The Best One Yet - “Opposite Day at Domino’s” — PPP + $320B + shaming. DraftKings goes public. Domino’s is better in Corona-conomy.

Episode Date: April 27, 2020

If you were impressed by Chipotle’s surge in online sales, you’ll be blown away by Domino’s. The Paycheck Protection Program (PPP) just snagged $320B in more funding from Congress, but publicly traded companies are about to get shamed over it. And sports betting app DraftKings decided, ‘what the heck, let’s go public’ — even though there are literally no live sports to bet on right now (except Russian table tennis).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. Welcome back. It is April 27. What a crazy week last week. Kind of feels like March 48th. Stocks actually dipped a little bit over the week, which was a bit of a bummer. In the meantime, Jack had to replace his Japanese titanium thermos with a paper cup so he could get through the weekend. It's a much less dangerous thing to drink scalding hot tea out of. Snackers, I had to ship him an ice cube of cold milk just to make sure he was prepped for today's pot. How are we looking on this one, by the way? 48% of my taste buds have returned to normally functioning power. Turns out this is the best snacks daily. Jack and I have ever whipped up. First story, please. For our first story, Domino's Pizza's earnings report is the opposite of everything else happening in business. They've got three new toppings. They got pepperoni, mushroom, and champagne. It's like it had a magic eight ball 10 years ago and has been preparing for 10 straight years for this particular moment.

Snacker, sales are up big. No adjustments looking at you, Uber. For our second story, our three favorite letters in the English language right now. We got P, we got P, and then let's go with P. The Paycheck Protection Program is getting a fresh 320 bill because one out of every six Americans is unemployed right now. Oh, and publicly traded companies, you're about to get shamed by the Treasury. Our third and final story is the IPO of the day. We got a typo in here. What's going on? I thought we prepped for this. Did a new stock start trading on Friday, Nick?

We're talking about the gambling royalty over at Draft Kings. You sure about that? I think so. Are we talking about this? You want to bet on it? I don't think so. It's not appropriate. Even though there are literally no live sports to bet on in America or the rest of the world?

None. The sports betting app just went public. Turns out they're betting everything on Russian table tennis. Real thing, we'll get to that. But before we get to those stories, we all know you were elbow deep in flour and yeast this past weekend, trying to bake something up. You're trying to come up with the next homemade cronet. We all are. We get it.

It's a beautiful thing. We have to give a big shout out to King Arthur Flower. a company which has a baker's hotline available to us all. We're talking about an institution at this point in New England. Been around since, you know, 1790, pretty much as old as the country. The company was founded in Boston, Massachusetts, but now it's based in Norwich, Vermont. They basically moved upstate into the beautiful Green Mountains, which is really every Bostonian's dream, right?

That's exactly what they do. I think they're located in what's called the Northeast Kingdom. We're not kidding on this, right, Jack? The Northeast Kingdom is a real county in Vermont. It's where the wildlings live. We take every state seriously, but it is interesting that Vermont has decided to divide itself up into kingdom. Now, this is the most hands-on support customer service of any company in the coronavirus. Snackers, get this. Whip out your phones, dial up 855-371-2253. They will literally answer any baking question.

Did you overstarch the rye? King Arthur's Flowers got your back. My butter's not at room temperature. What's the most efficient? an option to fix that. Seriously, check out King Arthur Flower's website. Barbara, David, Yvette, and 10 other baking experts are available 24-7. Correction 9 to 5 with an hour and a half lunch break. In Vermont, that is 24-7, Jack. King Arthur Flower 1790, officially the oldest company mentioned on Snacks Daily. Let's in our three stories. You're tuned into snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about to hear rain 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. 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 FINRA slash SIPC. For our first story, Domino's just revealed a shockingly good, shockingly surprising earnings report.

It is opposite day at Domino's Pizza. Full disclosure, by the way, this is Nick, and both Jack and I have mouths and hearts that own shares of local pizza. Danny's Pizza in Cue Gardens, Queens. Joe's in the village. Antonio's in Providence, Rhode Island, where Nick and I have both had many a late night's slice. They used to put the meat in the pizza in on top of the pizza, and then Jack, can we travel up north for a quick minute? American Flatbread, the OG farm-to-table restaurant in Waitsfield. They literally grow the pizzas in the soil, then they pour some water on, and they grow into the thing.

