The Best One Yet - Peloton gets no love for its Personal Record, Wag wants to sell itself, and Match expands international (hard) with respect

Episode Date: November 6, 2019

Match Group shares dropped because it’s not as ambitious about the upcoming holidays as investors wanted — so we looked at Hinge and its adorable new mascot. Peloton’s numbers outperformed what analysts expected, but the stock still dropped because Wall Street can be irrational. And Wag is our “Almost Unicorn of the Day” whose jumbo fundraise from a key WeWork investor hasn’t helped.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 Wednesday, November 6th. Snackers, I am pumped to be on this pod. We feel fantastic. Stocks remained at a record high, and this is the best one yet. It just so happened. Yesterday's was pretty good, but this one's better. Pelotam, we interviewed the co-founder a couple months ago, but they just did their first earnings report since the IPO. It feels like it was yesterday, Jack. The stock dropped because investors are kind of a rash. Sometimes it doesn't make any sense. Second story, though. Match is tired of you talking about Tinder. It has a lot.

other dating apps, so we're going to talk about the other dating apps. Even though Tinder pretty much makes it most of its business. Third and final story is the pre-unicorn of the day. It's called Wag. Beautiful name. The Uber for Dog Walkers, it's on tough times. Yeah, it's actually not a fun situation. It's trying to sell itself and kind of like, you know when you move out of an apartment,

you've got to get rid of furniture fast? Pretty much tough situation. That's kind of how it seems at Wag. Except it's hard to give away the dog. There are a lot of emotional elements to this thing. But before we hit those stories, we have to talk about Apple and it's Chinese knockoff competitor, Showman. Right.

Because if you're ShowMe, you're a Chinese tech company that happens to be doing a lot of things that look kind of Apple. Well, they make the same kind of products. They make a smartphone. Yes. They just launched their smart watch yesterday. And Jack and I got curious. We checked out this smart watch and what do we think was going on when they designed this show me smart watch? You know Michael Scott?

He's like, conference room now. I have one instruction for the designers and engineers. Team, what do we got to do? Make the Apple Watch, but for half the press. And then they get the marketers in there. They're like, hey, marketing team, how are we going to push this thing? We're going to call it an Apple Watch, but for half the press. Pretty much. Jack and I are staring at this thing.

It's kind of like when you meet twins for the first time and you're like, are you Julie, are you Jess? Which one's got the mole? I never understand. It's impossible to distinguish. The watch is called the me watch. Okay, so it kind of sounds like an eye watch. But it's M-I, exactly. So if you erase the M, it actually is called the eye watch. Jack, how about the size of the watch? Same. Forty-four millimeter wristband, too. How about the shape of the watch?

Same shape, same button, same everything. Even the little grooves that give you a little friction when you're flicking the button on the half? Watch? The only difference is the operating system. This runs on Android, which is at Google. You cannot tell the difference between the two. Jack and I have posted them up on our Robin Hood Snacks, Twitter. See if you can tell the difference. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. It's 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. You know, we're not recommending any securities. It's not a research report or investment advice. Not an offer or sale of us.

For security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC. Member Fenra slash SIPC. For our first story, Jack, stretch out the glutes over there. Investors just ruined Peloton's first earnings report, basically by being kind of irrational.

My hamstrings are so sore right now. I did burpees the other day. Why am I doing burpees? Who does burpees these days? My wife made me do it. I think it's like an 80s thing, dude. It's actually part of the toned up, like, 30-day challenge, which apparently I'm in the middle of.

So Peloton is the subscription home bike for $2,000 and then $39 a month to have an instructor yelling at you through the screen at all. You liked going to SoulCycle, but then you were like, the classes were fun, but I didn't like the walk over to SoulCycle. Now, LifeHacker, you can get a Peloton for, I think, $59 a month financed, and then for $39 a month a subscription, that's less than $100 a month. You might have like a corporate wellness plan that could pay for your Peloton. Keep in mind those monthly payments sound nice, but this is a, $1995 bike. Yeah, but I asked somebody at Robin Hood, they said it might be expensive. You can probably expense anything if you justify that it makes everyone's life better.

All right, this has been a great tangent, but let's get to the actual news. Stock was $25 the other day. On Monday, the stock was $25. It was a nice time. It was enjoying life. It was just hanging out. Now, investors knew that on Tuesday the third quarter earnings report was coming. The first earnings report for Peloton as a publicly traded company.

