The Best One Yet - 🧑‍ 🚀 “No mooch for you” — The G7 ending tax havens. Marriott Vacations’ boomers. Biogen’s birthday cake.

Episode Date: June 8, 2021

The G7 nations are ending the epic corporate tax loopholes, but there’s a finance yin to every business yang. Marriott Vacations (different company from Marriott Hotels) has become a pure play Boomer stock. And Biogen stock surged 40% on FDA approval of a drug to treat Alzheimers.$VAC $MAR $BIIB Want 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 Tuesday, T-Point Tuesday, June 8th. To quote Celinda, near, far, wherever you are, this pod will go on. Yes. Jack, I'm coming to you live from Manhattan. Are you joining me tomorrow?

You feel about 3,000 miles closer. Yes, I'll be in the Big Apple tomorrow. Yeah, I brought you an extra takeaway, but it's stuck on the L train right now. Snackers, this is the best one, yeah. It is also our best pod ever. Jack, first story, what are we got? The greatest corporate loophole in human history is getting closed. End of the mooch economy tax haven double Irish Dutch sandwich it rolls off the tongue.

Bad news for tax avoiders. For our second story, Marriott Vacations is the little brother of Marriott hotels. But Marriott Vacation Stock, it's beating up its older hotel sister we noticed. Third and final story. The FDA just approved the first major Alzheimer's drug in 20 years. Very exciting news for families and friends of an Alzheimer's sufferer, of which I am one. What about you? I am two.

Wow. And Biogen stock, it's exciting. for them too. Their stock rose 40%. We think it looks like a birthday cake. It's a birthday cake stock situation. But Snackers, before we hit those three fantastic stories, such a good mix. Retirement, it's not the end. It's a new beginner. Jack, you burn the Zoom login credentials. You kick your feedback and you do less. Who cares if the guacks extra? Jeff Bezos, he is retiring next month to outer space. True. Bezos is going full Spazos. 15 days after his last day as CEO of Amazon, Jeff Bezos will be the first human being to ride in his rocket, Blue Origin, to outer space.

Jeff is jumping in. It's an 11-minute ride 62 miles above sea level, very casual. You know, Nick, that's not deep space. It is technically outer space, though. It's 100 kilometers up. It's a space. Now, some retire to Del Boca Vista, but Jeff is briefly going to a galaxy not far away. Hey, Alexa, can you tell the shipper to leave it by the asteroid? Snackers. Now, in 2016, Jeff Bezos, when he was launching Blue Argin, he said you should only build a rocket company if you'd bring your mom and kids on it, too. So he's also bringing his brother up. It's the brothers Bezos going on this rocket.

And he's also bringing up a complete stranger who pays the most in the auction for the third seat. Auction closes this weekend. Yeah, current bid $2.8 million ends this weekend. Anybody with a few million bucks can be Jeff's co-pilot. Jeff slash Jiggy Jack. Let's hit our three stories. You're tuned in this next daily.

We got to get something legal out the way. The snacks about the hair ain't food. It's air candy. They don't reflect the views of the Robin Hood 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 of a security.

Right. Snacks is digestible. Business news for you. Robahood Financial, LLC, member FINRA slash SIPC. For our first story, the corporate tax haven of the mooch, Economy is ending. This is bad news for Ireland and its low tax buddies, but good news for pretty much everyone else.

I know you're looking out of Bermuda, but first, Jack, can we hang out with our friends over at the G7? If they'll talk to us. Sounds like a luxury private jet. It's actually a luxury private retreat for the richest countries in the world. Jack, the group of seven, can you tell us who's sitting at the cool kids table over there? Here's the roster. Canada, France, Germany, Italy, Japan, the UK, and the United States.

