The Best One Yet - 🥶 “Netflix Please Chill” — Netflix’s master plan. Call Of Duty’s $69B pwn. Tech’s wardrobe refresh.

Episode Date: January 19, 2022

For the 7th time, Netflix is raising prices — We’re calling it a Party Tax. Last week was the biggest video game acquisition ever… until this week: Microsoft dropped $69B for Call of Duty icon Activision Blizzard. And if you’re like us, your portfolio is down — ½ of tech stocks have lost ½ their value because investors are refreshing their wardrobes.$ATVI $MSFT $NFLXGot 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. This is Jack. And this is Snacks Daily. It is Wednesday, January 19th. Stocks are dropping like they didn't just get a three-day weekend. You're supposed to be relaxed right now, Dow Jones. What's going on over there? No spot day?

Stocks fell big yesterday, but today's pod is still the best one yet. Snackers, today's pod is a T-B-O-Y. Jack, what's our first story? For our first story, don't look up. No, at your monthly streaming bill. For the sixth time ever, Netflix is raising your monthly subscription price. For our second story, last. week was the biggest video game deal in history. We reported on it. Until this. Until this week,

Microsoft just acquired Activision Blizzard for $69 billion, but it's not about call of duty. For our third and final story, if your stocks are down right now, so are ours. Okay, ours punished. Crazy Snackers, get this, half of tech stocks have lost half of their value. Half of tech stocks have lost half their value. Because stocks are like clothes and investors, they are refreshing their wardrobe. But Snackers, before we hit that wonderful mix of three stories. Such a good. Wait, Jack, one second.

What's that smell? You smell that? I think it's the Kara Chacolo Toffee-Tastic. I think Girl Scout cookie season began this week. It did. It began this week. Snackers, January through April, that is Samoa cookie season.

You can taste it in the air. So prepare to drop half a paycheck on your boss's daughter's thin mince. Because your salary equals their quota. The Girl Scout cookie business is a billion dollar a year behemoth. Okay, get this snackers. Girl Scouts, they made $800 million in cookie sales and that was back in 2019. One million scouts sold a combined $200 million of boxes of cookies. It's like a Betty Crocker meets Ford Motor Company. They're pumping these things out. The news isn't just that it's Girl Scout cookie season,

although that's great news. It is great news, Jeff. For the first time ever this year, Girl Scout cookies will be available for delivery on DoorDash. Jack, are you trying to tell me that the Girl Scout baked goods are making a platform play? Who says you can't scale calories, Mark Andreessen? So you're sitting at home Snackers, you're hungry? I was ordering a late night pad tie. And then... Then you got teased by some tag along, so you bought nine box.

But Snackers, this is so much more than a tech story. It is an adapt or die situation for the Girl Scouts. We don't have Girl Scouts sales figures from 2020 or 2021, but we're pretty sure they got hit hard by the pandemic. Yeah, huge number of sales happened when... the Girl Scouts parent or guardian pressured you in the office conference room. And with work from home, that shut down. Not only a huge sales channel for Girl Scouts, but a channel that outsourced all the labor and the sales to mom and dad.

Brilliant business pivot by the Girl Scouts. There should be a badge for gigifying the Girl Scout cookie business. In the meantime, let's eat our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something illegal out the way. The snacks are about to hear rain food. It's air candy. They don't reflect the views of the rob of her.

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 about security. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Netflix, they are raising prices again.

Think of this price height, though, as a tax on your social life. If that helps, it may make it actually worse. We're hoping that we'll help. So first of all, Jack, what's a great time to announce some bad news? Everyone knows this. The Friday afternoon news drop. Okay. No one pays attention.

What's the best time to announce bad news? Friday afternoon before a three-day weekend. Exactly, which brings Jack and I to last Friday. We were chilling. Jack was making a cocktail or a jacktail, if you will. I will. I was struggling with a cross-country ski thing where I was falling. Meanwhile, Netflix was raising prices in the U.S. and Canada by a buck 50 a month.

Okay, that brings us up to where are we now, Jack, on Netflix? $15.50 per month for the standard Netflix subscription. Really frustrating news for the boomer whose password you're using. Jack, this feels, it feels kind of like a sequel for Netflix. This is the sixth price hike from Netflix in seven years. Netflix, please chill. Become like an annual event, like the latest iPhone, which gets dropped. Right, or like the new Real Housewives of whatever city.

