The Best One Yet - “Risk life, deserve Twizzler” — Adidas jumps on Peloton. AMC gets rich. Johnson & Johnson is Batman.

Episode Date: March 12, 2021

Turns out Adidas wants to be like Nike (and it’s also getting a Peloton). AMC’s sales have plummeted 90%, but it found $300M in cash under its seats. And Johnson & Johnson’s latest vaccine movies reveal it’s actually Batman.$ADDYY $AMC $JNJGot 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/viewformLearn 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 Friday, Real Friday, March 12th. This weekend, Nick, I'm seriously putting together the baby go bag for the hospital. It's the Bassett. I know you're still working on the Bassin Edge. April 5th Snackers is the due date.

And as a reminder, when my wife goes into labor, yeah, we're taking a week off from the pot. Jack, are you going to like time this up with like an S&P 500 high or what's the plan on that? I hope so, because this baby's going to be a bull. Oh, by the way, Snackers this weekend, $1,400. our stimulus checks could be coming to you as soon as right now. Joe Biden said as soon as this weekend. This happens to be our best snacks daily podcast yet. So Jack, first story.

Adidas just announced it's five-year plan. Yeah, be more like Nike and saddle up with Peloton. For our second story, there was a real chance that AMC movie theater company wouldn't survive this winter. A real chance. And then Reddit happened, but Reddit saved the company. For our third and final story, Johnson and Johnson made a pledge last year. Get this. To not make any profits.

off of any of the COVID vaccines they were developing. It's achieved what only Batman could do, Jack. We thought only Batman could do this. From villain to hero. True story. But Snackers, before we hit those three stories, there's a movie dropping next week with an interesting plot line. Okay, so here's the documentary's name.

The Last Blockbuster. Because there's actually one Blockbuster video rental store still operating. It's in Bend, Oregon. That's it. You go, and it looks like an ancient library of VHS volumes. There's only one thing missing. from the last blockbuster. You gotta have that couple that's arguing an aisle 6, Jack. Freddie Prince Jr. was never and never been kissed. No, no, no, no. He was in She's All That.

Everyone's thinking it. But Snackers, here's the plot twist. That last Blockbuster, it's now an Airbnb you can rent for the weekend. Quite an experience. It includes a pullout couch, a TV, and a pretty robust DVD clutch. Okay, you were shocked, you were surprised, didn't see that coming. Guess what? Here's a plot twist, plot twist on the last blockbuster. The last blockbuster. The documentary, it was produced by none other than Netflix. That's right. Netflix produced the last blockbuster movie, and it's dropping on Netflix on Monday night. The company that caused The Last Blockbuster is producing a movie.

Yeah, Jack. On the last Blockbuster. I'm following you, Jack. This is like a murderer writing the obituary for the depad. This is like Gmail adding a physical mail option. One sec, Jack, my iPhone added a camera filter. It looks like a Polaroid. Little messed up.

Let's hit our three stories. daily. We spoke to the lawyers and we got to get something legal out the way. It snacks about the hair 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, Adidas, just announced it wants to be like Nike, Jack. That's who they want to be like. And Peloton. Yeah, and the little aspect is there. By the way, this company, Adidas, they are so European.

Jack, you want to know how European they are? Their CEO has a letter in his name that doesn't even exist on English-American keyboards. Casper Rorstedt. It's got this weird zero instead of an O. I think it's called a knot or null. Spear in there. I think our math class had this. That's the last time I've seen this.

math class. Now, we're going to start this story with Adidas' second announcement, the Peloton one. We thought this was more interesting. We said in December, Jack, that Under Armour should like try to become the official apparel provider of Pelotan. We're like, Under Arm, come on, what are you doing? The idea was right. Yeah, the company was wrong. The movie was good. The actor decisions were incorrect. Now, Adidas beat them to it. There were very few details with this partnership, but apparently Adidas hopes to boost sales to women through this partnership with Palaton. One thing Jack and I do know,

they wrote the press release in all capital letters. So, you know, they're extremely excited about this. It was two sentences. That's it. No lowercase letters and definitely written by a non-English native speaker. It was like they hired Gilbert Gottfried to do their PR. That's basically what's going on down here. All right, now let's

back up to announcement number one. Adidas wants to go direct to consumer. Jack, Adidas, it has a problem right now. It's facing a problem. Nike's sales rose by 9% last quarter. Adidas shrank by 5%. Jack, I see your problem and I raise you a bigger problem for Adidas.