Let's migrate this conversation, though, to southeast Michigan, home of Domino's pizza. Where sales are not only actually increasing, they're actually surging up 7.1%. Nick's like they're not only increasing, they're increasing. Today's Snacks Daily, sponsored by a Thesaurus. And those figures, those increasing sales, are taking place during the height of the economic lockdown of the second quarter. Snackers, get this, and keep this in mind. The average Domino's location had 7.1% higher sales. during the first four weeks of the nationwide quarantine compared to last year.

7.1% higher. No caveats. Nope. No asterisks. This wasn't adjusted like Uber 12 different times to ignore the cost they don't want you to know about. We see you, Dara. This is 100% pure Colombian unbridled, unadjusted sales statistics. This stuff is raw, good street stuff. Throw this all into a cardboard box and domino stock is up to a record high. The pie tastes so good though, Nick. Can you add some more shockingly positive? positive toppings to this pizza. One second, Jack, I'll whip you up with some of good a pizza over here. Furlowing employees. Nope. Domino's is hiring 10,000 more. What about saving cash? Is Domino's saving cash? Absolutely not. It just whipped up a special thank you dividend cash payment to shareholders

like a surprise birthday check. How about the apocalypse? Are they cutting back on spending? The CEO just said, we're not slowing down advertising at all. What about innovation? Did they cut down on innovation? Well, its whole business right now is delivery and pickup, so they're innovating with the pizza pedestal, which is a cardboard cylinder that the delivery guy puts the pizza on, so it doesn't have to touch any surfaces. The box only touches the circumference of the cardboard ring. We just found the birthday present we all won in 2020. This is innovation you only find in Ann Arbor, Michigan. So, Jack, what's the takeaway for our buddies over at Domino's who are keeping it al dente? Everything Domino's has done the past decade is working in the

Corona economy. Snackers, one of the first companies to ever invest in online orders and an app and deliver itself, that was Domino's. Domino's has offered pizza tracking online so you can see that it's the corner of state and Maine since 2007 before Zuck had any facial. It's also before DoorDash, caviar, postmates, new barites even had a line of code that they knew was a code. We mentioned last week that Chipotle's online sales are up 80%. 80% is the percent of total sales at Domino's that are online. It's amazing. Now, there is no guarantee that this kind of growth can continue, but this earnings report from Domino's reveals that it can handle the pressure of COVID-19. Also, most Domino's locations don't even have tables, so they don't even need to announce that you can't eat here because there

were never tables there. It's a takeout operation that Henry Ford would have come up with, probably in the same location, and it's perfect for this moment. For our second story, round one of the small business bailout was kind of a disaster. So Congress and the Treasury just set rules for round two and set up its public shaming strategy, which is crucial. We should probably clarify for right now, you down with PPP? The Paycheck Protection Program? Everyone's talking about our three favorite letters, PPP and P, the old triple P. Especially Nick's dad, who's basically the PPP whisper. If there's any mid-cap companies out there, Nick's dad's your guy. Mike is on it. Congress just added 320 billion bucks to its grant fund for

small businesses, also known as the PPP. And that's important because 48% of All American workers work at small businesses. So companies that have less than 500 workers are eligible for two and a half months worth of payroll expenses, which is free government money. Now, the important thing to remember here, Snackers, is that these are technically loaned. So they become forgiven if you don't lay off your workers, which is nice. Right. So if you take the money and run, you got to pay it back.

Yeah. If you take the money and pay your workers, you never have to pay it back. Always a good thing to do. And the first $349 billion of this whole bailout package, number one, kind of a crap shoot. Right. Banks treated companies differently, and it was quite unfair, and a lot of companies didn't get the money they desperately needed. But a bigger issue ended up rising out of this. In times of economic crisis, well-off companies and rich people shouldn't be taking bailout money from taxpayers. We know you're listening, Jerry Jones. You're cowboys and you shouldn't qualify for a small business because the team just has 53 players. Jerry Jones did a live NFL draft Thursday night from his $250 million yacht.

