The Best One Yet - Quibi’s the #1 disruptor in video, Fiverr surges 90% on IPO day, and HSBC’s Saudi Arabia risk/reward

Episode Date: June 14, 2019

Startup Quibi is launching as a fully mobile streaming app with $1B in funding, and we just got more details on what it’s working on (hint: the return of “Punk’d”). Gig economy website Fiverr surged 90% on its IPO, and it literally trademarked the term “gig.” And a WSJ article reveals how HSBC has become the international bank of choice for Saudi Arabia with big risk, and big reward.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 Jen. This is Snaps Daily. It's Friday, June 14th. And this is the best one yet. Best snacks we've ever done? We have the best rundown I've ever seen. I really like this one. Jack and I got really excited. Markets rose by a bit, but we want to go red into our three stories. Let's hit these things. Quibi. The Netflix for smartphones only just made big announcements. It's banking on talent and Steven Spielberg movies. Quibi isn't a thing yet, but you should know Quibi. We're really excited about that story. It's pretty interesting. Second story, Fiverr. It's the website that you can hail gig workers for. anything and it just IPOed yesterday, the stock jumped 90%. This is the Uber of everything, except for everything Uber's doing. Third and final story is HSBC. Nice letters. It has become the loyal, faithful, servant bank of Saudi Arabia. We don't always cover bank stories, but when we do, it involves international drama. Let's first talk about the new Harry Potter out.

Can we please talk about this? It's at Universal Studios in Florida. It's called Hagrid's Magical Creatures Motorbike Adventure. Yeah, had me at Hagrid over there. Lines for this thing are 10 hours long. We're not kidding. If you don't have like a nimbus situation on you, good luck. Where's your Phoenix tip wand when you need it?

How many times I said that over a butterbee? Ascio 10-hour lines. See, I'm the Latin over there. So this thing cost quite a few galleys. Yeah, it's actually pretty expensive. $300 million to build this magical ride. But they decided to do it. The highlight, by the way, is the forbidden forest that they built.

Or wait, I'm sorry, they planted 1,200 trees. So the ride goes through the forbidden forest because Hagrid is the only one comfortable in the forbidden forest. I want to emphasize this. They planted 1,200 trees for this ride. But Harry Potter World, it has like a giant castle. It's got Hogwarts. One thing we want to call out, though, is they claim to have a virtual line, which sounded really fancy. So that 10-hour line, you don't actually have to wait in it.

Basically, they'll alert you when it's your time to come. They'll give you a number just like they used to at the deli. Hey, Joe, it's number 63. 63? Who's number 63 over here? That's not exactly new magic. No, we're used to it. It's called a reservation.

Now, let's get to our three stories, but first, listen to these important words. snacks daily. We spoke to the lawyers and we got to get something legal 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. Nope. It's not a research report or investment advice. Not an offer or sale of a security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fembrae slash SIPC. For our first story, we're jumping right into this thing. is blowing up our news feed, and it's about time we cover this.

We need to cover this. It's called Quibi, which stands for Quick Bites. Very nice. You see what they did there? Not a publicly traded company. Not actually a company. Doesn't even technically exist. Well, I guess legally it exists.

Quibi hasn't launched, but this is a video streaming network. It's on an app only, so you can only watch it on a smartphone. Now, we know what you're thinking. Like, who doesn't have a streaming network? My aunt has a streaming network. Everyone's launching streaming network. This is a streaming network that you should know because it's so aggressively mobile first. This company is in.

innovating in so many ways. First of all, this is expected to be the first year that Americans spend more time behind a smartphone screen than any other screens. That's like TV or laptop combined. And Americans are spending like three and a half hours a day on average facing these mobile screens. So Jeff Katzenberg and Meg Whitman discovered this trend that everyone's on their phones. And two years ago, they started planning Quibi. Now, they didn't just plan. They raised a cool, you know, $1 billion to launch this thing. And guess what? They were able to get that money because of the resumes of these two leaders. Jeff Katzenberg. former chairman of Disney ever heard of it.

Meg Whitman. Former CEO of eBay and Hewlett Packard. Right. And Jeff Katzenberg also like invented Trek at DreamWorks. Yeah, he's a pretty creative guy, very on top of this game. Now, we've been wanting to cover this for a while, so we've been picking up all the information bit by bit as it's been coming out. And there's enough now that we've hit a critical mass.

A key amount came out last week. So the service is going to launch. You will be able to watch Quibi on April 6th, 2020. Extremely specific. Very specific day. for being so far in the future. I don't know what I'm doing for dinner on Tuesday, and this thing already has its date plan for lunch.

We also know how much this is going to cost you. It's going to be $5 if you're willing to tolerate some ads. And it's $8 if you really hate ads and don't want them. Right. And that's $5 and $8 per month. Now, they got some serious talent just lined up. Steven Spielberg signed up to create a horror TV show. Now, not just any horror TV.