Nike's net profit margin. The amount of profit makes on every dollar was 11% last quarter. For Adidas, it was about a quarter of that. Okay, so why is Nike more profitable, getting higher sales, and frankly not putting out press releases in all capital letters these days, Jack? It's because they decided in 2017 to go direct to consumer. Yep, Nike actually yanked the shoes out of all the regional footwear chains that you grew up with. They decided you can only buy Nike on the Nike app, Nike.com, Nike owned stores and select

retailers who have like a high standard of excellence. Ruthless move, Jack, because the mom and pop shops in your neighborhood, they'd been using and selling Nike for years. They had to stop suddenly. If you got like a bootleggers down the road that's been selling shoes since you were a kid, they probably don't have Nike's now. No joke. Little shoe spot on 86 and Lex. Now, Nike, benefited from all this direct-to-consumer, first of all, because of boosted prices. Right, because mom and pops weren't allowed to discount Nike shoes, which Nike didn't want. And then you can add to that the fact that they also got boosted profits. They cut out the middleman and took all the profits for themselves. So Adidas is looking at this little shoe situation over Nike and saying, you know what,

we want to be like Mike. Yeah. Four years after Nike announced it, Adidas just announced their direct-to-consumer plan. Adidas is throwing $1.2 billion in investments into e-commerce trying to double. e-commerce sales by 2025. So Jack, what's the takeaway for our buddies over at Adidas? It's never too late to go D-to-C. Yeah, Snackers. Netflix, they went direct-to-consumer back in 2007, and that's when they started streaming. That's how they did it. It took Disney 12 years later to get there with Disney Plus. Yeah, it did. But it worked, and now that has the stock at a record high. Well, Nike went direct-to-consumer

in 2017. Four years later, now Adidas is pulling off the same move. Now, some brands definitely need a middleman to survive for distribution. I know you're thinking, Jack. I know you love and appreciate an undershirt because you get cold on our podcast every now and then. I do. I'm always like chilly and I appreciate my dad actually gives me a three pack of white t-shirts every Christmas every year. And I'm not judging you, but Haynes T-shirts, they probably won't sell as many unless they're flooding aisle six at Macy's every quarter. My dad, if he knew how to download an app would download the Haynes app. Big Ted. But I don't think others would. Now, Adidas is a strong global. brand. They sponsor like 120% of all the soccer teams out there. If the brand is already a

destination like Adidas, then it's never too late to go direct to consumer. For our second story, we're one year into the pandemic and Johnson & Johnson has given the entire pharmaceutical industry with Jack and I are calling, wait for it, the Batman comeback. This is the Batman comeback. One year ago, pre-COVID, only 21% of Americans saw the pharmaceutical industry with favorably. That's not pretty. When we worked at it, banks, Jack, honestly, was the finance industry 10 years ago. Not liked. Not a fan people. In terms of no favorability, you got banks, tobacco industry, and pharmaceuticals. This is like a not fun table for a lot of people. But can we go back to 2016, Jack, what was

going on with the pharmaceutical industry in 2016? A driver of that unfavorability was the infamous smirk from the farmer bro, who acquired a life-saving drug and then jacked up the price by 5,000 percent. Okay, so kind of an obnoxious move over there. That was 2016. 2017, things improved for pharmaceuticals, Jack? Well, the EpiPen, which also saves lives, the company behind it increased the price 12 times in six years. All right, also kind of an obnoxious thing to happen.

2018, are things looking like happier, brighter, nicer, nicer for pharmaceuticals? We finally got some disruption to this industry from Theranos. Very cool. Tell me more. They raised $700 million of VC capital. Also exciting, tell me more. On a foundation of lies. There I was. Elizabeth Holmes, the founder, was indicted. Okay, 2019.

things have got to turn around for pharmaceuticals jack. Well, Purdue Pharmaceutical declared bankruptcy because they were accused and proven to have fueled the opioid crisis in America. No big deal. $5 billion in lawsuits. And then right before the pandemic, the House passes the lower drugs costs now act whose name says exactly what it wanted to accomplish. It makes a lot of sense. Consumers were hating the pharmaceutical industry. Yes, they were. So politicians who represented them, did too. Yes. And so they tried to pass regulation that would lower prices. I think that's all technically the transit of property check. It was a democratic bill, Elijah Cummings, but even Republican Donald Trump supported it too. It's all just like how