So analysts, you know, end up looking in their crystal balls to decide, you know, what are the numbers they're expecting or going? going to come out of this earnings report. There's a few dozen people who work at investment banks whose job it is is to predict the earnings of Pelotan. They're calling on their industry knowledge and then they got a bunch of interns who are pulling like all-nighters to put together the final presentation. So according to their spreadsheet, Pelotan was supposed to make $199 million of revenue last quarter.

And they were expecting 544,000 streaming subscribers. And then we're in the middle of the fourth quarter now, but Pelotan was expected to predict 100,000 new subscribers would be added this holiday. period. Okay, so that's what they were thinking. That's what the crystal balls were showing. Those were the key numbers. Based on those expectations, the stock was $25. Then the earnings report actually happened yesterday. So Peloton first, and I peoped a couple months ago, first earnings report, it comes out what ends up happening. Peloton exceeded those expectations in all three of those captains. Except here's the situation that ended up happening. Let's say your mom and dad are pretty cool and they're like, hey, it's neat if you're just a B-plus B student.

You came home with an A straight-a earnings report. You're like, boom. Mom and dad, I assume I'm getting my own car. Here's the thing, though, the stock fell for Peloton after crushing it and beating expectations. This is like mom and dad saw those straight A's and they were like no dessert for the next six years. Even though I deserve double the dessert because I beat expectations. Now, we know what you're thinking. What is the Peloton team thinking? Well, the CEO summed it up pretty nicely.

I can't explain it. It's a head scratcher. I don't know why the stock is there. Literally, he said that, including the word head scratcher, which is just a charming word. So, Jack, what's the takeaway for our buddies? over Peloton. Peloton has to choose between growth and profits. It chose growth last quarter.

Right. This is a classic trade-off situation. The company lost $50 million last quarter, which is the only thing I can identify in this earnings report that would cause investors to be upset. But the CEO then said, I believe if we pull back on growth, we could be profitable tomorrow. Right. So he's like, I could be profitable everybody.

Like, I could cancel our TV ads. I could fire salespeople who are trying to sell more products. and like I could cancel the plans to open new stores, and then we'd be profitable. But then he's saying, if I did all that, we wouldn't be growing. We wouldn't be growing. So investors, what do you want? Like, us to spend money to grow because we're still a young company. Make up your minds, people.

Or, like, stop growing and start harvesting profits. The CEO seeing this as a tradeoff, and investors are saying, yeah, we'd rather see profits. Yeah, right now profits are in. Yeah, profits are the thing to do. For our second story, match. the stock just drops 17% and it's the owner of Tinder, but we're not going to talk about Tinder.

Well, first of all, don't mess with Match Group. Don't even think about it. They have trademarked the word Swipe. Don't even say it, Jack. I have to say it for the pop. We're going to get sued here. I know. They have also trademarked the word swipe right.

Because, you know, credits to Match Group. Congratulations on that one, Match Group. Your lawyers are all over this thing. Now, Nick, we can't talk about Match Group without mentioning Tinder. Fine, we've got to talk about Tinder. Two things. Quick, first. Growth.

It added 4303. 37,000 active Tinder users just in the United States. That's like half the population of San Francisco. And that was just over three months. Also, half the population of San Francisco is pretty sure is single. Now, there are 5.6 million global active Tinder users right now. This is a nation. It's a nation.

And people are leaving Tinder, you know, once they stop looking up. But here's the stat that Jack and I thought was wild when we saw it. The obsession with Tinder. Well, the improved obsession. 30% more users are logging into Tinder every day. Seven days a week. single day. What does that mean about society? What does that mean about T-Wi-What does that mean about Swipe? I guess that's why they copy rights. Nick, we're both married. We can't really speak to this

subject. All right. So we're done talking about Tinda here because we always end up talking about Tinder and guess what? Match doesn't want you talking about Tinder right now. Well, it has 45 other other apps. No big deal. There's one company that basically controls all of the dating apps. If one of the dating apps doesn't work for you, don't worry, just like Mom always said, there's plenty other dating app fish in the sea. Well said, actually, there's also Facebook. We forgot to mention. Facebook has a dating feature now. So as part of Match's earnings report, Jack and I jumped into the Snacks. We love how they put together, no pun intended, like an actual presentation.

