The Best One Yet - 😘 “Netflix just got asked to chill” — Netflix’s ad-free moment. Ford’s anti-treat-yo-self strategy. Uber surges 38%.

Episode Date: March 20, 2020

Even though ride-hailing has plummeted in the corona-conomy, Uber’s CEO announced the company has $10B of cash, food delivery, and some side hustle ideas. Media consumption is surging while you work from home, and Netflix’s business model may put it above its media rivals. Ford’s touching its $13B loan as part of an anti-treat-yo-self plan, but that’s more of a problem for its bank.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 Friday, March 20th. Nick, yesterday was kind of a sleeper compared to the past two weeks. Awkwardly, kind of normal on Wall Street. No trillion dollar announcement this, no global pandemic escalation, that. No, circuit breakers.

No, the Dow actually rose 100 points on a total sleeper of a day. We're used to see in four digits. We didn't know what to do with three digits. I'll tell you, I appreciated the relative calm of yesterday. and we're still bringing you the best one yet like we do every day. It's actually a T-boy today. We confirmed it. It's a T-boy.

What do we got? First story. Uber just updated its Tinder profile. To show off to investors, it's surprisingly deep pockets. Snackers, its profile opens up with a picture in a bikini, a picture on the beach, a picture in a sports uniform, a picture of a puppy, and a picture of its bank account. Well, when you got $10 billion in the bank account, you want to show that off. The stock surged 38%.

Snack, second story. Our second story. many of you are working from home right now and you're probably multitasking, let's be honest. We're talking downward dog mid-conference call and then a little Netflix while working. Snackers, Netflix is so popular right now. It's literally breaking the internet. Europe actually asked the CEO of Netflix to crank down the video quality on us. Third and final story, anybody want to spend $50,000 on like another vehicle right now? Probably not. Detroit is freaking out, man.

Keep your composure, Detroit. That's why Ford Motor Company announced a bunch of anti-duty. treat yourself moves yesterday. Yeah, it's kind of the opposite of everything we talked about yesterday with Starbucks. Now, Snackers, in the past week, you probably received a lot of unsolicited advice about how to stay clean, so we're going to give you one more. Yeah, in case you've been told to hand wash, someone then comes by and says, oh, you should be hand shower. Nick, I've wiped my phone down with a little like 90% alcohol. I'm pretty sure it's BAC is like 1.8. Snackers, I caught Jack trying to dip his toenails in bleach yesterday. Now, hand washing right now. And

now is both an art and a science. And if it comes to being an art and a science, it turns out the World Health Organization is basically handwashings Leonardo da Vinci. Now the World Health Organization, it's kind of responsible for the whole world's hygiene right now. So they've given an order. It's like the five commandments for the whole world on how to prevent the spread of coronavirus. Boom. Number one, hand washing. You got to wash them so often. You're going to be judging yourself. Number two, if you cough or sneeze, do it in your elbow. Number three, your face looks nice, don't touch it. Number four, stay three feet apart from everybody, no closer. I'm pretty sure I heard someone say stay a quarter mile apart, but whatever. And then number five, feel sick, stay at home,

don't talk to anyone for basically a year. Now let's go back to number one, keep your hands washed all the time. At Snacks Daily, we took a shot at showing you what that looks like. Right, because technically you're supposed to wash your hands for 20 seconds. Turns out our rap disclosure that you're about to hear in 30 seconds, it's 30 seconds long, good timing. So Nick, uh, myself and Rebecca, the third snacker. We showed how it's done on Robin Hood Snacks, Twitter, and Instagram account. You should check it out and probably try it out right now with this disclosure that's about to hit you. Fellow snacker Luke Prostrope, he's from St. Peter's Missouri. He came up with the idea, tweeted us, wash your hands to the Snacks jingle. Snackers, wash your hands to the snacks jingle.

