The Best One Yet - Netflix’s 130 seasons of non-english shows, Facebook’s Libra crypto drama, and GM’s 1-month strike is ending

Episode Date: October 17, 2019

Even though everyone’s launching a streaming service, Netflix surged after its latest earnings report. Facebook’s global cryptocurrency project, Libra, keeps losing its corporate backers, so we’re looking at why. And General Motors may have finally ended its biggest strike since 1970, but the numbers show what investors really think about it.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 is Thursday, October 17. Oh, happy day. Snackers, we got the best one yet. I had no idea where you're going that one. First story, we're hitting.

You ready for it? I like it. Why don't we just start fast here? Netflix has a lot of fresh streaming competition. HBO, Disney, NBC, I could keep going. But Netflix wants to tell you the real competition is television. We're talking cable. The stock is up 8% will get deeper on it.

Second story, General Motors' one month strike with the United Auto Workers. Know it well. It's over. Done. $2 billion was the price tag now. A lot of picket signs made. And shockingly, investors reacted perfectly rationally to that strike. Totally normally, the numbers say it all. Third and final story, Facebook's Libra cryptocurrency has been losing friends all fall. We're looking at why everyone's RSVPing no to the founding team. We haven't covered that one since the announcement. It's time.

Each day, though, it kind of develops a little further. Now Snackers, before we jump into all that. Happy 25th to friends. Happy 25th. Nick and I are really Seinfeld. Really more so. My wife's trying to get me into friends. Monica's nice. I mean, I'm dabbling. Chandler seems like a good guy. Joey's fun.

I'm more of a Chandler. No, I'm a Chandler. You might be a Joey. Perfect timing for Jennifer Aniston to get off the couch and actually get on Instagram. Apparently, she claims she hasn't had an Instagram handle the entire time. We suspect she might have had like a blind account. I'm sure she's going out, you know, she's at dinner with you. She's like, I borrow your phone.

And five minutes later, she's scrolling away on that thing. So a couple days ago, she gets, uh, she gets an Instagram account. and she immediately gets the blue check of verification. Pr-R firm helps with that. Guess what happens 24 hours later? 9.4 million humans. She goes from zero followers to 9.4 million followers in 24 hours. If we could verify this was the fastest ever, it would be a snack fact.

We promoted it in the intro. Can you imagine the notifications tab while all those people are following? Incredible to keep up. Now, speaking of Instagram. I know what you're thinking here. Snackers, yesterday was awesome. We asked you to take a screenshot of you listening to snacks on. your podcast player. You did, and you posted it to your Instagram story. It was a beautiful thing.

We loved following it today. Hundreds of you did this, and I swear the reach was gigantic. Snackers. We love you following us at Robin Hood Snacks. And thank you for helping us grow, because a lot of people discovered us through your stories yesterday. Thank you. Let's hit our three stories. We spoke to the lawyers of snacks about the hair 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 security. Nope. It's not a research report or investment advice.

Not an offer or sale of a security. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Netflix's earnings report, it wasn't perfect, but the stock still jumped 8%. Nick, get your calendar out. You ready?

Jack, get your Netflix out. Okay, mark your calendar because Apple TV Plus, a new streamer, comes out November first. You're going to have a busy November because Disney Plus, their streaming network, comes out in November, too. Which includes every Disney thing ever made and a bunch of others. Aside from November, though, you've already got AT&T's HBO Max, which comes out in April. And NBC's Peacock, which also comes out in April. Bold name. So that's a lot of streaming competition coming to Netflix.

