The Best One Yet - Pinterest’s 19% surge, delivery app wars hit a tipping point, and oil’s big day

Episode Date: August 5, 2019

Pinterest is defining itself as the most positive, happy, feel-good social media app — and usage is jumping. Delivery apps had their biggest week yet, so we jumped into it Snacks style. And oil icons Exxon Mobil and Chevron reported earnings, which reveal a “glut” issue in the whole industry.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 Monday, August 5th. Welcome back. This is a T-boy. It's the best one yet. This one's the best one yet.

Markets having kind of the worst one in a few months. Yes, the S&P 500 fell by 3% last week, the worst since December. Jack and I decided to jump in snack style, found some fantastic stories that we feel good about these. First up, delivery apps. There's a new report that shows 50% of our restaurant food orders are going to meet delivery or takeout by next year. We're breaking down the phenomenon. into fries and styrofoam cups. Second story is all oil and it's all the city of Houston, Texas.

Place to be on Friday. Chevron and ExxonMobil announced earnings. This was actually all about the natural gas glut. We're getting into gluts. We've never said that before, but we're getting into a glut thing. Third and final story is Pinterest. The stock surged by 20%. Can I just say, Instagram's thinking about killing the like Nick to reduce your social media

post-posting anxiety? Makes sense. Pinterest already did. and that says everything. We jumped into it. There's some interesting storylines here. Now, before we get into all that. Last week, we mentioned that two universities,

the University of Delaware and the University of Akron, are the only ones we can think up with female mascots. Then we heard from our snackers that they're actually like a couple, three, four, they're like a dozen other places that have female mascots. Now, the first category we're going to call the Happily Ever After in Love category. Gorov Menon let us know that UCLA actually has a nice couple. They've got Joe and Josie the Brew in a. their mascots. Congratulations to you too.

Jason Warner hit us up with University of Toledo in Ohio, which has Rocky and Roxy, both of whom are rockets. And then Lee Braun told us about the University of Florida, where this seems borderline incestuous, but there's Albert and Alberta the Gator. I don't know what's going on there. Nick, it is not incestuous. It's just pure green gator love. Now that's what's happening on like the romantic side. Then you've got the female only mascots representing their school. Yes. Vince Moraccini told us that the University of Colorado Boulders, you know how they have a live Buffalo that runs on the football field? This thing is literal.

That's a lady Buffalo named Ralphie. Not many people realize that. And then Alex Smith, Megan Gilar, and Austin Iski, apparently were outraged that we missed Ms. Rev, the collie representing Texas A&M. Here's the thing about Texas A&M. The studios are called the Aggies, but the mascot is a canine. It kind of messes with your head. Snackers, thanks for sending those in.

Now let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something illegal 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. 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. Robohood Financial, LLC, member FINRA slash SIPC. For our first story, Jack, hold the onions. We just hit peak delivery app insanity last week. it's official. This meal better come with Saracha. Now, we're talking about the big five delivery apps. Sorry, the big four delivery apps after news from last week. I like your correction there. Jack, can you walk me through what actually happened last week and give me an ETA? All right. Payment

processor Square sold its delivery app, which was called Caviar, to DoorDash for $410 million. If you're not familiar with caviar, the name says it all, that's the kind of restaurant that's delivering to you. Fancy, fancy food. Second story, Grubhub's CEO. Grubhub is based in Chicago, it yelled at its competitors like DoorDash and Caviar for just price gouging customers with hidden fees. And you know what we're talking about because there's like the service fee, the delivery fee, the tip fee, there's like a food fee and there's probably a fee fee fee. I can't keep track. It's mind boggling. It's frustrated. I can't afford it. After that postmates, which is the smallest of these delivery apps, it is reportedly trying to sell itself to Uber Eats.

And it was like planning to IPO later this year. Apparently that. That's on the shelf. And then, of course, there was that big New York Times report. A New York Times journalist went undercover as a DoorDash delivery guy and learned that the tips customers try to give them, DoorDash was taking them instead of giving them to the drivers. Now, a key element of this story is a lot of reporting that was done by the Atlantic. So let's get like the lay of the land when it comes to delivery land. Yes, the delivery apps are shockingly regional. It's like whether you're a Notre Dame fan, a Lakers fan, or a Yankee fan.