I don't think he should qualify for the PPP. Even the dingy on that thing is not a small business. And yet, a whole bunch of really well-off companies were taking money through the paycheck protection program. Interesting loophole here, Snackers. Big restaurant changed. They were actually eligible for this money as long as no single restaurant had like a massive amount of 500 workers.

Right. So this thing is for companies that are 500 workers. less, Shakechack has 7,000, Sweet Green has more than 500 for sure, and they both took the maximum $10 million. Also, the confusingly named Ruth's Chris Steakhouse, which claimed they were two separate companies and managed to run away with $20 million out of this thing. The Wall Street Journal added this up. 149, like pretty well off publicly traded companies on Wall Street, got $600 million total in grant money from the PPP. And eventually the money ran out. That meant that smaller, less resource mom and pops like our buddies over at King Arthur Flower got left out with no money and

had to face a crisis. In case you're wondering, Shake Shack returned the $10 million because they felt bad about this. Ruth's Chris returned their $20 million because it looked really bad. Also, Ruth's Chris needs to figure out their name. The possessive is extremely confusing on it. No title should have three apostrophes. Round two of the payment projection program is using a powerful motivator to make sure that the neediest companies and not the wealthiest companies get the money. Maybe the greatest motivator of all, shame. 60 billion of the 320 billion that Congress just passed is specifically for small banks that serve truly small businesses. Get this, Snackers, the Treasury Department has threatened to publicly shame big, well-funded companies from taking money out of this in a wild way.

Trump would probably be tweeting at you if you're like too wealthy to take this money. But in the meantime, the Fed's going to start publishing a monthly list of loan recipients so we can all see who's actually getting our money. So the Treasury Department and the Federal Reserve Bank, public shaming is key to their strategy. Hear ye, hear ye. Rousse Chris hath taken $20 million. So Jack, what's the takeaway for our buddies

who are working hard over in small business? The size of the economic hole in America keeps getting bigger. Snackers, by ordering non-essential businesses to close, a huge chunk of the economy has now just been turned off. Last week, we learned that 4.4 million people filed for first time, unemployment benefits. That brings the total to 26 million, aka one out of six U.S. workers is unemployed right now. Let that sink in. One out of every six American workers is unemployed right now. Now, those workers are getting from the CARES Act state unemployment benefits like usual,

plus a $600 a week federal bonus. But the goal is to keep them employed and keep businesses from going bankrupt because that's critical. Unemployment benefits are nice, but if companies go under, the recovery will take a lot longer to happen. And that is what PPP is for. Vince Lombardi once said, it's all about the second half of your snacks challenge. We're just over halfway. You should turn around and head back home. For our third and final story,

Draft Kings just did one thing that no one else is doing right now. It publicly listed their stock on Wall Street. And its entire business model is not happening right now. Draft Kings depends on live sports because that's what you bet on and play fantasy sports on. No joke, Snackers, the only live sport right now is Russian table tennis. In Russia, they're treating table tennis like we treat baseball in America. The biggest event this weekend was Hvgeny Massican versus Alexander Grigoff. We watched the whole thing Sunday.

This got wild. I think the scoring in table tennis is the same as the scoring in regular tennis. In Russia, scoring does you. Now, valued at $3.3 billion is Draft Kings, which is basically. based out of Boston, Massachusetts, the second mecca for sports betting outside of Las Vegas. It's also definitely located next to a Duncan. And Draft King's bread and butter is daily fantasy sports, but it's meat and potatoes is sports betting. Yes. The arch rival of Draft Kings is a company called Fandul, which shockingly isn't based in Boston. It's based in New York City. And those two,

Fandul and Draft Kings, they battled each other ferociously for years. Get this stat, stackers. Combined, the two companies splurged over two. 200 million bucks on ads back in 2015, a single year. Do you remember, Nick, every sports stadium you went to, the left field wall had a draft king's ad, the right field wall had a Fandul app. You'd roll up into Madison Square Garden, you'd go to Gate 3 sponsored by Draft Kings next to the bar sponsored by draft kings at the section sponsored by Draft Kings. They offered you like $50 of free betting cash if you sign up before you sign up for the other one, because you were going to sign up for both. Or buy this $23 pretzel sponsored by Draftings also subsidized.

by them. Those two rivals called a truce. In 2015, they aimed to merge with each other, and they would have controlled 90% of the fantasy sports market. The government looked at this laughed and said, we're not going to approve it because you'd control 90% of the sports fantasy market. And that would be a monopoly, which is illegal in this country. Both were badly weakened from the fight. But then came legalized gambling, which was a million to one odds bet. Nobody was betting on. It came out of nowhere. Draft Kings was a fantasy sports company since 2012 doing football, college baseball, and strangely had left out lacrosse, no idea why. And there was also daily fantasy sports.

