The Best One Yet - Pinterest’s 1st earnings report, TikTok’s is top downloaded app (again), and a brand new stock exchange is coming to markets

Episode Date: May 17, 2019

There’s a theme to Pinterest’s first ever earnings report: Slowing. TikTok is the Chinese app that just hit 5 straight quarters as the most-downloaded in the app store. And Long Term Stock Exchange is actually a brand new stock exchange with a very particular mission.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's the end of the week. Friday, May 17. What about this one? This is the best one yet. I can't believe it's the end of the week. It's pretty quick. This is way better than what we put together on Thursday. Beautiful stuff. Markets rose. They inched up a little bit higher. Basically, there were no new tariffs announced, which was good news. We're almost back where we started the week, which is a beautiful thing. Now, three, what a mix of stories we got here today. It is incredible, like a buffet. What do we got? Let's kick it off with Pinterest. Welcome. to the stock markets, it made its first public earnings report yesterday. Wasn't good. Summing it up in one word here, Jack, uninspired. Such a perfect word to describe Pinterest earnings. Second story is TikTok. This is a Chinese app that is continuing to be the top downloaded app in the app store again. Big win for your karaoke game. Big win for teens getting away from their parents. Third and final story, we have a new stock exchange. It's company. Is it a boy? Is it a girl? I don't know. It's the L-T-N-S.

It's the LTSE super directly named the long-term stock exchange. God, get a little more creative with that. This is the 14th stock exchange in the United States. We're going to break down why it is important. But before we get into all that, Jack, can you throw a little extra cheese on this situation? The world as I know it has just got extra spicy because Taco Bell just opened a hotel and resort. Get this. It's The Bell, a Taco Bell hotel and resort.

Also, like future honeymoon destination? What do you think? Absolutely not. Do not go to your honeymoon here. But it is in a honeymoon-style location, Palm Springs, California. And it's calling this hotel of the Taco Asis. And there's a reason for that. If you jump in there, you are going to be indulging in some enchilada-themed hotel rooms. And Taco-inspired pool-side cocktails. They didn't give us any samples, or we would tell you about them right now. I'm going to go up on a limb here, and I'm going to say Doritos Locos daacaries. They also have an entire merch store, which is full of like a towel and a beach float that is shaped, just like one of those. medium spicy taco sauce packages. Now, you probably want to jump into this thing ASAP or completely avoid it. Either way, you'll have to wait till August 9th.

But also, wait till Coachella, because this is Palm Springs, California, right outside the bougiest music festival in Zavold. But the big question is, will Robin Hood's travel team approve this expense to report for Robin Hood snacks to go to Coachella to Taco Bell next year? We're just going to lay that one out there. In the meantime, listen to these keywords. You're tuned in the snacks daily. We spoke to the lawyers and we got to get some illegal out the way.

For snacks about to hear ain't food, it's 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.

Robohood Financial, LLC, member FINRA slash SIPC. For our first story, Pinterest just announced its first earnings report ever. And then the stock like plummeted 17%. It was like, it was an awkward situation. Yeah. Yesterday Pinterest was worth as a company more than Lyft, but no mass. Not after yesterday's 16% stock price drop after this earnings report. Now, classic Pinterest style, Jack and I went in there visually searching for a theme.

We're like, is it red? Is it blue? Is it colored? Is it plaid? The theme we discovered, what word Jack? Slowing. Yes. Everything slowing.

Slowing is the new black. Revenue, users, and profits at, Pinterest. They're all going in the right direction, but growth was slowing, slowing. Slowing. Now, despite those slowdowns, the interesting thing about Pinterest right now is it is determined to find a niche in social networks, and it's found one. Now, Pinterest is still such a young publicly traded company, and its user base is so particular that we still feel the need to describe what Pinterest is to you. I think these are very high-level descriptions, but I like the tone of what they're going for.

What we got here? Let's go macro. Please. Pinterest calls itself a visual discovery engine. A visual discovery engine. And then we connected with an engineer used to work there. I kind of like the way he put it here. I liked the layout.

I like the look. Online repository of ideas. If you look Miriam Webster, that is a correct definition of what Pinterest is. It has 175 billion ideas out there, aka Pins, and they're all designed to inspire you if you're trying to figure out what wedding suit to wear like I was this weekend. If you're trying to put together a floral arrangement, I don't go anywhere before I can sold Pinterest. Now, 80% of its total audience is mothers between the ages of 18 and 64 in the United States. That's a very particular user base. And that's been a key driver for what's so unique about Pinterest because it's not

like other social media. It's not like an ugly place where you're commenting on how much you hate everyone. No, it's not the horrible internet that we hear about on Facebook and Twitter. Pinterest is for aspirational content, and it doesn't have that dirtiness. So we're talking like kitchen stenciling. You're not going to rip on someone's kitchen stenciling because we all appreciate a good kitchen stencest. Right. So Pinterest isn't a threat to democracy, like some of those other platforms. It is a threat to bad wallpaper.