But we're here to talk about Netflix. 158 million is Netflix Nation globally. That is the number of streamers who are Netflixing, questionably chilling. and just watching. Now, context, yesterday was the third quarter earnings report and the stock rose big, about 8%. But very big difference between the second quarter earnings report for Netflix, which was in July. And the third quarter earnings report. Right. In July, the stock dropped by 10%. So let's compare the third quarter growth numbers with the second quarter growth numbers. I think whenever you say compare, you have to say contrast to. I think it's like a high school rule. So in the third quarter,

Netflix added 6.8 million paying accounts. In the second quarter, the one where it really suffered, it added a mere three million paying accounts. By the way, those paying accounts, the great, great majority of growth is coming internationally because the U.S. is like totally saturated. Now, we know what you're wondering right now, what is driving this sudden growth for Netflix? And the answer is two keywords. New shows. New shows. I know you're going to finish that. That was good. That was good. Stranger Things Season 3 came out last quarter and is the most watched season yet of any Netflix show. Sixty four million households in the first four weeks. Pretty impressive. That's a lot of households. That's not people bumming

Netflix accounts. I love this unit of measurement, by the way. And then 32 million households watched another show called Unbelievable in the first four weeks. We know you're thinking we're not going to do the believable jokes on this one. Now, those new shows, those are driving people to subscribe to Netflix. But the other key for Netflix is not just the new shows in the U.S. It's the non-English language shows outside the U.S. that are performing better than they expected to. Yeah. Last quarter, of those 6.8 million new accounts, six million were international. So you better have some non-English material. Great example for those trying to up their Spanish game, La Casa di Papel, which of course is Spanish for the House of Paper.

Of course. Forty-four million households enjoyed watching it. That's a heist movie. Right. It's a house of paper. Right. Paper meaning money. Basically, it's about, you know, printing billions of dollars of euros.

So that was a big hit in the Spanish-speaking world. Kind of the same plot as like Oceans 15. Yeah. And then another hit was called The Naked Director, which in Japanese was called The Naked Director. Which in Japanese was called The Naked Director. Best launch ever in Japan. It's about a porn director, a.k.a. a naked director. Incredibly literal name. We love how they just got to the point on that one.

Netflix is adding next year for 2020, 130 seasons of non-English content. So, Jack, what's the takeaway for our buddies over at Netflix? How big can Netflix get? That depends what you are benchmarking Netflix, too. Benchmarking, benchmarking. It sounds like two words, really one key word. It's a standard of performance that you compare yourself to. Right.

So if you're like Beyonce and you want to know how good you're doing, you can compare yourself to like Michael Jackson or Madonna or benchmark yourself to like six of the spice girls. Here's the thing. Netflix benchmarks itself not to the streaming competitors like Hulu or Disney Plus. It benchmarks itself to TV. And that's critical because if you're just comparing yourself or benchmarking yourself to your competition or just other streamers,

it seems like a much smaller market. You're just each fighting over just a few little other streamer competition. But Netflix thinks to itself, the whole TV world is hours to grow into. Nick, here's a shocking note about how much room Netflix has to grow. I'm taking notes. If you say TV has watched 100 billion hours in America, it's a big number. Netflix only gets 10% of that.

So there's a lot of room for Netflix to grow into the TV viewing space. So if Netflix benchmarks itself to TV instead of competition, the field of opportunity is a lot bigger. But if you compare it to Hulu, you might think its growth is just about done. For our second story, General Motors just reached a deal, a tentative deal, with the United Auto Workers Union. Nick, this story might restore your faith in markets. I know what you're thinking before we jump at this. What? T-shirts?

Great. T-shirts. Union members have the best T-shirts with the best logos. Snackers, if you have a United Auto Workers T-shirt somewhere in your house, take a picture and send it to us. Trick question, because you should be wearing it so it's harder to take a photo. All right, let's give some context to the General Motors strike. It literally began like a month ago. It started September 16th, and since then, 48,000 UAW members who work at GM have been picketing and not work.