Jack, are we meeting an Aspen or? we just do the loft in Tribeca. If you've hosted a summer Olympics, there's a good chance you're in the G7. Yeah. Jack, actually, you know where they meet? They have an exclusive Pelton class just for them under a sweet green in Jackson Hall. Well, actually, I need to amend my Olympic comment because China and Russia are not in the G7. Good point. But this is still the big kids table of the world economy. In the meantime, that group of seven, they got their finance ministers to put on some fancy clothes and head over to London to make a deal over the weekend. Here's the announcement on Saturday from U.S. Treasury Secretary Janet Yellen. No more tax havens because we're all sick and tired of

corporate mooching. Basically, they said, we need to agree to the rules that, like, we're all going to agree on new rules, right? Like, are we good on this? And here's the new rule. Every country, all of us, all seven, we are going to agree to have a minimum corporate tax rate of 15% no lower than that. That means Mulligans on the first hole only, okay? Right. If you shoot a seven on a par three, it's double par. Mark it as a six. They're all agreeing to the same rules. Losers buying lunch at the club. It's a day. It's a game. That's the plan. This pact among the G7 could end the desperate race to the bottom of tax rates that attracts corporations. I mean, case in point check, let's take an alphabet soup example.

Country A, let's say they drop their taxes to 7%. What is company Z going to do? Company Z is going to change their corporate passport to say that they exist in country A to benefit from that low tax rate. Now, that's part one. But there's a part two of this deal that company headquarters are based. basically being erased. Europeans for decades, I think, have been furious about U.S. big tech domination in their content. I mean, Jack, you got Amazon's huge in Germany, Apple's huge in France, Google is huge everywhere.

The reason they're furious isn't because those companies dominate. It's because they dominate. Yeah, they do. They're ridiculously profitable. So profitable. But they pay next to no taxes in those countries in Europe. It's like these tech companies are partying at every house in the neighborhood, but they won't pitch in for the Capri Sun run.

It's not their neighborhood either. Europe's neighborhood. And these are American partiers. They're moochers. By the way, everyone thinks a beer run is fun. Trust us. If you have Capri-Sun at your party, it's a way more fun party. The big tech giants primarily pay taxes in Europe just to the one European country that they picked because it has the lowest tax rate of all the countries over there. But here's the big change. With these new rules, if one company does 10% of its business in Italy, then it must pay proportional amount of taxes to Italy as well. So Facebook may choose Switzerland for their European headquarters. Very nice. But that won't matter anymore with the new rules that tax proportionally

based on sales. Skis as much as you want, Zuck. So Jack, what's the takeaway for our buddies over in every countrymanian in the world? For every finance yin, there's a business yang. You lose money, but you win goodwill. Jack, I think that was a Socrates moment and I think you know it. Snackers, U.S. corporations, they will pay more in taxes because of this major change, but there's value in being hated less. Here is how big, rich tech companies avoid taxes. in Europe. Apple's European headquarters, it's actually in Ireland where they only pay a 12.5% tax rate. It's teeny. Google's European headquarters is double Ireland. Yeah, it is. First, their profits flow through Ireland and then Bermuda, where the tax rate is even lower, 7%.

So if this international tax change becomes real, which there's a good chance it will, billions of corporate profits will stop avoiding taxes on the spot. That means billions of corporate profits will go to the government instead of their shareholders. here's what Jack and I are thinking. Then you'll have fewer Amazon paid no federal taxes last year, headlines, which means Amazon may be less hated. That's why an Amazon spokesperson called this deal a welcome step. It's the finance yen to a business yang. For our second story, Biogen was the biggest stock on Wall Street yesterday, surging 40 percent, and then it had to get stopped. They had to stop trading the stock. The stock jumped so much because of a miracle drug

and because of birthday cakes. Now, we don't want to rank diseases here. All diseases are bad. But this one, Alzheimer's, it is particularly painful disease to see happen. The FDA yesterday just to prove something called Aeduhelm. It's the first new medicine to treat Alzheimer's in two decades. Let that sink in. There has not been a major development to fight Alzheimer's in 20 years. We're going to go a little scientifician. This drug eliminates a toxic protein called amyloid that attaches to the brain in six million Americans who are suffering from Alzheimer's. So this isn't a cure and it doesn't reverse the progress that the disease is. is like already made. But it hopefully does slow and stop it from further harming the brain.

