The Best One Yet - Oprah’s 9-city Weight Watchers tour — Boeing’s worst year ever — Alexa’s profit pivot

Episode Date: December 18, 2019

Weight Watchers tried to turn itself around the last couple years by adding Oprah to the board, but now she’s headlining a 9-city WW wellness tour. Now that Boeing has officially suspended production of its controversial 737 Max planes, we break down its worst year, by the numbers. Getting Alexa everywhere was Part 1 of Amazon’s voice activation plans — Part 2 is making money off your Alexa use.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 Wednesday, December 18th. Markets are the new record high. And this podcast features Lady O. We're talking Oprah. We're talking Oprah.

That's why this is officially the best snacks daily. We've ever crafted Jack. Our first story is Weight Watchers, the new company which has rebranded to just WW. Simple. Don't even think about it. It's basically been taken over by Oprah. The self-made billionaire is on a nine city tour to promote wellness and weight watch. She's their new CEO.

Chief Everything Office. Not exactly. Second story, Boeing. They started the year with problems. Yeah, true. They're ending the year with a bigger problem. That's 737 max production? It's 100% halted.

We're breaking down Boeing's worst year ever by the numbers. Think of like a screeching wheel noise right now. Snackers, third final story, Jack? The voice assistant Alexa had one purpose the first five years of her digital existence. Basically get Alexa everywhere. Now, it is pivoted to a new profit phase. Make money off of you. Make money, Alexa.

Now, Snackers, before we jump into all that, we got to talk about a problem that is rampant across the United States. There are a record number of vacation days that are being forfeited in 2019. Jack and I took a vacation day basically to research this thing because we found a lot of different data. Actually, the travel company Priceline did a story to research this thing, which makes us question the results. But they say that about half of Americans have a whole bunch of vacation days. They haven't used yet. And you know, they only got like two more weeks left this year, America. Other studies show it's like a quarter. Either way, it's a large number who are not using vacation days.

So there are $65 billion of paid time off that Americans are forfeiting and not even rolling over to next year. Now, Jack and I wanted to let you know this snackers, because one, you should be taking some time off around this time. In my old job, which was at a German bank, they made me take my time off. One time I had jury duty, I was out for a week and I was like, I don't need those two days. My boss called me in. He's like, Jack, you must take the days off. Untrue story. Jack has the physical scars to prove that. But Snackers, the other reason we wanted to share this with you is because Jack and I are going to be taking some vacation time for the next couple weeks starting after Friday. That's right. Nick and I are finishing up this week, bringing the best one yet every single day.

But starting Friday, we're going to take two weeks off in the pod so that we can celebrate our holidays with our wives, with our brothers, with our sisters, with our families. We're going to be in Vermont. We're going to be in New York City. We're going to be on Long Island, upstate New York, across East Coast. But Snackers, we're going to be getting ready, getting sick, getting mentally prepared for. Monday, January 6th. 2020 is going to be a mindful year. We encourage you to take off as much time as you can because you need some rest and relaxation.

In the meantime, Snackers, we've got three best pods yet to deliver. Let's start with today. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about to hear 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 resource. search 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, weight watcher shares just rose because Oprah's staying on board until 2025. And because of Oprah Paloza. I can't remember we get the T-shirts on this thing. By way, Oprah, big time snacks listeners. Now, full disclosure, Nick's in my team workout that we do every day.

It's one of the ways we burn a lot of. I'm spotting him, he's spotting me, it's a lot of spots. It's actually called the no sweat workout. We do it at work right before lunch. No joke. It's called no sweat because it's easy, but it's also called no sweat because we don't sweat. Yeah, but seriously. We work out just hard enough so that we don't sweat.

Still wearing my khaki. Still wearing my eyes for sure. I'm doing big weight, snakes, doing little. Doesn't matter you don't smell with this thing. All right, let's talk about the Weight Watcher stock over here. It's been a roller coaster. In 2011, the stock was $85 a share. In 2015, it dipped to four.

Last year, it was at 100. This year it's at 20. We couldn't, we can't even follow this thing. It's like all over the place. And the reason why it's been jumping around a lot lately, Oprah. Just name the company Oprah all right. What are you doing? They renamed the company from Weight Watchers to WW.

Just call it Oprah. They called it WW because it's about more than just weight. It's about wellness. Well, Oprah has been a board member, a shareholder, and an advisor since 2015. She owns 8% of the company. She's the second largest shareholder. And what we learned yesterday is that she is going to keep on WWW. through 2025.

