The Best One Yet - “Popped collars of TikTok” — Abercrombie’s influencers. Oscar’s bull case. Google’s burned cookies.

Episode Date: March 4, 2021

Abercrombie isn’t the company you think it is anymore (it’s a D’Amelio). Oscar Health’s stock dropped on its IPO day despite the freelancification of America. And Google is burning its cookies that stalk you around the internet, but we don’t think it will dent profits much.$OSCR $ANF $GOOGGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewform 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 Thursday, the new Friday, March 4th. Stocks fell, this pod dip. This is the best one yet. Jack, what's our first story today? What do we got?

Oscar Health just started trading after its IPO, and the stock fell. Oscar didn't pull off the double-double. For our second story, Abercrombie and Fitch's new marketing strategy, paid the D'emilios sisters money and then pray. Abercrombie stock doubled in the last year. We think they got a renamed though. Hollister.com slash TikTok. For our third and final story, Google is making the death of internet cookies official.

End of the bedrock dessert of the internet. Big question. So how does this affect Google? But Snackers, before we hit those three delicious stories. Wonderful stories. Zoom just announced their earnings report last week. Jack, revenues quadrupled in the last year, no big deal. Zoom's stock?

How's that doing? Tripled in the last year, no big deal. But Snackers, Zoom's happy hour, neither tripled nor quadruple. Zoom happy hours are not living their best lives. According to a study in Australia, people hate that company 5 o'clock Friday Zoom in Happy Hour. Yeah, they do. And according to the lead author of said study, Peter Matouse, the associate dean of engineering at the University of Sydney Jack, the direct quote, many workers despise team building activities and see them as a waste of time. Especially when your face is like a box on the upper left hand of the screen, let's be honest. The takeaway of this study seems to be fewer digital dackeries, please, and more let me be in my pajamas already.

It's Friday. Jack, if I may, less resting Zoom face, more face in my Netflix face. This is coworker Chris's number one complaint at work. Yeah. Too much forced fun. So much forced fun. Zoom happy hours. They're just mandatory Moscow mules with a dash of micromanagement.

That is brutal. The takeaway snackers, no more 5 o'clock. Friday, Zoom in Happy Hour. Here's what we need instead, Snackers. Zoom out, and don't sign in to Zoom again until 9 a.m. Monday hours. Sign me up. Let's hit our three stories. Thursday's the New Friday. 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 robberhood family. It's all informational just so. 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 Robberhood Financial LLC Member Fenra slash SIPC For our first story The Obamacare stock Oscar Health

Just IPOed yesterday The first day was really bad But we're gonna tell you the bull case For Oscar health stock Jack can you give me Your Health Insurance Program number It begins with a W a 3 a 6 and a 9 Do you want the group number

The program number Or the user ID number I have no idea what you're talking about American health insurance and the health care system insanely complex. You know what we're talking about. Enter Oscar Health, a New York City-based company that's throwing Allbirds's branding into the health insurance industry. Yeah, Jack, here's the formula. A little sansera font, one word name, no capital letters, allowed at the whole company, no capital letters. And name it the same name as your buddy Oscar. Seriously, they can't type with capital letters at Oscar Health if you work there.

It's actually a rule. Now, this company was launched with Obamacare in mind. Yeah, it was. Digital First, health insurance policies. If you're not, getting health insurance from your employer. That part is key. And 529,000 people have signed up to get their health insurance through Oscar in 18 states. Now when it comes to the business model of Oscar Health, Jack and I kind of think it looks a lot like Lemonade, the insurance company. But for human insurance, not for your apartment or your pet insurance. Yeah, lemonade insurance went public last year. They make you feel good by donating a percentage of their proceeds from your renter's insurance to like a charity of your choice. Oscar also wants to, you.

millennials and Gen Z to feel good. And they do it by referring to you as a member. Yeah, get this, Jack. They refer to their customer service as concierges. Interesting. We control F, the S-1 document. Oh, yeah, we did. Which is the document every company that's IPO and must file.

