The Best One Yet - “Peacock is the 761st streaming service” — Gap won’t spinoff Old Navy. NBC reveals Peacock. China weaponizes the wallet

Episode Date: January 17, 2020

Shares of the Gap pop 5% on word it’s doing the opposite of what it planned to do — it’s no longer spinning off Old Navy, its best-performing brand. NBC reveals the details of Peacock, but it’s acting like the flaky friend of the Streaming Wars. And China holds German car companies hostage (the USA is no longer the only global economic police). 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. It is Friday, January 17th. Snackers, get ready for a long weekend. Whoa, what are you thinking? What are we doing? Martin Luther King Jr., great American.

Let's celebrate with the day off. I'm on the way off to Jackson Go skiing. I had a dream that this was the best one yet. Jack, can you hit us with the three stories over there? Gap had a major announcement last year and shares jumped. It was going to spin off Old Navy. Now Gap has a major opposite announcement. It's not spinning off Old Navy.

And shares jumped. I'm Ron Burgend. Second story, what do we get? Comcast owns NBC. You know one of the channels you get NFL on? I think we're good on this one. NBC just announced the price and details of Peacock, which is the 761st streaming service that you can watch video on.

But who's counting? NBC's kind of like your flakiest friend in this situation. Third and final story, China is weaponizing its wallet. It's pressuring the Germans to use Huawei, a Chinese tech company, which is against the wishes of the United States. And if it doesn't, then China will stop buying German cars. It's kind of a messy situation. Volkswagen people are very interesting.

We got a strong takeaway for this. But Snackers, before we jump into all that, we got to talk about the situation going on between Netflix and Ben and Jerry's. There is a new pint out there. As they like to say, it's the collab. It's a collaboration between Ben and Jerry's, which is owned by publicly traded Unilever. They're calling this thing the Netflix and Chilled. Netflix and Chilled drop the E and just throw apostrophe in there. That is the collaborated ice cream they are coming up with.

This thing, Jack, can you throw the ingredients at this place? It's a base of peanut butter ice cream, which I love. I'm following in this one. And then sweet and salty pretzel swirls. You had to throw this sweeten. These pretzels are making me thirsty. And a little bit of salt. And then finally a bit of fudge browning.

Now, very nice mix. That's what they're whipping up. This comes from a long lineage of collaboration Ben and Jerry's flavors. Well, Ben and Jerry's is founded in Burlington, Vermont, let me add. And the first collaboration was Cherry Garcia, named after the great Jerry Garcia of the Grateful Dead. This actually came about because someone literally wrote in to Ben and Jerry's. It was like, hey, good business idea. You can see this on Ben &Jerry's.com.

In 1987, they got a letter from a fan begging them to create Jerry Garcia because Grateful Dead fans would go crazy. Now, you maybe already know about fish food or Stephen Colbert's Amerione Dream. Ben and Jerry's really has something for these jam bands. You got fish and Grateful Dead. Nice work. But we're wondering here is, what would be your personal pint? I don't know what my personal pint. During the January or outside of Biggandum.

That's why I took an hour today, did no snacks work, and focused on coming up with a personal pint for both of us. Here's I got. Here's I got. All right. One second. Let me pull this up. One second. All right, here we go. Jack, here's your personal pint. The jack of all flavors. Flavors. Here we go. It's going to have maple. Yes, of course. Carrots. What? And timber.

I'm not signed it up. For myself, I came up with the not the nougat. Nick. Nuget is the only sweets flavor I don't like. So I just want everything possible in this pint except for the nougat. Everything but the nudge. Fingles, you name me here. Snackers, this is a great contest. We should kick off. What is your hashtag personal pint? Tag Robin Hood Snacks on Twitter.

Tag us on Instagram. However you want to do this. Hashtag personal pint. We're going to throw the winners in our next T-Boy Tuesday. 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. Nope. It's not a research report or investment advice. Not an offer or sale of a subscriber. For security. Right. Snacks is digestible. Business news for you.