You're getting a new one every year. Eight episodes of The Real Housewives ago, back in 2014, Netflix was just $7.99 a month. Netflix was the price of one sandwich. It is now double that expense. Netflix is now the price of one steak. And yes, Snackers, your streaming budget is getting really big. Okay, so Jack, how much is the average American household like dropping on streaming these days?

According to our buddies at J.D. Power, 55 bucks a month for an average of four and a half subscription. Feels like subscription. Four and a half subscriptions, really? What do you go-to? We're at six over here, man. Jack's like, I don't even have that one. one so I can't watch it. I'm sorry. I need an app just to keep track of my subscriptions. And actually, if it would ping me each month and be like, do you want to continue this? Are you sure? You haven't touched peacocking ever. So Snackers, it's Friday afternoon. You know, Jack and I are getting on with a three-day weekend live. So were you. But Netflix's

stock, it rose on Friday afternoon. Because this price hike, 75 million so subscribers times a dollar in $1.50 a month times 12 months a year. That's $1.35 billion in new annual revenue. And here's why Netflix loves this sequel, because this was all part of Netflix's plan. Part one of Netflix's plan. Get all of America hooked on Netflix. Okay, Jack, checking the whiteboard. And mission accomplished. Part one was accomplished.

Part two. Raise prices. Yeah, America. You're now hooked on Netflix. Now Netflix, it's got a little pricing power. It's a different story abroad. It's still priced low abroad. Right.

Over in India, they're still in part one of this plan, which is like get everyone in India hooked. But here in the U.S., these prices are all part of Netflix's two-part plan. Yeah, spoiler alert, India. Get them hooked and raise prices. You're going to get a price hike eventually. So, Jack, what's the takeaway for our buddies over at Netflix? Netflix is charging a social tax on your life. Yeah, Snackers, other streamers, you know, like Peacock, they're going to try to do this, probably raise prices, but probably won't be as successful as Netflix. Netflix is the leader. Others are probably going to follow their movies. But unlike other streamers, Netflix is almost too culturally relevant to fail. Netflix has so many hits. You risk missing out on the conversation or even

being ostracized if you don't watch their shows. I mean, if you're not on episode four of Squid Game yet, how are you talking to people at the beginning of that awkward Zoom call? If somebody on the text chain says, who's Carol Baskin? That person's out of the text chain. Jack, I could have a three-hour conversation with you about the quality of Claire Fois acting in the crown. And like, you better be at that level. Oh, I'm at that level. He's at that level. Snackers, Netflix, they got X-Easy. extra leverage on price because they become that socially important. So what Netflix is really charging is a tax on your social life. It's a social tax because if you aren't a Netflix subscriber,

you're not really part of society. For our second story, Microsoft is suddenly making its biggest acquisition ever. By far. $69 billion for Activision Blizzard, the video game company. This isn't exactly about video games, though. That's a fair point. But, Jack, we should sprinkle on a little context here. Remember last week we were talking about Zinga getting acquired by Take 2?

The biggest video game acquisition ever. Boom. Tuesday morning, Sachinadella, CEO of Microsoft shows up with a steel suitcase full of cash. It's like I said earlier. Zingo's like the Chrysler bill. It was the biggest deal for like one second before the Empire State Building got topped off. Who's that guy on 34th Street? Who's that guy?

So Snackers, Microsoft is acquiring Activision Blizzard in the new biggest video game deal of all time. $69 billion. $69 billion with a B dollars. It is a lot of dollars. Normally, we'd say that's four lifts worth of dollars. But since this is Microsoft's biggest acquisition of all time, let's call it 2.6 LinkedIn. Activision Blizzard, though, Snackers, bizarre name,

but actually kind of a really diverse video game company. They got good, clean, family fun games, but also, you know, kill an alien with a shotgun, slime blood with laser. Yeah, you know, the classic. So they got Call and Duty. They got World of Warcraft. They got Overwatch, no violent. But they also got Candy Crush, Farm Heroes, Diamond Diaries,

stuff you'll let the kid play on the iPad. Doing the whole rating system from G to, you know, R, basically. If you hear Microsoft now, stop thinking 60-year-old Carl crunch numbers on Excel. No, no, Snackers, when you hear Microsoft, you should start thinking 16-year-old with a really big allowance and a controller in their hand. Now, Microsoft already had Xbox. It's easy to forget that sometimes.