Sounds like a big number, also a big number. General Motors lost $2 billion in value from this situation. Yeah, it's cars that weren't made, weren't produced, weren't delivered, weren't bought by customers. But the United Auto Workers Union, they didn't get away without paying some money, too. They lost some money, too. They actually had an $800 million strike and defense fund. That's what it's named. we're ready for action. It's like a rainy day fund, but for when you go on strike. Exactly. And they've

actually been paying their workers $250 a week, like now up to $275. Not much, but enough to like feed the family during the strike. This was the longest strike for General Motors since way back in 1970. So naturally, the longest strike in 50 years, you bring in the big guns. Right. First, you got to imagine there may be some U-A, there may be some General Motors workers who maybe had been in that 1970 strike who are sharing some intel here. Well, if they were 20 in 1970, they could be 70 now. So maybe. They would be older.

It's a stretch. It would be intense. But anyway, GM Brown and the Big Guns this weekend, Mary Barra, who is the CEO of General Motors, met with UAW leadership, and they announced a deal yesterday. Now, we don't know all the exact details of the deal, but we do know from people sharing some information what it's likely to include. First of all, more money for the workers. Pretty straightforward. Raises and bonuses.

There you go. Also, GM is promising to invest. at least $7 billion in factories. Right. Because factories need human workers, and so that's good for the union. Which leads to the next thing that GM would then be hiring thousands of people to work in more of those factories. Right.

And also, this is critical. There is a path to full-time worker status for all the temporary workers at GM who are being treated like second-class workers. Not that fair. Now, the rest of the deal is going to get passed off to union leaders. We've got to approve the thing. And then you've got 48,000 union members who got to sign off to. And they actually might have to vote on this thing.

So, Jack, what's the takeaway for our buddies over at GM? GM stock price during this strike shows that markets are rational. All right, so we're going to jump into some numbers here, but this is something we thought was fascinating about the situation with GM. You do a little math, but it's going to be easy. Okay. So how much money did GM lose from lost business here? The investment banks estimate that it lost $2 billion because of this strike. All right.

Now, how much did the stock of General Motors move from the beginning of the strike till the end? 5%. It dropped by 5%. So how much is that decline in the stock worth in dollars? Well, glad you asked, Nick, General Motors is worth $52 billion. That's the total value of all of its stock. Impressive. And that 5% is worth about $2.5 billion of stock value drop.

Okay, so here are the two numbers that are so important, and they're very, very similar. The amount of profit that they lost is $2 billion. Right. And the amount of stock value they lost is a little bit over $2 billion. It shows that investors were reaffirmed. reacting rationally to what happened with General Motors. They punished the stock by almost the perfect amount, the amount of profits that it lost. And if you're an investor, this points out to you that markets, they go up and down.

It can be kind of crazy. It can seem totally arbitrary and insane. It can feel completely random what a stock is doing. But you see with General Motors that markets reacted almost perfectly rationally. For our third final story, what is happening with Facebook's Libra? Not good things. It's getting bailed out. Or it's getting bailed on.

It's getting bailed on. It's getting ditched. It was expecting 28 people at its party. A lot of RSVP knows. Only 21 came. I came down with a little bit of a cough. Those seven no-shows, let's just say not refundable. Not feeling great today.

I don't think I can come to the party. By the way, Libra is the name of Facebook's new cryptocurrency project. We know what you're thinking? Zuck's birthday? It's in May. Taurus. He's not a Libra. No.

It's so confusing. He's a Torres. Well, Libra is a Bitcoin-like payment system. And it basically gives anyone who's got a Facebook account a wallet, no matter what country there. Think Venmo, but globally acceptable. it, and it's not dollars, it's Libra, which is a crypto that you can convert into your own currency. Which also means it could potentially change the world because this thing is international. Yeah, this would eliminate, like, transaction fees globally.

Bring your passport if you're going to use this thing. It'd be the universal language of money. Now, Libra itself doesn't just happen offline. They also have to have some online events with some crackers and cheese. Yeah, their first meeting was Monday, this past Monday, in Geneva, Switzerland. Pretty much a Jedi Council situation of the 2018. corporate backers who are going to govern this global cryptocurrency. Right. They're like, PayPal the wise.