Nick, they mentioned member or members 871 times. Oscar Health did. Tech companies call their customers users. Hospitals call their customers patients. Jack and I call our listeners Snackers. We do. And I love doing. Now, Members is a word that may make you feel as a customer kind of exclusive and a little pamper.

Jack, it's like they're using flattery at Oscar, like a customer retention tactic. That's what it feels like. Okay, interesting strategy. Now, other tech companies that have recently IPOed, they experienced the double double of their stock price. Yeah, but Oscar Health, its stock dropped 11% on its first day of trading. This is the first bad tech IPO we've seen since like late 2020. Jack, can you share with that? us the brutal numbers from Oscar Health's financials. This could explain why the stock fell. In 2020, Oscar Health made $463 million in revenues, which was down 5% from the previous year. Okay, so they brought in 463 million in revenues. They also lost, in total, $406 million.

That means for every dollar of revenue they brought in, they spent nearly $2 on cost to get there. Not a profitable way to run a business. That's the business right now. They're bringing in a buck, but then they're just losing $2 out of their pockets. Now, with Oscar Health, you also have to mention the Trump factor. Yeah, you do. So you got co-founder, Josh Kushner, sounds like Jared Kushner, because he's Jared Kushner's brother, Jared Jared Kushner, the Trump appointee. The son-in-law of former President Trump. Now, we think that they just made a Trump offset last month when they announced a prominent Democrat was joining the board of Oscar Health. Basically, a cancel-out situation. They added David Pluff, the tech and data guru of both the Obama president.

presidential campaigns. So Jack, what's the takeaway for our buddies over at Oscar? The bull case for Oscar is further freelancification of America. All right, Snackers, yesterday investors saw a bear case and dropped the stock, but here's a bull case for why the stock could actually go up. The bull case is freelancing happening everywhere in the future. Yeah, Jack, you took the Uber home where your Instacart was delivered by a Door Dash, Dasher. Last week, we mentioned that LinkedIn launched a gig job platform for white collar work. This one's wild. get this, Google has more independent contractors on the payroll than full-time employees. The Affordable Care Act was passed in 2010, and it predicted that these trends of more and more

gig work would continue. So Obamacare created a marketplace for people who didn't get insurance from their employer. Oscar Health is the brand that is dripping in millennialness that competes on health care.gov and the Affordable Care Act's marketplace. And it's betting that more Americans are going to ditch a human boss for a gig app. And that is the bull case for Oscar. her health. For our second story, Abercrombie and Fitch just jumped 2% after its earnings report. In the last year, Ibercrombie and Fitch has become a 129-year-old TikToker. All right, Jack, I got to ask you. First Abercrombie purchase. Where was it? What was it? It was at Abercrombie and Fitch, and it was cargo shorts with draw strings around the leg openings.

I'm speaking your language. South Street Seaport. I got the khakis that you zip them off the knee. I remember that. Wasn't it five stories? Kind of an inception situation with the cacky. Fanio Hall situation. Now, there's a dirty little secret snackers. We want to tell you about this publicly traded Abercrombie and Fitch. Don't call Abercrombie, Abercrombie. 58% of Abercrombie sales are actually Hollister, the California-based surf company. And over 50% of those sales are done online, not in store. That's why you got to think of Abercrombie and Fitch as Hollister.com. It's not Abercrombie anymore. But it's sales, honestly, it

peaked in 2012, probably when we got rid of those khakis, Jack. The Cologne almost killed you back then. That was the situation. So why has the stock, ANF, nearly doubled in the past year? Jack and I jumped in snack style, and we noticed a funny thing going on with Abercrombie's marketing. Abercrombie spent about $464 million last year on marketing. All right, Jack, we're going to Hansel and Gretel this thing. Following it back a year, that's the same spending on marketing they did last year. And the year before that, And the year before that. And the year before that. We looked closer. Closelyer. It's not just the marketing spend that is almost identical the past five years. No, turns out the sales also shockingly consistent, give or take, like they're getting