Exactly. It doesn't have the dirtiness that Facebook and Twitter are dealing with. So, Jack, what's the takeaway for our buddies over at Pinterest? Facebook is way, way, way better at making money than Pinterest is. get this stat. Facebook earns 10 times more per user than Pinterest does. Yes. Now, Facebook obviously has way more users than Pinterest, like $2 billion versus Pinterest's $200 million, but it makes 10 times more revenue per user. So Pinterest makes $2.25 per American user last quarter. Meanwhile, Facebook is earning $30 for every North American user, including the Canadians in there. So you could make a

pessimistic take of that differential. there and you could say advertisers hate Pinterest or Pinterest ad salespeople are just terrible at making money. Or you could like say it's a sunny day outside, take an optimistic take on this thing and say, hey, Pinterest, you've got a lot of room to grow your ad sales. Yeah, you haven't even hit your growth part yet. You can grow up and become Facebook size moneymaking machine. And if you're feeling positive, you can take that quote, turn it into a meme and pin it up on Pinterest. For our second story, the most downloaded app in the app store for the fifth straight quarter, is TikTok, and you got to know it.

TikTok is the app that you can star in your own music video. We're talking karaoke meets Snapchat. Jack, Jack, Jack, take me back. What am I thinking of? What are you thinking of, like, Circa 1.30 in the morning six years ago? You're thinking of Avenue A meets Fourth Street in Alphabet City of Manhattan. 3 a.m. Tiny dancer.

Tiny dancer. Tiny dancer. Tiny dancer. It's always tiny dancer. the night away. Now, that's because this app captures karaoke and creates a Snapchat-like experience with it. It had 12 million downloads, which is the most of any app on the Apple App Store last quarter, and that's ahead of YouTube. And then it's ahead of a bevy of Facebook apps, like Facebook, Instagram, WhatsApp, and Messenger. So the top 10 apps, we basically have a bunch of apps owned by

Facebook, a few owned by Google, and then TikTok. And by the way, pro tip here, if you're getting involved, because we've downloaded the app Jack and I, you got to have like a distinctive thing if you want to go viral on this. Elton John had those crazy sunglasses that were shaped like stars. You got to have something like that. Yeah, all I've got is like an Everlane T-shirt, so I need to work on this thing. Now, our theory on why this is so popular

is that kids just want to be a place where their parents aren't. When I was in college... That's the key. When I was in college, Nick, that was Facebook. Then it became Instagram. Then you moved over to Snapchat because Aunt Debbie was on Instagram. Right. Aunt Debbie, Jackson is like tagging me in photos.

I've never even met the woman before. Now, the background on this app is fascinating, so we jumped in snack style. TikTok is owned by China's Bite Dance, which is the second highly most valued tech unicorn in the world. Exactly. It's got a billion users and it's worth about 78 billion dollars, which sounds kind of familiar, Jack. That was the IPO valuation that Uber was aiming for. So this is as big a deal as Uber. Now, it was launched in 2016 in China. It only took like 200 days to build and it had 100 million users within the first year. Now, what we're describing TikTok, it's a digital playground of karaoke video musical madness. And that would not fly

in China, which has a very strict internet censorship rule. So the parent company, ByteDance, has a separate version of the app in China that's actually censored and even like pushes some government notifications to users, which is a little concerning. So it's kind of a propaganda tool for the Chinese government. So Jack, what's the takeaway for our buddies singing away over at TikTok? TikTok embraces everything about tech that we're afraid of right now. It's basically like taking every negative aspect of tech you've heard about in the news lately, and it's bundled it into one like feed for your face. Okay, fear number one, data privacy.

It uses your data to massively like curate a specialized news feed full of your taps and your likes and your listens and your watches. And then there's this pressure on US apps to like limit screen time for the kids these days. TikTok is like making none of those efforts. Yeah. Speaking of the kids these days, it actually was fined by the FCC recently for collecting data on children as young as like 13 who were using the app. And then every tech leader's worst nightmare, it was actually banned in India for a week because it had illegal content and porn on it, which that can really hurt your download situation. So we actually expect that five-quarter streak of top download in the world to probably end because India is a pretty big country.

For our third and final story, this one is exciting and new. A brand-new stock experience. Exchange creatively named the long-term stock exchange. Short for LTSE. I like what they're doing there. It's the 14th in America, just got approved by the SEC, and it's going to open for trading later this year. We got to send these guys like William Sonoma gift card. Like, welcome to the world. Congrats on the new baby.