Okay. Now, the new growth strategy for Weight Watchers is Oprah Paluzza's American Tour. We're not kidding. This thing is literally called Oprah's 2020 vision, your life in focus. Expect a lot of 2020 focus jokes. Good prediction, Jack. That's not just for Oprah fans. That's for everybody.

Yeah, next year it's going to be a lot of 2020 vision. I can see it clearly meming. This is a nine city tour going from huge basketball arena to huge basketball arena. It starts in January, which is a critical quarter for, for WW for Peloton and for any other health or fitness company. Right. If it's a resolution-related thing, WW wants to be involved. The first quarter is critical for them, because that's when you're like, you're going to be writing your diary,

because it's writing a diary every day. Whatever the resolution is. You're going to be more intentional. Is that yours? Is your diary? I'm going to say no. More. Mine was diary last year. I'm going with diary again. So Oprah has already sold out 80% of the tickets for this nine city American first quarter tour. And UBS researchers project that it's going to lead to 8% subscriber growth in the Weight Watchers product. Yeah, because you might be a Weight Watchers user,

but you're probably going to bring a friend who might not be a Weight Watchers user, but after witnessing Oprah interview, whomever. Some serious celebrities we're about to tell you. So here's how it's going to go down. Let's see you go to one of these events. You're going to hear storytelling and wellness journeys that end with a celebrity giving you their action plan for 2020 on losing weight.

All right. On January 11th, Tina Faye is chatting with Oprah in Minnesota. And then on the January 25th, you got The Rock. in Atlanta, aka Dwayne Johnson. And then on February 8th, they got Michelle. She's hitting Brooklyn. Michelle is becoming in Brooklyn with Oprah. And here's the deal.

You can borrow the wellness tips that these people have. No pressure, but you can learn from each other. So, Jack, what's the takeaway for our buddies over at Weight Watchers? Human interaction is WWW's key differentiator. Turns out the biggest competitor to Weight Watchers right now is straight up dieting alone. It's not like another specific company. But Weight Watchers believes that improving wellness requires support from a coach, from friends, and from a community. All right.

So literally, unlike a most recent earnings report, the CEO of Weight Watchers called out the keto diet as something that's a threat to Weight Watchers. I completely don't understand what the keto diet is. No, no one really knows. All it involves is like eating less bread, having less fun, and being that person who won't order dessert at the table. Being robotic. But keto diet and other diets that you can try out at home, they don't include the community of offline human. beings that Oprah and WW can uniquely provide. For our second story, Boeing, it just had the worst year in its corporate history,

2019. We're coming to an end of 2019, so we wanted to look at Boeing's year in the numbers. Jack and I got these up on the old whiteboard. Number two, or two, the number two here. Two is the number of plane crashes. One of them actually happened in October of last year. True. The other in March of 2019.

Both were in 737 max jets and 346 passengers died. It was awful. Now, the one here is profit puppy. It's 737 max plane. It's been not selling for 10 months because the FAA has decertified it and grounded it. And that's because that 737 max cured their max. That was the plane involved in those two crashes. 42 is another number.

That is how many planes, how many 737 max jets, Boeing has continued to produce even though they're not allowed to be flown currently. Now, Boeing has 427-37 max planes just sitting, hanging out on its own parking lots waiting to be recertified. Yeah, it can't deliver those planes to passengers because the FAA has grounded these planes until they figure out what was wrong with them to cause those passengers. Honestly, if I were Boeing, Boeing should be Airbnb these things out right now. Let's go back to number one. That is the number of New York Times Daily podcasts, which exposed a culture of cutting corners to boost profits at Boeing. It's a wild episode. We highly suggest listening to this.

All right. That's the numbers. They're not pretty. Now, the latest news, the Renton Washington plant, which is one of the biggest buildings in the world. I took a tour of it. This thing is insane. It could be its own county. That's where they make the 737 max jet, and they have suspended production, basically because the parking lots are full.