$3.3.3 billion in sales every year. We compared Abercrombie and Fitch last year to Abercrombie and Fitch five years ago. Marketing spend grew by 2%, but sales dropped by 7%. That's bad R-O-I, Jack. That is a bad return on investment. So how can Abercrombie and Fitch improve in order to drive more sales and drive the stock price up? Well, let's jump into the earnings. Slide number eight, Jack, what are you seeing over there? Drive more efficient marketing spend is their priority. But how, Jack? How? So Jack, what's the takeaway for our buddies over at Abercrombie? Abercrombie has become a TikTok influencer. Okay, Snackers, Abercrombie isn't about like the six-story flagship stores with the Army of Abs anymore. They have built, according to them, a

Last Influencer Network. The executives at Abercrombie and Fitch, they mentioned the word social, 15 times on their recent earnings call and said they were doubling down on social selling. Which brought us to Charlie and Dixie D'Amelia, the sisters born after Y2K, famous for being normal. Famous for being normal. They're also TikTok stars number one and number eight most followed TikTokers on the app. And get this, they did 36 posts for Hollister last year.

That got 200 million views. on TikTok. It was three partnership branded campaigns. That was it. That is it. And the D'emillo holiday gift guides that they did with Hollister, Jack, that drove sales at Abercrombie and Fitch. Jack, how about the Demealio books that Hollister offered for sale? That sold out and brought people into the stores. Jack, how about those women's high-rise super skinny jeans that the D'emilios happened to mention? We got a feeling that's a contributor to the stock price doubling last year. After five years of not changing anything at Abercrombie and Fitch, they've just put all their market. marketing eggs into TikTok. Not through

ads like they've done their entire history, but through paying the D'emillo Sisters to post things. Abercrombie, it is quietly gone from being a mall teenager to an 129-year-old TikToker. For our third and final story, Google is burning all the cookies. We think it's taking a convenient

stand for privacy. That won't hurt Google much. All right, first of all, we got the death of cookies going on. Cookies, the sweet bedrock of the internet since 19. 1994. Great year. Snackers, cookies are little bits of code planted into websites that follow you around even after you leave that website. All right, Jack, I kind of love this part how cookies actually came from the idea for fortune cookies. I guess like the cookie itself that's tracking you is like a little

message within a broader cookie. Except fortune cookies don't follow you out of the Chinese restaurant. That's true. And the funny thing about cookies is like remember when we did that story a month ago, Jack, about Scott's Miracle Grow in Snacks Daily? It was a great story. And I remember, you sent me a screenshot of the next day you got an ad for lawn care products in your Twitter account. Jack, I grew up in New York City. I have never, I don't live near a lawn. I don't need, I've never mowed a lawn. I honestly, Jack, I thought the grass just kind of stopped growing. I thought that's how that worked. Nick has fig trees and succulents. He does not have a lawn in Scott's Miracle Growl. Not a thing. Even though he visited your website, you don't need to show him ads for your product. Jack, they mattress,

mattress, mattresses me. And it's because of cookies which help targeted ads soar. But now, they're getting phased out across the web. It started with Apple's Safari web browser and Mozilla Firefox, which both banned cookies in 2019. Now, Google, whose Chrome browser is like number one in the world, is finally following. They're going to phase out cookies that track you by 2022. But Google had already announced that. The news from yesterday is that Google will not replace cookies once they're gone with a similar cookie-ish workaround that will also track your third-party data. Okay, so this is a big deal because Google is 52% of the world's digital advertising. Let that sink in. And now the world's digital advertising will not be aided by cookies. Okay, so Jack and I are talking, we're whipping up this story for you.