It's a perfect amount of time. Hit us up on Instagram. Hit us up on Twitter show it's how it's done. Stay clean and 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. About the hair ain't food is 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 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 Fenra slash SIPC For our first story Jack

Uber for Jack Uber for Jack Uber stock Just searched 38% because the CEO basically created a dreamy Tinder profile for the company. Snaggers, every time Nick picks me up in the morning to drive to work, he goes, Uber for Jack gets me every single time. It also never gets old.

Meanwhile, investors are looking at Uber. They're like those old cartoon wolves that are like eyes popping out, tongue hits the floor. The eyes are hearts that are bursting in and out of the eyeball seconds. Bazooka, Bazooka. It actually gets insane. Darukosa Shahi is the CEO of Uber, and he announced yesterday he wanted to talk to reporters to set some things straight. Right. You know, he's a nice guy. He wanted to be humble. So we started out talking about the bad news for Uber lately. Yeah, the sad truth is to an Uber rider,

the backseat of an Uber cab is the last place you want to be. It's like threat level midnight red danger zone if you're worried about coronavirus. It's basically a petri dish, which is why Ubering is down 70% in some markets in just the last few weeks, basically Seattle. Yeah, you got UberX, you got Uber Black, Uber XL. There should be an option for Uber bleach. You gotta get that on the register right now, Dara. We're telling you, you got to make this happen. Then Dara spoke about a sad truth, which is that their hometown of San Francisco, Uber's basically banned. Yeah, you got 7 million people in the Bay Area. They're not allowed out unless they're doing essential travel. But then Dara's like, okay, reporters, you're still with me? You still with me?

I got some good news to tell you about. Uber's got cash. Uber's got food and Uber's got some side hustles going on. Get this. Uber apparently has $10 billion of cash sitting in their various accounts that is unrestricted cash. Those are Dars word. Unrestricted just sounds like cash that wants to have a great time. That should have been on our bachelor party. Then Uber's like, even if things get really bad, let me tell you, we have simulated a worst case scenario for Uber's business. Oh my God. And we would still be fine. They got the entire finance team working on these models. Turns out if riots fall by 80%, the company will actually be okay this year. Yeah, Uber would still have $4 billion of cash at the end of the year, plus a $2 billion credit line with the bank.

in that horrible worst-case scenario that Nick just mentioned. Oh, and by the way, Uber Eats kind of live in its best life right now while you're working from home and not cooking stuff. Yeah, for obvious reasons, people want food delivered instead of cooking or going out. Oh, and also, by the way, Dara mentioned that he's been cooking up a few side hustle ideas for the company. Get medications delivered by Uber? Get ventilators delivered by Uber? So, Jack, what's the takeaway for our buddies over at Uber? Companies with big fixed costs, those are the ones in most trouble in this corona economy.

Snackers fixed costs. are the constant cost, the barely changing costs, the have to pay no matter what cost that a business faces. These are the costs that you've like set to auto pay on your credit card. You know what I mean? Exactly. And the two biggest ones, rent and payroll, Bicep 1, Bicep 2. Uber is a tech company. So it does have corporate offices in San Francisco where it has to pay rent. And it does have employees in those offices that it needs to pay. But its storefront is basically the act. And its workers are really part-time gig independent contractors. On the other hand, you've got companies like the Olive Garden, which have huge rent costs

for every single one of their locations. And then you have airlines, which have giant fleets of airplanes that you need to make like airplane payments for, just like car payments. Plus, you got enormous flight attendant employee costs that you got to pay. Uber doesn't own the cars that are driving you, so Uber's costs, they're mainly like variable, their marginal costs. Uber only pays the drivers if rides actually happen. It's a perfect example of why companies with low fixed costs or having an advantage in the corona economy. And Uber has low fixed costs. For our second story, Ford just announced it tapping into the old $13 billion emergency loan. You got to have one of those. And that's a big problem for the banks. Oh, yeah. By the way, Ford's

ticker symbol, talk about some prime time real estate. They own F as in Ford. Their stock is F. Yeah, it's just F. It's just F. It's just F. On a report card, it's not good. As a ticker symbol, it's pretty epic. It's like Cher or Giselle. Run with it, Ford. Congratulations. Congratulations. But if we could rethink of another ticker symbol, H-N-R-Y, Henry, for Henry Ford, great one. How about 4x4? Can you use numbers in your ticker? I don't think you can use numbers. I love that one. Assembly line, just shorten that into assemble like a millennial startup. Asm-B-L. How about T-U-F-F-F, Tuff? You know the ads we're talking about Snackers. Bill Ford. Ford.