You got to have an allegiance here. You got DoorDash has about 34. of the delivery market, and it's huge in like Dallas and Houston. Apparently the state of Texas. Then you got Grubhub, based in Chicago, as I mentioned. Grubhub, the name sounds so like sausage and cheesy. Very much. I'm picturing something that's like hurting an artery. Now Grubhub merged with seamless back in the day, which was huge in New York. So Grubhub has 33% of the market, big in New York City. We can guarantee you almost that there's some investment banker intern right now who is ordering it at 2 a.m. whatever day you're listening to this day. All right, let's keep the show going. We got

Uber Eats that has 17% of the market and is big in Atlanta and Miami. And then you got Postmates, which has 11% of the market. And it's kind of just like a round. Well, if you're in San Francisco, you get all of these because most of these companies are based in San Francisco. Now, you're going to notice a trend here about everything we just said. All those percentages, there isn't like clearly a huge winner. It's a highly fragmented market. And that means consolidation could be coming to it. We expect consolidation to come because these companies are beating the crap out of each other with Just more and more promo codes. None of them are profitable.

And we think like the airline industry, mergers might be necessary to get profitable. If your Uber Eats, you can either fight to get up to 20% of the delivery market, or you could just splurge and buy postmates and get there that way. And then raise prices because there's fewer competitors. Very true. So, Jack, what's the takeaway for our buddies who are arriving in 10 minutes, allegedly in the delivery industry? Food delivery is a culmination of mega trends among millennials.

Get this. More restaurants than ever in the U.S. exist right now. Americans are spending more money on restaurants than they're on grocery stores. And over half of restaurants spending next year is going to be delivery or takeout, which is the record. Now, why is this all happening? I'll tell you why. Millennials, myself, please. You, Nick. I hear you. We're working harder than ever. We're commuting more than ever. And we have unbelievable streaming video options at home waiting for us to binge. Add that together, and I don't have time to chop the onion correctly and make sure that all the peppers are diced. I got to get it delivered. and I got to recycle everything after.

Can you believe this? Half of restaurant orders are going to be delivery or takeout next year. Eating is the new dining out. Now, we want to mention a big cost of this convenience. The massive amount of packaging. This is a sustainability problem with delivery, and we hope someone tackles it. Which you can reuse somehow.

For our second story, ExxonMobil released its earnings last week, and it pretty much bummed everyone out before the weekend. I felt like I was watching Friday night lights reading through this report. So many West Tech. Texas towns were mentioned. Yes. We're talking like Odessa, Midland. Remember that scene jack?

Friday night lights? You're from Midland. You're from Midland, right? Remember it fondly. Now, for some time, I remember when ExxonMobil was the most valuable company in the U.S. It got overtaken by Apple and... But still, huge company.

This is Houston's pride and joy. And the stock, you know, they had some good news, at least yesterday. The good news was that oil production for ExxonMobil has, like, doubled. There's like one area in Texas. It's called the Permian Bay. basin and it sounds exotic, they doubled the amount of production, the amount of oil coming out of there. We're calling the Permian Basin, the gas gorilla, like the cash cow for Exile Mobile. There was also some bad news. True. The price of oil and natural gas happens to be way down. And there was even more

bad news. Right. Profits fell 21% because if prices are down on oil that you're selling, you're making less profit on. Now, I jumped into this earnings report and I'm still rushing from the adrenaline. We can't, Jack's got to relax over there. This thing was like a jet-setter geography game that was curated by Indiana Jones. ExxonMobil is active in like the most dangerous and treacherous parts of the world. It's doing exploring, drilling, extracting natural resources in places that are like, you do like a Nol's trip there, an Arctic trip, a semester abroad, you come back, you're a changed person. What Nick's describing there is called ExxonMobil's upstream business, and they had three bullet point highlights that they highlighted. The first one is the discovery of a deep water

oil jacket off of Guyana and then one off of Cyprus. which just sounds wild. A second is their Mozambique liquid natural gas project that sounds highly dangerous. And then the third one, this was just wild. This was like particularly highlighted. There were no earthquakes in Papua New Guinea like there were last year. So that's a good thing. That's a plus. Now the second part of their business, slightly less dangerous, but still like a thing. It's called the downstream business. Right. This is like the processing, the refining, the selling the gas to you as a person. This is what converts like the black fossil fuel into gasoline that your car can drink and digest. Not as fun as like the find yourself trip to the Antarctic to like drill.

So Jack, what's the takeaway for our buddies over at ExxonMobil? Too much of a good thing isn't always a good thing. There's one thing that's the enemy of big oil and that's oversupply. ExxonMobil's problem right now is one ugly word. It's called glut. It means a massive supply when there's more than you need of something and it causes prices to fall. In this case, liquid natural gas. It's being explored everywhere.