Now they're the biggest video game company in the United States and the third biggest video game company on Earth. Okay, Microsoft people. We're talking PowerPoint Microsoft. They are now smaller than Sony in video games, but bigger than Nintendo. Yeah, 69 billion sounds like a lot of money. But Microsoft is doing post-Christmas shopping. This deals a discount. Snackers, get this, Activision Blizzard stock. Even though video games are like surging right now from the pandemic, it's actually down 30% in the last year on some controversy. Activision got sued in July by the Attorney General of the state of California over alleged sexual harassment at the company. There were reported 700 complaints. Oh, and that's not it. Apparently, there are also allegations of gender pay discrimination at Activision Blizzard, too.

Just yesterday, right before the deal got announced, the Wall Street Journal reported that 77 people have been fired or disciplined inside of the company. But one hasn't been. Yeah, shockingly, Activision CEO, Bobby Kodick, he's staying on as CEO through the transition of this deal. even though many are calling for him to step down because of these allegations. So, Jack, what's the takeaway for our buddies in the biggest video game deal ever? The Metaverse isn't a single place? The Metaverse is a plural word. Snackers, forget the Metaverse.

It's really Metaverses. Zuck called dibs on the word Metaverse by renaming Facebook to it. Even though they're like, isn't really a metaverse yet, the future is probably going to include, we're thinking many metaverses. In the press release announcing this deal, Microsoft calls. called Activision Blizzard. They're building block from Microsoft's Metaverse. Exactly, because video games are already a primitive form of the Metaverse. Video games are an alternate world. You can escape to and interact with other people without

leaving your home. That's a Metaverse, right? Sounds very Metaverse. Yeah, add in Microsoft's developments and VR goggles and you know what? You got the seeds of a whole different metaverse from Facebook's Metaverse. Facebook's working on a Metaverse. Microsoft clearly is too. Roblox. We know Roblox is as well and maybe Google too. Snackers, the Metaverse, it's not. Not the matrix. There isn't just one. Metaverse is plural. Meal.

Metaverse eye. For our third and final story, remember how, you know, text talks were dominating during the pandemic. I do. Yeah, it was great. Well, get this, nearly half of text stocks right now are down by half from their all-time highs. Okay, when Jack and I were prepping this story, it was inspired honestly because, like, we looked at our portfolios in like each, like a Bob Ross red-themed painting. Yeah. if Bob Ross turned very dark.

Jack, I like the way you put it to me earlier today. We own a bunch of stocks of innovated, albeit unprofitable growth companies. Now, if they're a tech company in some way, they tend to be listed on the old NASDAQ composite index. Right. And the NASDAQ fell another 2.6% yesterday. That's a lot. Which means it's down over 9% from the record high they set in November. Which means the NASDAQ is close to a 10% drop.

Which means we're close to the dreaded correction. Yeah. Think about tech these days, it's not as very much. volatile as they used to be. Tech, it's like less Mohawk, more gray hair. There was a time when tech company meant internet-obsessed company with an unproven business model. Yeah, okay. So it still is that, but tech is also this other thing too. Right. Tech is also Apple, Amazon, Google, Microsoft, Facebook. Right. Ipsom factor, the most profitable companies ever, they have become like fairly reliable, safer investments from the rest of tech. So big tech stocks, those five we just mentioned, they're doing fine. Apple, it's up 30% in the past.

year. Not too shabby, but the rest of tech without the consistently profitable business models, they're the ones whose stocks are getting beaten down and broken. Yeah. Like a fax machine in office space. Okay, get this, Snackers. Over 40% of the stocks in Nasdaq's index are down over 50% from their highest point. There are over a thousand stocks in the NASDAQ index and we repeat, nearly half of them are down by more than half. Now, it's not the big tech, we should mention. It's not Apple. Apple, Amazon, Google, Microsoft, or Facebook. They're down just a tad this year. But it is the medium and small tech.

Peloton, Etsy, Match Group, Rivian, PayPal. Those are just a handful of the companies that are losing badly lately. Snackers of that, didn't shock it. Get this since at least 1999, which was around the dot-com bubble. There have never been so many stocks at their 52-week lows as right now today. According to the Wall Street Journal. Brutal. Brutal.