Robberhood Financial, LLC. Member Fenra slash SIPC. For our first story, NBC Universal just unveiled the streaming service. Peacock. Peacock, though, is the flaky friend of the streaming world. Speaking of Friends, can we talk about what's up with Ross and Rachel these days? It's Friends is not on Netflix anymore. We can't find the series Friends places.

I've been in a crisis with my wife. Plus Vig January. since January, when it got taken off Netflix, it's coming to HBO Max in April, but it's not there. It's unclear, like the one where Ross disappeared in this case. Ross, Rachel, Phoebe, they're all gone. My favorite character, by the way, the fountain in the beginning. It's hilarious.

Now, Peacock is the streaming service of NBC, which breaks a very bizarre streak, Jack, and I have noticed, of streaming services whose names rhyme in a weird way. Voodoo, Hulu, Hulu, Roku, HBO. Now, there are three types of Peacock service. The first is basic. Yeah, this basic one is you're going to be picturing like a little less legroom, a little economy class. You have to kind of yell to the flight attendant to get what you need.

Basic is free for everybody, but you've got to watch a bunch of ads. And you're not going to get some of the top content like the Olympics. Right. Or the NFL games. Or NBC has. Jimmy Fallon or Seth Myers. Or the top new shows, whatever those are at the time. Which immediately makes you think, you know what?

Let's hear about this premium version. The premium version gives you all that stuff. Yeah. There's also ads, though. So you get the best content, but you're still dealing with ads. It's free for cable subscribers of Xfinity, which Comcast owns. But if you're not an Xfinity customer, you're paying five bucks a month. You're getting double the amount of content, though, as basic gets,

which then leads to the next thing, which we're calling extra premiums. Right. That sounds like a Ben and Jerry's player. Someone should run with that one. Extra premium is all the great stuff of premium minus the ads, which costs $5 if you're a cable subscriber, or $10 if you have nothing to do with Comcast. Now, here's the awkward part that Jack and I noticed. The best deal seems to be not cutting the cord.

Right. If you want to get this cord cutting service. Comcast owns Xfinity, which is a major cable TV company. I used to have an Xfinity account, I think. So if you keep Xfinity, they're giving you peacock for free. And by keeping Xfinity, you're also then getting the early access. So you can get this peacock on April 15th instead of, you know, July 15th. Right.

If you're not an Xfinity customer, you don't get Peacock until July. So Snackers, we know what you're wondering here. Why is this a situation where a cable company is giving you a streaming option and the best way to cut the cord is not cutting the cord, but keep the cable option to get the streamer? Because it's Comcast and they don't want you to cut the cord. Because cutting the cord is their cord. They are the court.

So Jack, what's the takeaway for our buddies over at Comcast with Peacock? To win the streaming wars, NBC can't be flaky. It's got to commit. NBC, you've got to be an eagle. You can't be a peacock. A peacock is trying to get the best of both. worlds, but look at Netflix. Netflix has cannibalized its business before. It started as a DVD delivery company. Now it's all streaming. And when it launched that streaming online business, it was going to

kill its DVD business, but that was okay. Another one, Disney has cannibalized itself before. It's basically begging you to cut the cord with $7 Disney Plus, even though that means it's going to lose Disney cable subscribers who love like ESPN National Geographic and other Disney cable channels. That's why we're calling on Comcast, which owns NBC, which is put out Peacock to cannibalize itself, its core business. It needs to be willing to cannibalize Xfinity in order to win the streaming world. It's trying to have the best of both worlds. Which you can't have.

For our second story, the Gap just announced it's not breaking up with Old Navy. It's like they filed divorce papers. It's not you, it's me. They didn't sign them yet. We're not talking. And in the process of talking to lawyers, they actually realize they still live each other. We're picturing John Cusack with the radio. Just take me back, baby.