No. So remember, Quibi is a smartphone-only streaming service. So when you're watching this thing, you are probably alone, Unless you're nudged up next to somebody looking at the same phone. It's a little depressing, Bletchroom with it. So get this. Steven Spielberg's horror show, you can only watch it after the sun has gone down. It can tell where you are and when the sun goes down.

And you can only watch it night. That is a great buzz-worthy thing. Just an incredible detail there. Now, they got a couple other things coming out, too. They've got Idris Elba, who's probably going to be the future James Bond. Yeah, very possibly. Now, he is doing a car stunt TV show where he and a stunt driver go head-to-head in different cars. on like ridiculous things everywhere.

And the first two episodes are called Wall of Death. And then get this. Flaming obstacle course. That should be, those are very literal. That sounds pretty good. They also have a revival of punked from MTV. Very nice. Unfortunately, no, Ashton Coutcher.

These are 10-minute episodes, and each one has augmented reality built into the show. Very intense. So you got like, you know, Jennifer Aniston's going to walk out of her home and like a fake virtual tiger is going to eat her. That's just a teaser, though. There's tons and tons of show business talent on this process. So, Jack, what's the takeaway for our buddies, over at Quibi Quickbyts.

Quibi is the biggest innovation in video since Netflix. It's not just the whole vertical format thing that makes this so mobile first. Yes, you do have to watch vertical because watching on your phone horizontal is you're going to drop it and then you flip it around. You're going to cramp your hand. Everything on this service is designed for a mobile experience. That's what makes Quibi unique. They have thought of pretty much every possible detail to make this.

So here's one key detail. If you're on the go with your smartphone, how much time do you have to watch an episode? You're on the four train. you're trying to get down to Midtown. You're commuting. Getting off at 59th Street. You're waiting for the doctor's appointment. Six minutes, so-and-so is sweating up against you.

So it designed its shows to be consumed in seven to ten-minute bites. In fact, it calls these bites chapters. So you're not going to be like, hey, I'm not going to watch this show because they don't have time. You're like, wait, I could do this between three subway stops. So you got two and a half hours for each show, and they're broken up into seven-minute chapters. One detail about why Quibi is the best innovation in video since Netflix. For our second story, Fiverr is the gig economy OG. that just IPOed, and its stock jumped 90%.

It's Fiverr, two hours. Nine to Fiverr over here. So this is a freelance service marketplace for lean entrepreneurs. That's a direct quote. That's how Fiverr describes itself. By lean entrepreneurs, they mean freelancers. Yeah. With Uber, you can hail a ride or you can hail like a burrito.

With Fiber, you can hail a graphic designer to make custom wedding invitations. We're talking 200 services here from like anything to everything. Logo design, voiceover, language, translation, there's a Fiverr for that. We could have gotten a Fiverr in here doing the third story for the podcast. We just couldn't get someone to time. We didn't have time. You can also get data entry if you have like tedious mindless work. Resum- Someone can write your resume. Very nice. I don't even know what the prices are for that. Now, future goal for this company is to get to the point where they're using AI, artificial intelligence, to basically better connect you with a Fiverr.

Yeah. And to be clear, this is a platform. This is a marketplace. You have people who need a job to be done and you have people willing to do a job and they meet together. Fiverr stands in the middle, and they're making that connection. And get this, Fiverr is pretty savvy with the lawyers. A couple fun facts here. They trademark to the term gig. Very nice. That's a pretty valuable term.

Surprising, they don't put it in their company slogan. Interesting move there. Also, they're one of the 100 top popular U.S. websites, which we hadn't been to it until today. And get this, there's a little bit of a scandal. A little controversy over Fiber. Sometimes Fiverr is used to hire people to go on to Amazon and write negative reviews for your competitor. companies are going on, they're bashing other companies using Fiverr people.

Okay, so a good trend for Fiverr. The gig economy is growing three times as fast as the U.S. workforce as more people kind of just do things on the side for a few hours a week. So Snacks style, we jumped into the financials here. And basically the company had 76 million in annual revenue. Their loss, though, is growing. Right. We went much more into the details than just that, though. We looked at the S-1, which is the Tell Me Everything About Yourself document. Before you IPO. Every company must do before you IPO. and investors should definitely read this thing before buying. Now, the key with the S-1 is that they don't just show all the nice, fancy, polished information about the company.