Yeah, no. Some earnings reports are just letters, ugly PDFs. Jack and I need like prescription glasses to get through these things. This one is a good looking, attractive, well-rounded keeper. Now, this is what Match wants you to know. It's got so much more going on. Case and point, hinge. It owns 51% of the other dating app, the one that's not focused on hook.

and is being marketed as a relationship app. And Hinge is doing great. You know, it's been fine. It's been working out. It's been taking care of itself. Three million people have downloaded the Hinge app already in 2019. So Match is like, hey, Hinge is doing pretty great. By the way, investors, we're going to try to monetize Hinge with some premium features soon.

Yeah, they have the free feature that anyone can sign up for. But Tinder is doing a great job, like taking money from you here, taking money from you there, like letting you, I don't know, do all sorts of crazy things. Whatever it is that kids. are doing these days. Jack's freaking out over here. Now, by the way, Hinge, can we talk about Hingey? Hingie is an adorable mascot. This was

the Halloween costume that didn't happen, that should have happened, so write it down, keep in your Apple notes, and do it next year. This is a mascot that is shaped like the app you see on your phone. It's square, it's white. And it's the little letter H, which is Hinge's... It's furry. It's adorable. It almost looks like an emoji, but it's supposed to represent Hinge as an app.

So here's the thing. When you download Hinge, you're trying to get into a relationship. Right. And if Hinge does its job well, you will get in a relationship and then you'll delete the app. So as part of this ad campaign, as Hinge the app sees you getting in a relationship, it slowly starts dying, which is kind of dark. I know, it's pretty funny. Because, like, you want, you know if there's a couple that's happily ever after,

but you're sad about this little app that's getting killed. This feels like a Shakespeare play where it's happily ever after in the end, but someone loses like a limb. It's a nice little schick by Hinge. It's kind of adorable. So, Jack, what's the takeaway for our buddies in love over at Match? Well, Tinder is everywhere in the United States. International is the opportunity.

And guess what about international? You need product localization. Exactly. All right. So look at the sales numbers. And North America, Matches sales grew 11%. But internationally, they searched 29%. Why is it doing so well internationally?

Because it's being sensitive about local dating cultures. Remember when Uber went international? They just barge their way in everywhere and put people out of jobs who are local taxi drivers. And they got a lot of hate for that. But Match is taking a much more. strategic approach that's a lot kinder. Case in point, the way Match is approaching India as a new market, which, by the way, has a billion people there.

And happens to be a place where there are a lot of arranged marriages and a lot of relationships happen to be arranged as well. So Match is doing this very sensitively. They are respecting local cultures, and they probably have a lot of locals advising them on how to roll out in India. One thing they're doing, they're making their profiles have deeper information on people who are on-matched products so you can feel more comfortable with who you're potentially dating.

And guess what? Downloads? There were 1.4 million of them in India last quarter. A huge surge, because Match is going abroad with respect. For our third and final story, we've got a pre-unicorn of the day situation. Dog walking app, Wag. Great name over here. Is so desperate. It's trying to sell itself. Anyone. It's putting itself up for adoption. We got a lady in the tramp situation. Wag is like Uber, but for dog walkers who carry on those little poop bags.

Or is this like a roll over Beethoven situation? I don't know. I kind of lost track with all these. Now, last year we covered Wag on this podcast, and we covered the Wag versus Rover arms race. This is like your dog versus your cat person getting into an argument. You can find both these companies in the app store, both cater to high-income French Bulldog and Labradoodle-owning parents. We know why you got that Shibuino.

You got it for the gram. Here's the reality, though. You're not walking that thing at two in the app. No, no, you're not. You're busy with that marketing job. You are opening up your app and you're finding somebody on Wag or a Rover. to walk the dog. This pretty much exists for our generation that loves things visually.

Not so much a fan of the responsibility. No, we don't want the responsibility. Or we prefer efficiency. We prefer efficiency. Okay. Let's go with that one. All right. Whatever makes you sleep at night.

Let's take that one. The business model is simple. The dog owner pays the dog walker and wagon rover both take a cut of the deal. Then they've got these great commercials promoting it. A walk it out. A walk it out. Jack's moving his hands over here. I'm dancing.