This analogy is not perfect because the gap can legally require Old Navy to stay at war game of thrones. Very much like chained and shackled into the dungeon. The gap is a publicly traded stock and it includes the gap, the brand your mom brought you to in the 90s. If you didn't have the sweatshirt that had a huge G the size of your face on it, what were you doing? But it also includes lower priced Old Navy where you can get a pair of jeans for like $7. And it also includes Banana Republic where you can get those same jeans with like a tiger printout. For $30.000. Yeah, true.

And then Athleta, which is Athleisure, Hill City, which is a men's version of Lulu Lemon, and then Intermix. I don't know what that is. Intermix is kind of like, it's like Zara, but kicked up a notch. Now, it's a tumultuous time for The Gap because it recently lost its longtime CEO Art Pek. But the reason we're talking about the Gap right now

is because they also had recently announced last year that they would spin off Old Navy, which is its top performing brand to run off, do its own thing, and be its own company. They presented a deck that explained what the new company would look like without Old Navy. And it's actually called New Company. They hadn't come up with the name of the post-old Navy bats company. Sweatpants company, big letter company. We couldn't come up with something. So they outlined the brands that would have still remained after Old Navy left. So in this deck on

slide six, we've got a very fancy little chart that kind of sums up the whole situation. You got an X-axis and a Y-axis. On one axis is fast growing and the other side is profitable. Now, you want to be far up into the right in both of those things. It's a lot of fun at there. That's highly profitable and fast growing. And down and to the left is slow growing. You know what to be there. Now here's the thing. The gap was the only brand far down and far to the left, which means the gap is low growth and low profit. Meanwhile, all its other brands were way higher. High growth, high profit. We're talking like Athleta and Hill City. Here's the thing. The gap represents two thirds of the sales of this new company. So two thirds of new company would have basically stunk. Meanwhile, if you keep scrolling down this deck,

You get to slide number eight where they talk about one of the fastest growing apparel brands in the U.S. And guess who they're talking about? Old Navy. Not the Gap or any of the brands that would have been in the new Gap company, New Co. So Old Navy was a shining star that didn't belong with the rest of the company. And that's why they announced the spinoff last year. So yesterday, the Gap announces they're no longer spinning off Old Navy because of cost and complexity. And then a surprising thing happened.

The stock rose. And the reason that was so shocking at Jack and I is because last year when they would have announced that they would do this, investors rewarded the stock, and it rose then too. Right. So the stock rose when they announced a split up. And then yesterday they said, never mind, we're not splitting up. And the stock also rose. It's like a couple of helicopter parents saying, Cindy, you got to break up this guy and we'll be happy. She breaks up with them. And they're like, why can't you bring him to Christmas dinner, please? They celebrated the breakup. They celebrated coming back together. So Jack, what's the takeaway for our buddies who seem a little

confused over at The Gap. Will 2020 be about clothing breakups or clothing staying together? Here's the thing Snackers, big fashion companies have been planning to split up or split up their best or worst brand all of 2019. L Brands is a company that owns Victoria's Secret and they're thinking about spinning off Victoria's Secret into its own company. VF Brands owns Vance, which is surging in popularity but it just spun off its Wrangler and Lee's companies into their own denim brand. And we all love Madewell jeans. Well, Madewell is actually owned by J. Crew, and J. Crews planning to spin-off made was. So we're wondering if Gap's reversal, whether or not it makes sense, could simply start a trend of canceling split-ups.

For our third and final story, China is holding German car companies essentially hostage. Yes, and the Chancellor of Germany, Angola Merkel, has a tough decision to make. All right, Snackers, we've got to talk about the laws of getting cut in half. Yes, it goes from six to three in Germany in the German car industry. Cut Jack of Card. Carter, that one. There used to be six German car companies, but now there are three. Volkswagen, BMW, dime, right. I know what you're thinking.

What about Porsche and Audi? We got you covered on that. They're part of Volkswagen. And what about Opel, which is kind of a blue-collar car in Germany? It got acquired by a French company. Now, here are a few facts you want to lay on you snackers. The first fact. Fact number one.

