, the same guy who said that actually, he calculated this really crucial metro for real estate, which is the payback period. Exactly. So when you look at a single WeWork location, the question is, at what point does that one location become profitable? Yes, when they sign the lease for an office building, they're losing money. They renovate the heck out of it. And then they got to market this thing

that's more money. They spend a lot of money diving deeper into a negative profit hole, and then they start collecting rent from customers. Someone's got to put the beer taps in, and that costs money. Now, the payback period is like, how long do they need to collect rent before they finally break even on all that money they spent on this property. Now, WeWork's IPO paperwork implied that it was like roughly two years before a single location became profitable. Right. But someone else dove deeper into the S-1, more than Nick and me. They had more calculators.

They calculated that it's 13 and a half years of consistent rent from tenants before WeWork property becomes profitable. That means it takes longer for a single location to become profitable than WeWorks spin around for on planet Earth so far. So Jack. What is the takeaway for our buddies over at WeWork? Every employee at WeWork feels half as rich today as they felt yesterday. You got to keep in mind, just because the stock isn't trading doesn't mean there aren't shareholders.

Employees, venture capitalists, they own stock and options to buy stock in WeWork while it's private. The stock is private, but it has a share price. And at a valuation of $47 billion, the share price was high. And now that share price is about half as much. I feel bad for employees who own WeWork shares. The stock may have gone a bit too high as a private company. And now it's come back to reality. Jack, can you whip up the takeaways for us for the weekend?

Match group just tanked 5% because Facebook's dating feature includes Instagram. He tenders me not. He tenders me not. He tenders me not. Slack investors are nervous about the second 10 million Slack users. Slack, if you can get Jacks and my dad to use Slack, you deserve to have your stock go the other direction. Third final story, WeWork got overzealous with how much it was worth.

And now its valuation may be cut in half. Now, time for our snack fact today. First snack fact, Jack almost choked on a date before this podcast. Second snack fact, he survived. Now for our actual snack fact of the day, Jack, flying. Not the best thing for the amount. No, it's not.

It's rough. No. The thing's big. You're putting the gases like straight into the stratosphere. We're talking about like a huge thing of aluminum and a bunch of other metals. Getting it in the air and across the ocean costs a lot of burned fuel. So you're probably thinking, all right, if it's a private jet like Mr. Tom Brady's got going on. It's lighter.

It's smaller. It's more nimble. It's probably better for the environment. Wrong. Completely wrong. In fact, how wrong is that? It turns out flying by private jet is. is 10 times worse for the environment than flying commercial.

10 times worse. That's because it's just you and a couple buddies in the private jet, whereas a commercial is a whole plane full like 300 people. Doesn't matter how much LaCroix you got on board, that thing is a problem. Share your greenhouse gases. Snackers, awesome week with you. And one thing some people have asked us is how can you support the Snacks Daily Pod? You can support the pod by giving us a five-star review.

Just scroll down, drop five stars, maybe even leave a rating. We would love to hear it. Either way, we'll talk to you Monday. Can't wait. 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.