Yeah, Snackis, you've got 12,000 employees who now are no longer making the tainted jet, but they're not being laid off either. Right. So get ready for some checkers and some. chess for those 12,000 employees, but there's just no more room to put planes that can't be sold. In the meantime, what fascinated Jack and I is that if you look at Boeing stock, it's shockingly up two and a half percent in 2019. But, I mean, that sounds good. That is shockingly positive because this has been the worst year ever. You're looking at all these numbers. You're weighing all these things. You're putting them all down. You're like, we, but everything, Nick, is relative

because the rest of the stock market has done much, much better than just 2.5%. The S&P 500, which is the 500 biggest stocks in America is up 27% in 2019. Now, the reason investors haven't, like, totally dinged down shares of Boeing is because Boeing operates in a really unique industry, a global duopoly. Major jetliners are produced by two companies in this world. Right. You're either going to get the Airbus or you're going to get the Boeing. And assuming that certification of the 737 max eventually happens, we don't expect Boeing to lose much sales at all from this entire saga.

Right. Investors are looking at this and saying, you know what, Boeing may not be selling as many planes right now to the deltas and American Airlines in the world. But Airbus is completely sold out. So eventually those airlines are going to buy the planes once it gets recertified. So, Jack, what's the takeaway for our buddies over at Boeing? Relationships matter. Regulators make decisions based on human conduct. And what happened to Boeing was a straight-up failure in crisis management to.

Throughout this entire year, Boeing's executives have been giving frequent, unrealistic updates to the public about when the 737 Max will be back in the air. Hey, hey, hey, everyone heard. It's going to come back in July. It's going to come back in August. It's going to come. We promise it's coming back in November. As recently as October, the CEO of Boeing announced publicly that recertification of the

737 Max plane was going to happen this year in 2019. And then regulators, the government regulators who control the airline industry, like the FAA, the federal aviation administration. I thought you were searching for that abbreviation. Yeah, I was thinking about that one hard. The FAA basically said to Boeing, stop making the airline. these ridiculous public estimates on timing because you keep messing them up. Right. Instead, like, actually show some remorse and stop guaranteeing that these planes are

going to be back in the air when they're not. And those updates from Boeing then ended up putting pressure on regulators to approve the 737 Max plane, which wasn't ready to fly yet. So Boeing was at the mercy of regulators to greenlight the plane. And the regulator's job is to keep passengers safe. And instead of fixing its deep cultural problems and fixing their planes, they kept on doing this whole B.B.R. Banana. Boeing forgot that relationships matter. For our third and final story, the time has come for Alexa to make the great pivot. Start making money. Oh, Snackers, we've got to talk about the product cycles of technology.

First, you grow, then you profit. It's actually that easy. It's just a one-two punch-down thing. It's actually the same thing for human beings. First you grow and then you try to make profits. Your hide tapers off and then you have to pay rent. It's actually really fascinating. So Facebook spent its first five years after the college dorm and Harvard growing. Growth was the only thing. And then it turned on ads in 2012 and now makes profits off them. And now annoys you with the ads in your newsfeed.

Uber spent 10 years growing and getting in everyone's phone. And soon, eventually, we suppose it's planning to start profiting. Yeah, investors are like Uber's parents. Like, can you get out of the house and, like, make something of yourself on this one? Alexa has the same story. It spent the first five years of its existence, just getting all up in your business. Right. Amazon wanted to get Alexa's everywhere.

There are 100 million Alexa enabled devices in this world that have been sold. Right. If it was like carbon-based or was touched by human hand, it was probably getting embedded with like Amazon Alexa technology. You got a smart speaker. You got a smart home, smart camera, smart refrigerator, smart dogball. They're like, Bob, are those sneakers? Put Alexa in those sneakers. There are 100,000 Alexa skills, which is what Amazon calls the voice commands that Alexa knows how to respond to. So you're like, Alexa, can you please guide me through? Nick and Jack seven minutes, sweat-free, smell-free workout every morning. No sweat workout.

It's a great thing. So after five years of invading your personal bubble, that's basically what's happened here. Amazon wants Alexa to start making money now, according to deep reporting by the information. Now, Snackers, Jack and I were fascinated by this one stat in particular. There are 10,000 employees working on Amazon Alexa products right now. They're called Amazonians.

And yes, there are 10,000 working on Alexa. That's like the space program. That's more than like every Nescac school combines. I'm pretty sure. And Wyoming's an amazing state. I think that's the population of Wyoming. Stop it. I think it's like Wyoming has like 50 times.