This is a great commercial that I saw on Hulu. The only thing I still see ads on. We don't actually know if this is a commercial for a rover or for Wag. I can't remember, but it's a bunch of dog walkers, like, really busted a move. The bottom line is they want to get used to the idea of just having a stranger walk your dog instead of you or a. So we learned this week from some reporting from the Wall Street Journal that Rover is winning in this battle against Wag, and it's winning big. And it turns out that Wag has an investor that's been pumping it up with cash to try to get it over this hump. You might have heard of Wag's top investor.

It's called SoftBank. This is the Japanese VC firm that also invested in WeWork and then bailed out WeWork. Here we go. Another SoftBank invested company that's experiencing layoffs, poor growth. Not fun. And this one's unique. Yeah. Dogs running away.

This is a literal situation. Can we talk about the Houston couple that has this pure... Sorry. It had a purebred wheat and terrier. This is a sad story. We just gave it away. Gorgeous Wheat and Terry over here. I don't want to laugh anymore.

But they used Wag to walk their wheat and terrier. And they didn't get the notification you typically get, which says like, hey, your dog just got returned, poop twice. The reason why the dog got hit by a car. It's a sad story. And then Wag offered the couple, the devastated couple, $188 to never mention this in public ever again. We almost didn't put this on the pond because we were so upset. $188 merely covered the cost of cremation of that sad little dog whose name was Winnie, which is also a great name for a dog. Okay, sad story.

But last week there were rumors that Wag is in so much trouble, it's looking to sell itself. Now, Petco is a potential acquire of Wag. I know what you're thinking. They could easily just merge with Rover, right? Like kind of a lift merging with Uber fantasy here? Turns out Rover's like, hey, we're not really interested. We're doing our own thing over here. Yeah, we respect dogs.

We don't pay $188 to silence you about their death. So, Jack, what's the takeaway for our buddies? I don't even know why I use that word over at Wag. With big money comes big pressure to grow. Wag wanted to raise $75 million in venture capital funding last year. And then SoftBank insisted on giving it $300 million, four times more money than it was asking for. Turns out that may have been too much money to have raised

because suddenly it had huge pressure to grow to meet the valuation that fundraising had caused it to get. Let's say Wag's plan was to expand to like three big cities that love dogs. Suddenly, because of all this money it's flush with, the pressure and the expectations that it should like expand to like 20 cities. So much pressure that they stopped like dealing sensitively with its customers that sadly had accidents like the dog Winnie Dying. That investment round from SoftBank ended up changing not only its culture, but potentially the entire strategy behind

Wag. There is such thing as getting too much funding money too early too soon and that's happened with a lot of SoftBank companies. Turns out the latest one, Wag. Jack, can you whip up the takeaways for us over there? Investors were expecting Peloton to get straight. B's? It got straight A's. But the stocks still dropped because investors are obsessed with profits. And it's not making profits. There's a tradeoff situation here. Match Group's huge opportunity is international and it's treading delicately. When you find Mr. or Mrs. Wright, a hinge app finds its death. Wag is reportedly trying to sell itself. It's too much funding from SoftBank may have contributed to this entire downfall. All right. Now, this snack fact of the day is pretty wild.

It's about the German stock market. Okay, let's talk about the value of Germany's stock market here. It is just over $2 trillion. With the T, big number sounds large. We're talking about the entire stock market. That means every stock of a German company listed in Germany, if you took it all and put it into one giant wallet,

that wallet is worth just over $2 trillion. Ficturing a George Costanza situation here with like a hernia-esque, you know what I'm talking about. Yeah, puts them on the slam. There we go. Now, here's the thing. In America, we have two companies, two companies that are worth the same amount as Germany's entire stock market. First one,

Apple. Second one, should we let Snackers guess? I think they're now. Turn to the one on your right. Ask them. It's the only other platinum platypus that's worth over trillion dollars out there. It's Microsoft. Apple and Microsoft are worth just as much as Germany's entire stock market.

Snackers. Everyone loves a good comparison. Quick context? Yeah. In Germany, you kind of stay private. Like, you have a lot of mom and pop companies that just aren't interested in the IPO. Americans like dream for the IPO. In Germany, you don't dream for the IPL.

Not a thing. Snackers love having you with us. today. Should we do this tomorrow? I'm in. Jack, we're in that sweater? This is actually the same sweater. Jack's won the same sweater twice and wrong. It's okay. 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

Thank you.