China is the number one buyer of all those three cars we just mentioned. Yes. Seven million German cars were bought by the Chinese in 2019. fact number two, Germany's other key relationship with China is with Huawei. That is the Chinese tech company that is pitching to install Germany's 5G internet network for the future. But fact number three throws a twist on everything we just said. The United States is pressuring Germany hard not to work with Huawei on privacy concerns and basically spying. And as a result, China's ambassador has said that if Germany ends up banning Huawei like the U.S.

asked for, there will be quote unquote consequences. There will be consequences, Germany, if you ban Huawei, and we know what those consequences mean. You can't see it right now, but Jack is doing some winks at me because those winks indicate China may stop buying German cars. So China is threatening to stop buying as many German cars, or maybe all German cars, if it bans Huawei like the United States is asking. Now, Jack and I are putting together the piece in all this, and what it looks like is how much of the world is economically dependent on China. This is an inconvenient truth of the West, and we got a few pieces of evidence. For one, Hollywood refuses to produce movies that are critical of China.

Look at Disney. They put out Avengers Endgame a couple years ago, and they got 600 million of box office sales in China. Let's look at the British soccer team, Arsenal. Arsenal is distancing itself from one player who was critical of China on social media. And then finally, let's take a look at the hospitality industry, airlines, and maybe Marriott Hotel. I'm happy to indulge. Both airlines and Marriott hotels have referred to Taiwan and Hong Kong by the wrong name. And the result? China is very sensitive about.

They got punished by China, basically cut off from China. And then, oh my God, the apologies. Well, all of these companies, whenever they mess up in China, they apologize profusely. So, Jack, what's the takeaway for our buddies over in Germany, China, and the U.S.? The United States is no longer the sole global economic police like it used to be. Hackers, yesterday we discussed with you the U.S. sanctions and how tough they can be on an economy. It's like getting grounded, but for the entire economy. You're getting, you know, your exports getting banned, banning imports, freezing bank accounts. It's not a fun situation for anyone.

But we're learning more and more that China's unofficial sanctions can be really bad as well. Right. If they stop, you know, buying German cars, that can mean the biggest buyer of your nationally important product isn't happening. Right. And soybean farmers in the United States are seeing that too. If China stops buying, it can really hurt your countries like national economy. That means companies are going to have to start to decide. Are they going to stay in good graces with the U.S.? Or with China? You can't get both, it seems. Jack, can you whip up the takeaways for us before the three-day weekend? Comcast finally unveiled details on Peacock, the 761st streaming service. But it doesn't want you to cut the court if you're already a cable subscriber. Second story,

The Gap decided it's staying together with Old Navy after a haul. Investors rewarded the break. up announcement and rewarded the getting back together? Announcement? Yeah. It's a strange story. Let's go with the third and final takeaway. Germany is in a Bavarian pickle. Classic.

It can stand by the USA or stand by China. There's going to be consequences either way. And it's not the only country that's going to face this Bavarian pickle situation. Now, time for our snack fact of the day. This one, a repeat snacker sending it in. Amelia Garland from Westport, Connecticut. Do not. Oh, my God.

Not to be mistaken with Eastport, Connecticut. happens all the time. People do that. Did you know the company Sprint, which is waiting for a judge's decision right now on whether it can merge with T-Mobile? You can almost hear a pin drop on this thing. Sprint is actually an acronym. It stands for Southern Pacific Railroad Internal Network Telecommunications.

We see why they went with Sprint. My favorite acronym? Scuba. My favorite acronym? Self-contained underwater breathing apparatus. I was going to say Scova, too. Snatchore for Duba. We are going to catch you guys on Tuesday after the MLK weekend.

Have a fantastic one. Jack, what are you doing? I'm throwing out my personal pint on Twitter and Instagram. Hashtag personal pint at Robin Hood Snacks. We're throwing the personal pints out there. We want to hear yours. Have a great weekend. This is Jack. Nick and I own stock of Lulu Lemon and I own stock of Volkswagen.

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 Mark. 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.