It's amazing. It's a great state. So the ways it's thinking about making money through Alexa is like premium content. For example, maybe you could sell Netflix through Alexa like video devices or Spotify premium accounts through Alexa. And then Amazon's going to pop in and take maybe, you know, a 30% cup of that subscription. That's what Apple does with the app store. Or maybe Amazon. Amazon starts introducing premium skills that you'd be paying up for.

I'm a huge fan of sports trivia. I was just wondering who has the most hits in the 2010s in baseball. Spoiler alert here. Usually Jack gives you trivia based on your hometown team, so just come up with three players who live near you. It's true. But suppose the questions that Alexa gives you with this trivia thing are too easy. They could have a premium version you have to pay for, and then Amazon would take 30% of the cut. Now, they haven't really made much progress yet on monetizing Alexa, except in one category.

Can we please bring out Samuel L. Jackson, ladies and gentlemen? There are too many damn Alexis on this plane. But seriously, he is the guy whose voice is now leading a lot of Alexa stuff. You can change the device to speak like Samuel L. Jackson because he must have spent like a whole year recording into Amazon Studios everything Alexa can say. It only costs 99 cents. It would probably be fun for like the first dinner party. I think then it gets a little stressful, then creepy, and then you just get used to it.

By the way, for all the Alexa owners, sorry for activating your device. And second, it's not. If you want to get Samuel L. Jackson to be the voice, you just have to say, Alexa, introduce me to Samuel Lajson. Now, Amazon's also going for, like, more A-Lister's, and they're probably going to end up charging more for that. Yeah, they're going to cost more than Samuel Lajx. It's going to be cool.

Podcast hosted it. Just throwing that out there. So Alexa has generated a million dollars in revenue through these, like, services that we're describing so far this year, which is practically nothing for a staff of 10,000 Amazonians. So, Jack, what's the takeaway for our buddies who are just working hard and trying to make Alexa enter phase two of its growth? It's not 100% clear that Alexa has been a success for Amazon.

Amazon's plan all along with Alexa was to be a lost leader, a product that they lost money on directly, but would indirectly lead to revenues going to Amazon. If you want toothpaste and you have an Alexa, you're supposed to yell at Alexa to order it through Amazon. Or they were supposed to make money off of like stealing your data and like following your trackers. No, we're just kidding. Spying on users through Amazon. But it is a little weird that she's listening to everything. We're just joking Amazon.

We're just joking. We're just joking. But honestly, the point of Alexa was just to get everyone to join Prime at the end of the day. Right. Now, Amazon's in a situation where they're not really making money off of V-commerce or voice commerce when you yell at Alexa to go and buy you something. Right. Nobody is ordering things through Alexa.

And also, Amazon is getting negative press for invasion of privacy because of these Alexa devices. The fact that Amazon is now pivoting to make money off of Alexa directly right now, that's a hint that maybe Amazon sees its initial purpose as a lot. of failure. Jack, can you whip up the takeaways for us over there? WW stock got a bump because of the New Year's resolution Oprah Paloosa Wellness Oprah's an owner, a customer,

a user, a board member, and a chief everything officer for Weight Watchers. Boeing has stopped making the 737 Max Jet because they're still not certified to fly and it's run out of space to park. Relationships matter and Boeing's management didn't focus on their key one. Third and final

story, Amazon is putting pressure on its Alexa team to start making money directly. And Snackers, that comes from reporting from the information, which simply produces fantastic tech journalism. Now, time for our snack fact of the day. This one sent in by Nishant from Hyderabad, India, but he's living now in Jersey City setting a snack fax, which is awesome. Nick, I watched the Lion King remake a few weekends ago with my wife. I give it two huge pause up. It was charming. It was wonderful. Now, the 2019 version was one of the biggest box office selling movies ever. The 1994 original

Lion King. Not so much. You ready for the box off this difference? Hit us with the numbers over here. The 2019 remake sold $1.6 billion worth of tickets. The 25 years prior version, the original? In 1994, they sold $41 million of tickets. Snackers, it shows how much the movie industry has grown, especially international. Yes, two-thirds of those Lion King sales happened internationally, and like the international market barely existed 25 years ago. Very true. Snacker. Quick trivia question. Who's the only voice in both of the movies, the old one and the new one? Trick question. One person did all the voices.

Fall, James Joel Jones, Buffass. That's the actual real answer. Snackers, thanks for potting with us. We'll talk to you tomorrow. Can't wait. 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 intended to serve as the basis of any investment decision. Robin Hood Financial LLC member FINRA SIPC.