So the good news is that because liquid natural gas burns cleaner than coal, it's a cleaner type of fossil fuel. Yeah, we're warming the globe slightly more slowly, which is good. Also good, there's so much of this stuff in the world being extracted right now. It's lowered the cost of energy and electricity for everybody. Now, the problem, though, the bad for oil companies is that prices are way down on this liquid natural gas. This is what the company sells, and it's not good if the prices are low.

Exxon lost $600 million last quarter alone because the price it sells natural gas at fell by 10%. Too much of a good thing. Our third and final story is just stunningly beautiful. Pinterest surged 20% after its earnings report because it's become like the nice guy of social media. Well, we're T-minus two weeks from the Kramer Kravici wedding here. I know, man, I know. And I went off Pinterest for the signature cocktail. It's a big surprise I'll tell you after the wedding.

How are you supposed to know to put lavender in there if you're not on Pinterest everything here? Now, the number of pins in this earnings report is pin worthy. We're talking about the core numbers here for Pinterest. Monthly active users surged 30%, and they now have 300 million. Pinterest is like a 13-year-old company. That is a lot of growth for a company this old. It's like his chest hairs are growing chest hairs. The second puberty here.

A lot of nice round numbers, a lot of big threes. Revenues leaped. percent higher in the second quarter. This is our amazing stats. And this is basically just ads, which are known as promoted pins. Right. On Instagram, they're like promoted. They're right there in your scroll. On Pinterest, they're called promoted pins. Same story. They're kind of sneaky. It's a highly visible platform. But we noticed an interesting theme last week for Pinterest. It was just all very happy rainbows and positivity. Well, shortly before the earnings report, Pinterest came out with its wellness initiative. Basically, if you type stress or work anxiety, which we all have,

into Pinterest, they have curated guides to help you relax. The kind of thing that's going to walk you through, you know, oh, maybe I should like sit down, be mindful, breathe, and pause for five seconds. Picture a turtle giving itself some me time. So the other fun thing about the earnings report was that it's just like simply a fun earnings report to physically go into snack style like Jack and I do. A lot of earnings reports are just miserable, small font written by lawyers. Pinterest was not. No, they're usually like forward-looking statements or like not held liable for us.

This one begins. If you go to it, it's an incredible earnings report at the very top with a profile of an actual Pinterest user whose name is Milan and she lives in France. Yeah, you get to see the boards that she has created on her Pinterest like skirts, looks a lot like Christmas, healthy things. This is a little bit voyeuristic, but I liked it. It's true. She said Pinterest helped her decide on her tattoo game and some other big things she were doing, probably a lavender signature. And as we mentioned, in 2017, Pinterest killed love like button. So take the last couple of things we mentioned about Pinterest and compare that to all the big tech hate out there right now. Google is getting assaulted by European regulators for antitrust.

Facebook's getting hit everywhere because of privacy issues. Instagram is causing social problems because you've got fear of missing out and you're comparing your lifestyle to Insta celebrities. And then Twitter and YouTube are just dealing with hate speech on hate speech on hate speech. So Jack, what is the takeaway for our buddy? just having a good time over at Pinterest. This is all nice, but Pinterest's future is e-commerce. It's not even social media. We found a wild snack about Pinterest. 90% of weekly pinners use Pinterest to make purchase decisions, which is higher than any other social platform by far. Yes, Pinterest is about

product discovery. A lot of people use it for weddings to find things they need to buy for the weddings, like a table set. Case and point. Boom. Not the case as much for Insta, Facebook, and Twitter. Right. So Pinterest is capitalizing on that. shopping intention that users have when they open up the app to get some e-commerce going. Jack, can you whip up the takeaways for us over there? The delivery economy is the culmination of a bunch of trends and half of restaurant orders are going to be delivery by next year. You can thank TV dinners. They're back. So is streaming. It's a wonderful combination of trends. Second story, ExxonMobil is selling more oil and natural gas, but at a lower price.

Gap your idea for everyone. Join a like random rigging crew in the north of something. Sounds very exciting. Third and final story. Pinterest users and revenues boomed last quarter as it avoids the negativity of social media. Full online shopping, that's the goal for Pinterest in the end. Now, time for a snack fact today. This one sent in by Mark Scalzo in Weathersfield, Connecticut, the land of Hartford. In 2017, which is the most recent data available, the United States managed to cut its carbon emissions by the most of any country in any year ever. And this is with the United States even leaving the Paris Climate Accord, which is an incredible thing that they were able to pull this off. Awesome to see that like states,

cities, and companies are taking action. Snackers, you look great to start the week. We know it's a Monday, but you put everything together nicely. We'll see you tomorrow. Today was great. Can't wait. 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, 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.