Gotham and Gotham's mayor and Gotham's police department hated on Batman as a vigilante at the start of the third movie, Jack. Bipartisan consensus hate from America on the pharmaceutical industry. Just like Batman face. But now here we are. a year later, we got three vaccines, and American pharmaceuticals have become the Batman hero for the world. And here's a big reason why, and a wild reason. Johnson and Johnson refuses to make a profit off their single-dose vaccine. Yeah, get this, back in March, just as the vaccine started development, Johnson and Johnson pledged to price their vaccine, in their words, on a not-for-profit basis. We were like, you mean a for-profit basis. That's a typo, right? Some intern is going to lose this internship. That's a big typo. Now, new news this week, the U.S. government just bought another

hundred million doses from Johnson & Johnson. And now Johnson and Johnson is on track to make a billion doses this year for $10 each, and they're just going to break even on all that. Snackers, we repeat, the Johnson and Johnson vaccine, which is like kind of awesome. It only requires one dose. It's $10 each. That's the price they chose. This is just like Bruce Wayne paying for the Batmobile and all the Batman equipment out of his own pockets. And that move by Johnson & Johnson to not make profits, it set the tone for the pricing that Moderna and Pfizer had to pick for their vaccines. And that's why no one's reading headlines like pharmaceutical company charging exorbitant prices for a COVID vaccine. So Jack, what's the takeaway

for our buddies over at Johnson & Johnson? There's corporate value in being a hero. It's called the brand halo. All right. So a recap here, Snackers. Johnson Johnson is giving away this vaccine as a public good, which is amazing. There is historic precedent. The polio vaccine, that was given away by Jonas Salk for free. But Johnson & Johnson isn't Jonas Salk and they're not UNICEF, so what are they doing? We think the lack of direct profits Johnson and Johnson is making on the vaccine could boost other indirect profits from the rest of the company. Now, we haven't seen the data yet on how Americans see the pharmaceutical industry today

compared to last year. But we're pretty sure there's a lot less hate and a lot more appreciation because the vaccines are letting things return to normal. And then if Americans hate pharmaceuticals, less than politicians would care less, and then regulators are probably going to focus less on pharmaceutical companies. Johnson and Johnson didn't focus on profits. And that move gave the whole pharmaceutical industry a brand halo. For our third and final story, Jack, I'm checking my calendar here. I don't know what's going on. AMC theaters was supposed to run out of cash at Thanksgiving,

like Thanksgiving last year. A few months ago, it would have been bankrupt, but it got saved by Reddit. By Reddlers. So the calendar isn't going to give us the answer on the Snackers. Jack and I jumped in snack style to AMC Theater's fourth quarter earnings where what did they announce, Jack? Well, a reminder, this is a movie theater company reporting earnings about the winter of COVID-19. It almost feels like we could end the story here. I don't know. Do we like, should we even go on? I mean, the bad numbers. You want to share the bad numbers with everyone, Jack? A unsurprising 88% drop in revenues. Like, you never see that from any company. No, you don't. No. They lost almost a billion dollars in just three months.

There were, however, some fun numbers. Like, I didn't realize movie theater earnings reports were so cool. Honestly, this is why I love doing this pot with you, dude. I know. It is amazing. Apparently, Snackers, if you did go to the movie theaters over the holidays, you ate more junior mince than usual. Yeah, AFC theaters.

They sold 90% less food, but they sold more food per person. Risk life. Yes. Deserve Twizzlers. That's the equation people did. Oh, by the way, ticket prices went up to like $9.96 a ticket. It's up from last year, but way down from Manhattan. Yeah, that's for sure.

I honestly think it's like $40 and you had to like auction off your finger if you wanted to get a movie theater. Don't forget the $3 reservation fee. There's always that. Now, AMC stock, it is like still half of what it was a year and a half ago. Because of this huge short-term issue, which is COVID-19, which is obviously crushing movie theaters. Yeah, that's like the main obvious one. But second one is longer term and is eight. existential. Hollywood seems to be quitting movie theaters. Trolls World Tour, that could have killed

the 75-day exclusive movie theater window that theaters rely on. So, like, you add up those two big, short-term and long-term reasons. In June, AMC made an announcement that was kind of scary. They implied that they only had enough cash to survive until Thanksgiving. And if something major didn't happen by then, they could be out of money. But here's what fascinated Jack and me about AMC. They got a weird situation with their cash. They have more cash now than they did a year ago. They were supposed to be burning through their cash to zero. Yeah, but they gained cash instead during the COVID winter. So Jack, what's the takeaway for our buddies who apparently have all this cash over at AMC? Big players make big plays in big games.