Now, remember yesterday, Snackers, it was a while ago. Starbucks made a $2 billion, treat-y-self move buying back its stock. Yeah, Ford's announcement yesterday was the complete opposite of that. Yep, with the economy basically shutting down, people aren't buying pickup trucks kind of like they used to. So Ford is so desperate to sell some cars off the showcase lot that new car buyers right now are going to get up to six months with no payments on the car. No joke. Hey, Oprah, we know you're listening to Snacks Daily. Buy up all the Ford trucks now and then you can give them away in the fall. It makes too much sense. Now, to save money, Ford is also suspending its corporate.

dividend. It set $2.4 billion back to shareholders last year in cash money dividends, not doing that right now. Now, Ford has gone work from home, pretty much, in its factories, which are like scattered all across the country. Yeah, it is shut down plants until March 30th, but that could go even longer than March 30th. Yeah, pretty sure that's probably going to go longer than March 30th. Also, you can't really assemble a carburetor at home, so car production's getting shut down. Hey, Billy, let's FaceTime so we can work on this crank shaft monkey wrench. together. Nick's not a car guy, everybody. No, I only know two parts. But even though it's not going to be producing cars, Ford will still have huge fixed costs like labor and overhead. So it's borrowed

$13 billion with a B dollars yesterday in cash from basically almost 40 billion banks. Yeah, that's typically how it works. A bunch of banks pool together money and offer it to like one corporation. And then all those banks get to do like other banking stuff with Ford. Other banking stuff. Very fantastic. Now, the money, it's been available, but it's basically been unused by Ford up until now. Yeah, this is like the Banana Republic credit card that's like lodged deep back in your wallet and you forgot it was even there. Yeah, you got it in college and you're like, oh, I got a credit line here. Let's use this thing. But this part's important. It's a backup credit line for Ford Motor Company. It's pretty much got a stamp at the top that says only to be used in cases of emergency.

You got to punch through a thing, a glass to get to this thing and then press a life alert if you want to access it. I'll tell you though, Nick, right now is an emergency. for Ford, so it withdrew all its $13 billion. So, Jack, what's the takeaway for our buddies over at Ford? Ford's banks are about to get seriously squeezed. Snackers, most Fortune 500 companies have huge backup credit lines like this with a bunch of big banks. And for the past like 10 years, as business has been good, all those credit lines have

been mostly unused. But now that all these companies are tapping their emergency cash, the banks have to honor it because they gave out these credit lines. Snackers, this is a big reason why the federal resolution. Reserve Bank announced $1.5 trillion in loans will be made available to banks. Right. Bank of America's inbox is like getting stuffed with nonstop requests from companies saying, hey, remember that credit line? Kind of want to use that credit card right now. And it's not just companies. Like you and me, lots of regular Americans are probably

maxing out their credit cards right now as they're not getting paychecks. The Fed's $1.5 trillion emergency loan, that was for the banks to help handle this huge spike in demand. For our third and final story, Jack, grab a couch. Netflix just got ass to chill. But investors are just glad Netflix doesn't do ads. Snackers, while you're sitting there, lounging there, lie in there, your next episode of the Crown could be a little slower than usual. Or if you're Nick watching Goop Labs because he's obsessed with Goop Labs.

Not going to complain. Gwyneth Paltrow's psychedelic mushroom scene might be in low definition, not high definition. But do not blame Gwyneth. She's an angel. Blame Netflix, also thank Netflix, and kind of blame yourself because you're probably binging something right now. That's because Netflix is in a moment where it is a legendary work from home stock benefiting from your new lifestyle. Yeah, as we're all dialed into that meeting remotely, we're also streaming The Bachelor, let's be honest with ourselves.