Basically, we came out with three reasons why Google is doing this right now. First, Google probably wants to get ahead of regulation that could be coming. Better to like voluntarily stop than be forced by the junior senator from blank. Second reason, consumers are kind of making Google do better with privacy. Okay, direct quote here from Google's ads, privacy, and trust spokesperson. Jack, the honors. People have growing concerns about privacy. And if we don't evolve at Google, the open web is at risk. Okay. So you got getting ahead of regulation. Consumers are making them do it. And then finally, Google can still make tons of ad revenue in a whole bunch of other ways like nothing. This new policy, they're going to throw a product manager and 300

engineers and figure it out. Basically, the people around the corner from me in San Francisco. So, Jack, what's the takeaway for our buddies? over at Google. Google's brand gets privacy points for this while its business loses close to nothing. And that's impressive. Cookies are the core of internet ads. You'd think investors would be freaking out right now that Google is killing them. And yet, Google stock yesterday felt just by one percentage point more than the rest of the market. That's it than the S&P 500. Now, that's because Google's biggest advantage in ads has nothing to do with cookies or third party data. It's the first party data. That's why Google is so incredibly efficient at ads. They know what you're searching for

and they can place a rat around it. That is first party data. If you search, what is that thing on my thigh? That is first party data that Google is going to use to show you a paid ad at the top of the results for thytastrasol. That's what's going to happen. That is not cookie dependent. That is Google dependent advertising. Google clarified yesterday. They will continue using their first party data to track you with great Google search ads. Like that disastrous salt. Google is sacrificing a fingernail right now. It's not sacrificing its foot. Jack, can you whip up the takeaways for us for Thursday, the new Friday?

Snackers, if you work at Oscar, please tweet us if it's true that you can't use capital letters. Like it's forbidden. I mean, it's got to be true. The stock fell yesterday, but freelanceification, that is the bull case for Oscar stock. For our second story, Abercrombie didn't change its marketing spend in five years. Yeah, Jack. Instead, it just became the third D'Amelio system. Third and final start. Google's killing the cookie and third-party individual data.

It uses to target you with ads. Their ad biz is going to be fine, is what we're thinking, because of their first-party data. Thistrasol. I thought you were going to say something. Thistrasol. I thought you were going to say something. Now, time for our snack fact of the day. This one sent in by legendary snacker, Peter Fissure, from lovely Mystic, Connecticut.

Great Aquarium and Mystic. Not last week, Snackers, we told you about Jay. selling a champagne company, the champagne that sells for up to $65,000 a bottle. Yeah, which led to a snack fact about how there are one million bubbles of champagne in a flute of champagne. Which led to Peter's snack fact that the pressure in a bottle of champagne is in excess of 90 PSI, 90 pounds per square inch. Okay, Jack, when I sprinkle a little context on this, your tires. I pumped my tires yesterday. They're constantly seemed to be leaking, by the way. And that was 32 PSI. So you get three times the pressure in a champagne bottle.

Not too shabby. Snackers, enjoy your Thursday, the new Friday. Cancel the Zoom at a happy hour. And please ask your buddies, H, Y, HY, Y, SD. That's how we grow. Have you had your snacks daily? Drop it in your group text chain and tell them about your snacks. If you know, you know. And before we go, congrats to Snacker Guillermo G, now a U.S. citizen in the state of Colorado. Guillermo, yeah.

Great to have you. Welcome. And congratulations to Burke McDonald and Monica Rasmussen, who just got engaged in Walnut Creek, California. Also, Kobe Connor just got engaged in Dallas. We'll know to who. Didn't say, but congrats. Hopefully it's to someone. And happy birthday to Renee Randall in Houston, Texas.

I do hope it's to someone. Kevin Erickson, happy birthday in Vancouver, Washington. And Alvin Lubis in Tallahassee, Florida. And Mary Debbie in Milwaukee, Wisconsin. And Amanda Hamm, happy 40th in Fort Worth, Texas. And Edvita in Kirkland, Washington. and to dorm La Lazzari in Los Angeles, California. And Gaga turned 26 in Miami.

Happy birthday to Ernie Kroath in Denver, Colorado. And happy birthday to twins, Avi, Navi, Posit, Palletti over in Atlanta. And to anybody else celebrating. Seriously, anything today, make it a T-Bla. Celebrate the wins. 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.