But it wasn't 28. It was actually 21. We'll get to that in a second. I know. I'm eager to get to it. I'm eager to get to it. But there are corporate companies like Lyft, Uber, and Dresen Horwitz, a venture capital firm. And they all make up this unique founding council of 28 that would be like organizing Libra. It was a diverse group. And Mark Zuckerberg said in June, everyone has to play a role in this project. Well, that was, perfectly spoken because it turns out a lot of these members decided they don't want to play this role anymore. The Exodus started two Fridays ago when PayPal, the wise, dropped out and said, I'm not coming, suck. I'm not coming. I'm done with Libra. It was a domino effect because then

I think it burned its Libra card. eBay dropped out, Stripe dropped out, Visa dropped out, MasterCard dropped out, and then Mercado Pago dropped out. I don't know that last one. Not as much. A lot of American international companies. Now this is a key. moment for Libra. There are officially no finance companies among the founding members of Libra. Except a couple crypto companies. Yeah. There's a couple of crypto companies. But the reasons why these companies have jumped out, there are a few different ones, including bipartisan hate. Exactly. Democrats, Republicans, the administration, they're all just not that into Facebook and not into it creating its own currency. And if your Visa or MasterCard, you're getting close and close to this currency

as one of the founding members, you start realizing this could be replacing you. Yeah, Libra, if people can pay each other through their Facebook. Facebook apps, are they going to use a credit card as much? Maybe not. Now, Facebook and its Libra team didn't just take this lightly. They had something to say about this. They will have 100 corporate rackers when they launch. However, they're backing away from their promise to launch in 2020, probably going to take longer than that. This is literally like that one kid in high school who hosted a party at his parents' place. It was like, there's no one here now, but there are going to be a lot of people here later. You're going to want to like take a spot on the

couch right now. Have you seen how many Red Solo Cups I have? So Jack, What's the takeaway for our buddies over Facebook? Facebook is both the biggest asset and the biggest liability of Libra. Okay, here's why Facebook's an asset. The user base, plain and simple, that's it, boom. I think it's two and a half billion human beings have Facebook. I think at this point we just say half the world essentially. Now, the biggest liability is the immense distrust.

Right. Among regulators, politicians, users who just are not trusting the Facebook brand because of all the privacy issues in the last year. For a global cryptocurrency to succeed across borders, You need both a huge user base and strong trust. Total key turning situation. Need to turn both the trust and the users. Facebook's got one of them right now, but doesn't have the other.

And that's a problem for Libra. Jack, can you whip up the take-oist force? Netflix got back into growth mode in the third quarter, adding almost 7 million paid subscribers. And it thinks it can take over TV land. And by TV land, we mean the benchmark is TV. The General Motors Worker Strike is ending, but it costs GM $2 billion in problems. And Wall Street reacted perfectly rational. when you look at the numbers.

Facebook's Libra currency has lost a bunch of corporate backers. Facebook is Libra's biggest asset, and it's the biggest liability. Snackers, time for our snack fact of the day. We've got to talk about Amazon. Trivia. I was about to say, what's the second biggest private employer? I thought you're going to do that. Amazon has over 600,000 U.S. work.

Jack, is that the second biggest private employer in the U.S.? Well, it is so committed to saving money any way it can. It's doing it in a really creative way. Okay, so get this. employees who have cancer can now get all the travel and hotel costs covered if they specifically go to City of Hope Hospital in Los Angeles. That is how Amazon is going to save money. Because like the Seattle hospital is more expensive. They did competitive search.

They found the best care. They got this crazy price. It is the Amazon way. That is a commitment to Frugal. One of the core Amazon principles. Snackers, that was a pleasure. You guys looked fantastic. Thank you for snacking with us.

We'll be back tomorrow, which is Friday. Let's do it tomorrow. This is Jack. I own stock of Amazon. 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, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, 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. not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA SIPC.