And that puts a lot of strain on internet bandwidth, worldwide, household wide, everywhere wide. Honey, could you turn off the Wi-Fi on your phone so I could do this podcast? We literally have that situation right now. My attachment block. So your people, Union is facing a crisis of internet bandwidth, and they literally are asking Netflix to slow down Netflix so the internet doesn't break. No joke, the European commissioners literally called CEO Reid Hastings and we're like, hey, PR, this is the European Union. Get on the phone now. Snackers, you are binging so much video content. It's literally causing an internet traffic jam. Here's what Jack and I find fascinating right now. While media consumption is surging, not all media

companies are created equal. Facebook is a media company and it has announced that its bandwidth is being pushed to the limits because everyone is scrolling Instagram looking at how many jokes can be made about social distancing. There are only so many memes apparently there's no limit. But Google, Snapchat, NBC, New York Times, they're all being aggressively consumed. Work from home right now. But all those media companies, Nick just mentioned, have one major difference from Netflix. Those media companies are monetized on ads. Netflix is monetized through a $14 a month subscription. And those are the two ways you make money as a media company.

Ads or subscriptions. Netflix doesn't do ads. Just subscriptions. So, Jack, what's the takeaway for our buddies over at Netflix? You can be in the same business, but not have the same business model. Snackers, if we enter a recession, consumers are not going to be buying stuff. Right, you're not going to be splurging on three direct-to-consumer keto juice subscription clubs. And if you're not buying, then companies aren't going to be spending to advertise those subscription clubs.

We just talked about this. struggles Ford Motor Company is facing. So true. Automotive happens to be the top advertising industry, but we expect ad spending by car companies is going to go down. Meanwhile, billboards, they're basically worthless right now if you're not driving around it on the roads. The only company that should be advertising more right now is Peloton because there's kind of a moment and they better seize this opportunity. In the short term, all media companies seem to be benefiting from like self-quarantining on the couch. But in the long term, Netflix may have the more reliable business, model because it does subscriptions. It doesn't do ads. Jack and you'll whip up the takeaways for us over

there. Uber just updated investors that it's got $10 billion of cash. That's enough to get through the worst case scenario. That update to its Tinder profile was worth a 38% stock jump yesterday. Second story, Ford Motor Company is anti-treat yourself. It's tapping into its $13 billion credit line. It's got a disadvantage because of its big fixed costs. Third and final story, Netflix is so popular in the Corona economy that it's nearly breaking the internet. And Netflix's non-reliance on ads is an advantage compared to the rest of media. Now time for our snack fact of the day. This one, a second snack fact sent in from a hardcore snacker, Amelia Garland. Correction, I think this is her third snack fact. Longtime listener, third time call-in. She's from Westport, Connecticut, which do not

confuse with Eastport, Connecticut. No. You'll get beat if you do. If you end up at Eastport, make two lefts and go all the way back to Westport. Now, back in 1665, the city of London was being ravaged by the plate. You got a quarter of the population sadly perished in just those few years. But in nearby Cambridge University, Isaac Newton, not Sir Isaac Newton yet. No, no, no. He was a lowly sophomore, like living in a dorm room. He was like, oh, man, I don't want to get sent home.

Then I have to just play with apples. And Nick, while Isaac Newton was quarantined at home, his goal wasn't to only eat meat two out of three meals per day. No, he was a reducetarian, but he also decided to develop calculus. And the theory of gravity. Not too shabby for quarantine goals. Again, we need your quarantine goal, Snackers. Tweet us at Robin Hood Snacks. Now, Snackers, if you bump into anybody who's like, stir crazy and trying to find some good information, it happens. Tell them six letters. H-Y-H-Y-S-D. Have you had your snacks daily? We love snacking with you. We'll talk to you Monday. 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. This is Jack. I own options of Peloton stock.