Oh yeah. Look at AMC stock. It's like plummeted to historic lows, but then there's this random three-day spike in January. It wasn't random at all, actually. It was Reddit. It was Reddit. Wall Street bets and meme stops that exploded the stock price. If so facto, AMC theaters got saved by Reddit right around the time of the GameStop stock pop. And Nick and I can see it in the statement of cash flows. Yeah, we can. $305 million more dollars was raised by AMC on January 27th at the peak of the meme craze. They basically had a banker on speed dial.

Here's what happened. AMC saw probably with astonishment that their stock price was exploding higher and they really quickly called an investment banker. Yeah, they did. Told them to create new AMC stock fast and sell it to the market at a really high price. And that brought in money that warded off this bankruptcy that was supposed to happen. Over the whole year in 2020, AMC raised more cash from new stock issuance like that than it lost from operations. Ipso facto, more cash today than a year ago.

And for companies who are on the brink, cash isn't just king. Cash is like critical. AMC raised a bunch of it thanks to Reddit. Jack, can you whip up the takeaways for us before the weekend. Adidas wants to go direct-to-consumer like Nike. With a brand like Adidas, it's never too late to direct-to-consumer. Don't let anyone tell you otherwise. For our second story, Johnson & Johnson said no to profits for the vaccine.

But being a corporate Batman leads to profits in other ways. For our third and final story, AMC sold $305 million of stock during a moment when its stock was incredibly high. Big players make big plays and big games, baby. Spoken like a true ex-athlet. Now, time for our snack back to the day. This one tweeted in by Tara Savage from lovely Providence, Rhode Island. Love the East Side Pockets. 95% of avocados grown in the state of California are hoss avocados.

Yeah, they are. But the name Hoss, that comes from the mailman who patented, which we didn't know you could do, hoss avocados. He pivoted from postal work to avocado work. Yeah, he did. His name was Rudolph Hoss. And he actually bought the... seedlings from a farmer back in 1926. And then get this, he, I didn't know you could patent food,

but he patented that seedling avocado in the year 1935. And then get this, the original Haas tree stood and bore fruit for nearly 70 years in La Habra Heights, California. I'd love to know who has like a wood, hardwood countertop from that Haas avocado tree. It better be the Haas family. Snackers, we loved being with you this week. You look fantastic. Have a really good weekend. Quick shout out to the Snacks Clubs on Twitter and Instagram, by the way. It's a fantastic group of clubs. First, we've got Robin Hood Snacks Review, which whips up the takeaways of our takeaways every day. Then it's the snacks fans, which, like, finds the most fabulous gifts I've ever seen for every story we do.

And then Ted Willett from TBCY, the best clips yet, makes the audiograms of snacks, and he just does it. It's incredible. They're fantastic. You put in work every day, and we're blown away by it. Honestly, you're the best ones yet. Everyone follow those people today, not necessarily, yes. Have a great weekend. and we'll see him on day.

Can't wait. And before we go, Snackers, happy birthday to Ron Marks in lovely Las Altos, California. And Macca Isanabayuchi in D.C. And Matt Williams in Melbourne, Florida. And Mike McDonald in Birmingham, Alabama. And Jess McDonald, taking the CFP exam today. Probably related to Mike.

Happy birthday to Mark Casada in Chicago. And Vince Whaley in Atlanta. And Kyler Evick in Somerville, Massachusetts. And Katie in Boulder, Colorado. And Andrew Nillis in Spirit Lake, Iowa. And happy birthday, John Dewey in Breck. and rich Colorado. Congrats to Phil McCauley, who just got a new job in Mississippi. Lola, congrats, the beauty business. It is back open in Union City, New Jersey. That is terrific news. And congratulations

to Iman Lindsay, who, like my wife, is in her third trimester. Send us a pick of the bass in it. Honestly, we actually want to see the pick of the bass. And tell us how to spell it. Please, and the instructions. This is Jack. I own stock of both Netflix and Palaton. This is Jack, and I watch Netflix from my Palaton. 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 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.