Now, here's the wild thing about Biogen, the company that created this treatment. Biogen knew the news was going to be so massive that they preemptively asked the stock exchange to not let anyone buy their stock. They pushed the red butt. They did. And after three hours of the stock not trading because of this news, doing nothing. And the company wanted everyone to be able to digest the news. Finally, trading resume 50%. percent higher than three hours before. And the reason biogen stocks searched 50 percent when they let it trade again is because this has purebred profit puppy potential. Snackers, this sounds like a wonderful treatment, but it is wonderfully expensive too. It is. It's not $1,000 or $2,000. It's not even cost you

a few thousand. It'll cost you tens of thousands of dollars. Fifty-six thousand dollars a year to treat. Oh, but wait, there is more. Just to administer, test, and like, monitor your treatment, that's an extra $30,000 a year. Okay. Six million Americans have Alzheimer's. today. Yep. That's expected to double by 2050. Now, it sounds like there's a fairy tale story here, but there's a catch. There's a single major condition. Many experts are actually upset that the FDA approved this treatment because of an unusual conditional approval it came with. Yeah, biogen still has to complete one more trial technically. They proved to the FDA that this drug eliminates that toxin we mentioned, but they haven't proved that eliminating the toxin will actually

help the brain. So they still have to do a phase four final trial, which is going to take some time. In the meantime, you can actually still get the drug. But still, they still got to do another trial. If phase four trial does fail, the FDA can rescind the approval. So it's a bummer that, you know, there's this uncertainty. So, Jack, what's the takeaway for our buddies over at Biogen? Biogen is a case study in the biotech stock, birthday cake.

Snackers, some stocks slope down. Most stocks slope up. And Biogen stock, it's a little different. Jack and I think it kind of looks like a birthday cake with candles. Okay, it's flat for like a year. And then, whoa! It shoots something. up like 30%. And then it's flat for a while and then it plummets out of nowhere. And then it's flat

for a while spikes again. You can Google it. Check out Biogen stock price chart. And these spikes are so skinny. It's like one of those 12 candles you got on your 11th birthday because your parents forget your age. So let's go back to the day before yesterday when Biogen stock, we noticed, was at the same price where it was way back in 2015. Over the past six years Snackers, Biogen stock has doubled in price and then fell by half. Then doubled in price and then fell by half again. And all of these movements were extremely abrupt. Yeah, they were. And if we look back on their earnings reports from six years ago,

we noticed interestingly that they mentioned one specific thing. Biogen stock plummeted six years ago on news that their Alzheimer's tests didn't do well in the results. The same Alzheimer's drug that just got approved yesterday. The massive spikes and the massive drops, they're caused by drug results either being positive or negative. From a single drug. So biotech stocks, they can be flat for years while a drug. drug is being tested, but then they surge or plummet while that same drug is being tested over years. And that's why Biogen Stock chart is a case study in birthday cake stocks. For our third and

final story, Marriott Vacations does not want you to confuse it with its older sister. The stock of Marriott Vacations rose 2% yesterday because it's winning in travel right now. Okay. So far this year, Jack, came me on vacation. Where are we going? Talk to me about the hotel industry. I'm actually spending the night at your childhood place tomorrow. Interesting. We're actually damaging the stocks in the store. I hope you got that bunkbed stuff. I mean, I'm charging you nothing. It's going to be a blast. I'm making pancakes. All right. Now, hotel stocks are up 11 percent, not because I'm paying for one tomorrow night. No, no. And Marriott hotels, specifically, their stocks only up 14 percent this year. That's it. Marriott Vacations, a separate publicly traded

company outperforms them both. They're up 30 percent this year. Marriott Vacations. It is a different company that has found a niche that is thriving right now. Time shares. The sweatpants of travel. Jack, people with cash investing in homes for three weeks days to cook and argue with their family. Scrabble is great as long as mom is winning Scrabble. Separate rooms.

Everyone two separate rooms. Now, this is a timeshare company and they literally measure and publicize the number of tours they've given to prospective timeshare buyers. Jack, what do I got to do to get you in this two bedroom condo? Marriott Vacations had nearly. only one billion in sales last quarter, a half from selling time shares and another half from managing time shares that they've sold. And they're beaten airlines because, as they put it, this is a 100% leisure company. So it doesn't matter that business travel hasn't come back yet.