They show their deep darkest concerns. It's like a therapeutic session where they're like coming out and saying, hey, these are the things I'm worried about. So Fiber is worried about regulatory change. I believe they had a direct quote on this. Regulatory agencies may enact new laws or promulgate new regulations that are adverse to our business. What they're talking about there is the fact that gig economy workers, who they're connecting, with jobs are technically independent contractors, so they don't get a lot of benefits. Yeah, and you've heard this before. Uber and Lyft are facing the same problem. If they get reclassified

to like full-time employees, then there's not as much of a need for Fiverr. And that could hurt the growth of the whole gig economy industry. So Jack, what's the takeaway for our buddies over at Fiverr? The gig economy is way more complex than people think. Fiverr is focused exclusively on creative and professional services. Uber and Lyft are focused on more functional jobs, specifically rides. So you got to ask the question, is there going to be like an inevitable clash between the two as one tries to go to functional jobs and one tries to go to services jobs? Or will they stay apart and live peacefully because the pie is big enough for both of them? For our third and final story, this one's really interesting. H.SBC has been

stepping up to basically be the bank of Saudi Arabia when no one else will. Yeah, brought to our attention by the Wall Street Journal. Very nice. That HSBC is the number one bank of Saudi Arabia. Everyone wants to know about HSBC because you see it on every airplane terminal. It dominates that slow ramp down to the plane. So like 10 minutes before you're stuck on the plane, it's just HSBC ads in your case. So it stands for Hong Kong, Shanghai Banking Corp, and it's the number three non-Chinese bank in the world. There are four Chinese banks of head minutes, so that means it's number seven on play.

Yeah, pretty much. The Chinese ones, though, might have government ownership. Pretty big deal. Now, in April, it did a really big investment banking deal for the state-owned oil company of Saudi Arabia, Aramco. And for the last couple years, it's been issuing government bonds for that kingdom and making a lot of money for. And so basically when the prince, the crown prince of Saudi Arabia wants to make a deal, he doesn't go to his ATM. The first call is HSBC. Now, why is this a big deal? Because

reputation matters. All right. We got to back up to 2018 here for a story that we've all heard about. Washington Post journalist. Jamal Khashoggi was murdered. Yep. And all of the evidence points to the Saudi Arabian crown prince, Muhammad bin Salman. So basically everybody pretty much bailed on Saudi Arabia after that. It got canceled. No international bank or international big corporate wanted to touch this company. Except for HSBC, which remained very, very loyal. Yeah. It was willing to turn its head to the murder and turn its head to continuing human rights abuses to do business. And out of this, they got a good amount of money. HSBC made banking fees of over $65 million in two years. Yeah. And it owns, according to the Wall Street Journal, a significant chunk of Saudi Arabia's biggest domestic bank. So as that economy

continues growing, HSBC will continue profiting. So Jack, what's That's the takeaway here for our buddies over at HSBC. The more risk you're willing to take, the more money you could make. That's the kind of thing. You hear it a lot, risk and reward. But this is a great example of it in practice. Banks are in the business of taking calculated risks. When you take a loan out and a bank gives you a loan, the risk they're taking is that they don't get paid back.

Yeah. When a bank makes an investment, the risk is that the investment turns south and they lose money. And the risk of working with Saudi Arabia over the last couple years has been a reputational risk. Yeah. The risk that you will get labeled by customers. as an accomplice to murder. Now, HSBC has been willing to take that risk, and they think that it's been paying off.

So far, it looks like it has been. Jack, can you whip up the takeaways for us before the weekend? Quibi is completely rethinking video for the mobile experience. You get three chapters of punked on your 4-5 train downtown. Fiverr had a booming IPO as it connects gig workers with people who need a gig. We may be Fivering one episode later this year. We're going to play around with that idea. HSBC has the dubious honor of connecting Saudi Arabia

to the international financial system. It's a reputational risk. It's a calculated risk, and apparently this thing is paying off for them. Now, time for our snack fact of the day. This one sent in from some guys who carpooled together, enjoy their snacks daily, and it's quite a team. We got Chris Erasible and Bobby on Long Island. Yeah.

This Strong Island? This snack fact was sent to us from Long Island on Long Island. From the car. I think they did this one while driving. So the Academy Awards, also known as the Oscars, there are 8,000 people who vote for best picture, best director, all that stuff. A lot of votes. Nine human accountants spend 1,700 hours

before the event, handling the votes and tallying up everything to figure out who want. Chris and Bobby, I think may be involved in this somehow. Chris and Bobby, you guys get the honorable mention Oscar on our behalf. Please come up and accept the reward. Now, a couple other great stories we're covering in our snacks, daily news.

Tyson finally unveiled its meatless meat. It's called Raised Ruted. And then you've got an oil explosion in the Middle East that sent oil prices up 3%. Snackers, great pod. Great weekend coming up? We have one big ask for you for this weekend.

Enjoy the weekend. Have a great weekend. We're going to see you guys on. We'll talk to you Monday. Can't wait. The Robin Hood Snacks podcast you just heard reflects the opinions of only the host 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 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.