So you didn't need to like find 11 buddies who would commit and give $100 to some pool that over the course of five months you would battle for with some trash talking chat. Probably named our buddy Timmy. Every day you could pick one player and say he's going to get two hits. And if he does, you make money. The interestingly awkward loophole that was found here was that. that technically this was fantasy, which wasn't considered gambling because it allegedly involved skills. Virtually all legal sports betting had to take place in Nevada until a 2018 Supreme Court

law allowed other states to legalize. Draft Kings hadn't expected that when they started the business back in 2011, and now 21 states and D.C. have legalized sports betting. And that's a whole new big market for Draft Kings. So what's the takeaway, Jack, for our buddies, over Draft Kings? Draft Kings believes that sports isn't the only thing you can bet on. Snackers, the app usage and the bets on the platform, those are all way down right now. We learned when the company went public on Friday. But the competitive vibe that those are all about is not. The CEO is fighting to find something positive to talk about.

He noticed that bets on e-sports competitions are, quote-unquote, absolutely exploding. And then the team over at Draft King got pretty creative here. They partnered up with EA Sports for simulated football video games on Madden, that are now taking bets. This is literally when your buddy Timmy played against your buddy Phil in Madden in the dorm room and like some kids in the background are like 20 bucks on Timmy. You throw two pickles against the wall, see which one moves faster. Draft Kings will probably let you make money off this.

One user last week made a $350 bet that the San Francisco 49ers would trade up to select Ohio State defensive and Chase Young, who was expected to be selected by the Redskins who had the number two pick. Draft Kings is literally letting you bet on that experience. That guy's bet lost, by the way. The San Francisco 49ers did not trade up. Draft Kings went public because it's thinking long term. Its business is competition, not just sports competition.

Jack, and you know, whip up the takeaways for us to start the week. Domino's business has gotten better in the corona economy. No asterisks, no footnotes, no adjustments to that statement. It's like the past 10 years of its moves, we're sitting in the oven waiting for this moment. Second story, the paycheck protection program. is getting 320 billion of fresh cash to save more small businesses. Shame. It's a powerful motivator for companies that probably shouldn't be taking all this money. Third and final story, Draft Kings went public on Friday and it's stock rose 10%.

There are no sports to bet on, but there are competitions, apparently, some people can bet on. Now, time for our snack factor today. This one's from Ben, a snacker, and yet we don't know where he lives. When we recorded this pod, he hadn't got back to us with his hometown. And all we know is His name's Ben. Honestly, it sounds like it could be, it could be my Bitcoin, Ben. It could be Ben. Now, on Thursday night, the NFL draft went on as planned, except it took place in everyone's living rooms because it was remote and zoomed. It basically happened in Commissioner Roger Goodell's Man Cave basement, which makes sense because most people stay six feet away from him at all times, even before all this. That is very true. If only a quarterback had the same protection.

Now, Ben points out one great statistic about the Denver Broncos. They have won a few Super Bowls, I think, but they have only won Super Bowls with quarterbacks drafted by the Indianapolis Colts. Can you throw us a roster of those names? You got John Elway, who is drafted by the Colts and the Yankees. Okay. And then you got Peyton Manning, who is drafted by the Colts. Fair point.

The takeaway, the trend is your friend. By the way, do we have a correction here? Gwok is free in certain circumstances at Chapo. If you get a veggie bowl. without meat, the guac comes with it. Thank you, Jason Grout from Brooklyn, New York, Middlebury College, class of 07. Turns out Jason found a hole in the universe.

My mind is blown. Snackers, thank you for snacking with us. Please share your favorite bite from today's snacks with buddies or on social media. We want to see what you're snacking on from what we were just snacking on. We'll see you tomorrow. By the way, this is Nick and I own shares of Chipotle and have that Bitcoin named Ben.

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 intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.