And they're being hotels because 100% of their product has kitchens. And that does matter because people still don't necessarily want to go out all the time. Jack, if you're going to be somewhere for three weeks, a stove becomes an actual competitive advantage. So occupancy for Marriott vacations is at an all-time high. Jack, South Carolina, 79% of their units are occupied. Best ever. Their Colorado Mountain timeshares are at 87% capacity. And then Jack, clearly, uh, the smartest timeshare owners here over in Oahu, Hawaii, 89% occupancy. So they're managing timeshares for 700,000 timeshare owning families across seven brands from Marriott to Hyatt to Sheridan. So it's not just Marriott. They're doing this for Hyatt and Sheridan properties too.

And there's a whole book about corporate mergers that explains that situation. We jumped and snacked out to their latest earnings deck. You got the smiling families. You got the palm trees. You got lots of quicksilver gear on every single family member. Or is the Kramer family once had fake Oakley's on every kid's face? I think when I met you, Jack, you were wearing board shorts on a winter day. So Jack, what's the takeaway for our buddies over at Marriott Vacations?

This is the rare pure play baby boomer stock. Funny thing we noticed when we dove further into that deck snackers, they described their total addressable market, their TAM, as quote-unquote enviable, large, and attractive. Specifically, it's large, attractive, and enviable because everyone has a $740 or higher credit score, $130,000 income, and a $1.5 million net worth. If so facto, Jack and I said, this is a pure play baby boomer stock if we're looking at these numbers.

Two-thirds of their customers are baby boomers. Sure enough. But here's the problem. The oldest millennials just turned 40. And yet the oldest millennials have. 80% less wealth than their parents did at the same age. So millennials are less likely to be able to own a timeshare, but at least you can own stock in a timeshare company that sold the time share to your parents.

So Marriott Vacation's business will be great as long as boomers keep wanting more and more timeshares, which is what they depend on for their business. Eventually, it'll have to find a new total addressable market, one that looks more millennial and Gen X. Jack, can you whip up the takeaways for us over here? The G7's minimum tax rate means companies will have to be more tax. taxes, which is definitely bad for them. Yeah, people will stop resenting them as much. It's a business yin to a finance yank. Biogen's 50% stock pop added 20 billion worth of value in just one day.

It's another candle atop this birthday cake biotech stock. Marriott vacation stock. It's up 30% because it offers the right travel to the right generation. But it's catering to an aging demographic, not a long-term sustainable strategy. Time for our snack fact of the day. This one tweeted in by Kelly Sullivan from lovely Fairport, New York, But she spent some time down under. Sydney. Great city. They've got a Mardi Gras Pride Parade that is an annual LGBTQ plus Pride Parade and festival.

It also happens to be one of Australia's largest tourist events in the entire country. 500,000 people visited in 2019 for that Prad Parade. Make that entire continent. It's the second biggest annual event in terms of economic impact for Sydney State. Yeah, Sydney-Martygrau Pride Parade. It generates $23 million in economic value for the whole city. Pride is a profit puppet. Friday is a profit.

Oh, Snackers, before we go, I made an epic blunder, which I'm going to blame on me being a new dad. You haven't celebrated one of these to yourself, Jack. Sunday is not Father's Day. It's the Sunday after Sunday, but you're welcome for giving you advance warning and making sure you get the right gift. You should still call your dad this Sunday. And if you haven't yet, call your mom too. If you know, you know. Because every day is also Podfather's Day.

Jack, I'll see you in New York tomorrow. Let's do this. See you there. He's coming in, baby. He's coming in hot. And before we go, congrats to Garrett Santora just had his second baby.

We're pumped for you. And congrats to Doug, whose U8 girls soccer team won the final game of the season. And we had a fantastic wedding last weekend to shout out Yuri and Jackie who met in Brazil, married in Chicago.

It looked lovely. Happy second anniversary to Angel and Grant in San Francisco. And to Rohan and Andrew, happy anniversary down in Austin. Happy birthday to Corey in San Diego. Turn in 27. And Bill Hayter,

happy birthday from Tulsa, Oklahoma. And happy birthday to ROM in Pacific Palisades and Jackie Lamb in the Upper East Side. And to all these pizza if you know, you know. Snackers, this is Jack. I own stock of Amazon, Nick on stock of Apple, and we both own stock of Peloton. 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. I hope you got that bunk bad stuff.