Also, stock markets, welcome to the West Coast. This thing is based in San Francisco, unlike most of the others based in New York. So there's going to be way more bevy sparkling water machines. Very curious what like the food situation is going to be. How much is that fridge going to be stocked with Shibonis? So Snackers, there isn't a big difference from an investor perspective, whether you list your stock on a New York Stock Exchange or NASDAQ, but there will be for LTSE. This is totally new. Now, it's entirely focused on one concept, which is short-termism. It's focused on killing short-termism. Most publicly traded stocks, they all have to report their earnings every three months, every quarter. We talk about it every quarter on snacks. You know it. We just discussed it with Pinterest. And it means you have a quarterly mindset. So if you're like Pinterest executives, you're like,

oh my God, oh my God, we're just reported earnings. We just reported earnings. We got to report earnings in like three months. Yeah. We got, schedule the meeting, Joey. Schedule the meeting. Executives can become obsessed with meeting quarterly profit expectations. And it drives short-term thinking. Now, Uber and Lyft, great case studies in this because as soon as they jumped into the markets, they've been hit hard by investors who have a short-term thinking mindset. So the CEO of Uber, Darakos Rashi, he sent a letter to all the employees said, hey, don't worry about this short-term noise. Focus on long-term success. And that's exactly what LTSE is trying to do. Boom. Served it up perfectly. The exchange is trying to crush short-termism. Now, how are they crushing short-termism? Basically

in three different ways. First, they have seniority-based voting. One share does not necessarily equal. one vote. Each share has more voting power the longer it's been held. So if you've had a share for five years, maybe you'll be five votes. And then for the second thing, they're going to tie executive pay too long-term metrics. So they're expecting not to see executives running away with more money than like the companies. And finally, companies are not allowed if they're listed on LTSE to give quarterly earnings guidance to tell investors how much they expect to make next quarter. So Jack, what's the takeaway for our buddies now on the West Coast over at LTSE? LTSE is trying to squash activist investors from the equation.

We're talking about hedge funds, big investment firms, any of the sharks out there who just want short-term wins. You've seen it before. We've talked about it on snacks. These funds, they acquire just enough shares to matter, like 5% or something? 9%. 8%? 8% and then they force management to change.

The stock price might go up, and then they'll sell their stock for a win. And they do this in a bunch of ways. Maybe it's cost cutting, you know, for one quarter. It could be less R&D spending because I want more profits now. Or they just say you guys can't own any more off-sites using the company money to fly over to like the new Taco Bell Hotel. It's brutal. A lot of times it results in brutal employee morale. Sometimes this can be good.

Like with the Olive Garden, the stock is way up because of activist investors. And then sometimes it can be bad like with Kraft, which thoughts budget slashed and then people hated it and then they started making up numbers. I'm a big fan of LTSE, though, because long-term thinking is what, makes like great products and good innovation. Although it does make the quarterly fun of quarterly earnings a little less fun. What will this mean for a podcast? I don't know. Jack, can you whip up the takeaways for us? Facebook is embarrassing Pinterest by making so much more money than it. And if you don't know what kitchen stenciling is, now you know what kitchen stenciling is. Second story was TikTok. It is embracing everything that we're afraid of about tech right now. And that's partially

why your parents are not on it and may never actually be on this thing. Third and final story was the long-term stock exchange, directly named LTSC. And it's boxing out and trying to squash activist investors. That's time for our snack fact of the day. A great one sent in by Ramsey Abdul Amit, which Ramsey, this one was, were you like channeling us the other day? Only a California guy would know this snack fact of the day, actually. Agora Hills, baby, Agora Hills.

Agora Hills, California. So he tells us that the first Olympic team sport debuted at the 1900 Olympics in Paris, France. Very nice. And it was? It was water polo. Boom. He says it's a big thing on the West Coast. I guess not on the East Coast. Look, honestly, I've seen this Rumsie a bunch.

It basically is just, it's hockey on melted ice, and I think that water poloers have to embrace that. All right. A couple other big stories yesterday. Check out our newsletter to learn about Sony and Microsoft. Former PlayStation and Xbox rivals are teaming up on video gaming. And then Goldman Sachs just made its biggest acquisition in 20 years. It's a small boutique like wealth management firm, but shows their focus on investors. Snackers, we loved having you with us this week.

Jack, what's our kind of weekend plan here? I think we had a pretty good suggestion. Here's the deal, Snackers. You need to download TikTok, find a friend to play karaoke with. Kind of experiment a bit. And then tell them to sign up for Snacks Daily, the podcast that you love. Boom. We're going to be with them and you all next week, and we can't.

Talk to you Monday. 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 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.