So, Jack, what is the takeaway for? for all of our portfolios. Stocks are like clothes, and investors are refreshing their wardrobes right now. Snackers, the past few years, there was a loose Fed policy that at interest rates close to zero to encourage investors. And when the temperature is 0%, growth stocks feel pretty comfy. They're like the thing. They feel pretty good. But now the Fed is worried about inflation, so higher interest rates are probably coming soon.

You know what's not as comfortable when interest rates go high? Talk to me, Jack. Those growth stocks we just told you about. Yeah, the more reliably profitable. less volatile stocks they are gaining while the wild growth ones are dropping. Think of it like your spring wardrobe rotation. Exactly. Warmer weather, you put the ski jacket back in storage and you whip out the sandals in the short shorts. Right now, investors are putting away their growth stocks that they've been loving during the pandemic and bringing back the lower risk, more dependable stocks for higher

interest rate season. Jack, they're even accessorizing by buying some bonds. With interest rate hikes coming, investors are refreshing their wardrobes. They're rotating out the riskier stocks and rotating in the old dependables. Jack, can you whip up the takeaways for our buddy Joe Exotic, if you know, you know. Netflix has upped their prices for the seventh time. Yeah, this isn't a price upbing. This is a social tax because Netflix is required for you to be part of society, people. For our second story, by acquiring Activision Blizzard, Microsoft is now a major player in the Metaverse.

Okay, so Jack, I just control F this pod. And said Metaverse 17 times. 17 times. Perfect because Metaverse is plural. And for our third and final story, tech stocks are going through a C-Seph this. seasonal rotation. Yeah, check your closet. Risk your growth is out. All dependables are in. Now, time for our snack fact of the day. This one sent in by Andrew D. Benizia from lovely Cedar Rapids, Iowa. Beagles, the great dog made famous by the children's TV show Wishbone.

Oh, I was thinking, Shiloh, you're right, you're right, wishbone. There you go. Now, that white tail on the Beagles, that stands out. It looks like a white flag because it's supposed to be a white flag. Most Beagles, historically, were used for hunting. And the Those hunting beagles had white-tipped tails. Yeah, this white tip was like bred into beagles so that they would be visible when they had to stick their noses in the ground during a hunt. Kind of wild that humans bred animals for specific purpose. Also, beagle's adorable, but apparently like a weaponized object by mankind.

Nick, we actually 23 in Mead River. She has more beagle than anything else. No white-tip-tail, but, you know, she was never really into hunting. I never got that vibe. No. She's mostly vegetarian. Snackers, you look fantastic today. And remember to thank whoever is subsidizing your Netflix account for continuing to fight the good fight.

Tuck, thank you. And remember to ask your friends, H-Y-H-Y-S-D. Have you had your snacks down? If you know, you know. Nick and I'll see you tomorrow. Can't wait. And before we go, congratulations to snacker Havertanning, who just got into pilot school over in lovely old in Norway. Congratulations to Veronica Angola, who just got a new job at a startup in Bogota, Columbia.

And Greg Vasquez, congrats of getting promoted over in Boston, just outside Boston. Big congrats to Marcy Roberts, who's starting a new job at Apple. And another big tech, big congrats to O'Dalas, who just got a new job over at Microsoft. Get O'Dales a controller. And happy birthday to Snacker Zach Sims over in Atlanta. And Hunter in Burlington. And Nathan, you, happy birthday down in Los Angeles. Happy birthday to Kieran Kigotron in New York City.

Great name. And to anyone else celebrating today, make it a T-Ball. Celebrate the win. This is Jack. I own stock of Amazon, Netflix, and Roblox. Nick own stock of Apple, and we both own stock of Peloton. Unless Nick sold and didn't tell me. No, I didn't tell you.

Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors who are associated persons of Robin Hood Financial LLC and do not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates. They are meant for informational purposes only and are not a recommendation to buy or sell any security, cryptocurrency, or investment strategy in any account. This is not an offer or sale of a security, not a research report, and is not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinood Markets Inc., Robinto Financial LLC, or any of their subsidiaries or affiliates.

All investments involve risk, including loss of principle and past performance, does not guarantee future results. Robin Hood Financial LLC, member FINRA, SIPC. Yeah, $69 billion sounds like a... P... B... wine oh sir oh 609 baby there's a lot of money