The Best One Yet - Slack is now public, Netflix’s strategic reveal, and Apple’s trade war letter

Episode Date: June 21, 2019

Slack shares jumped 49% on their first day of trading, so we jumped into the company that thinks it’ll replace work email within 7 years. Netflix’s Adam Sandler and Jennifer Aniston movie set a personal record, but it’s the number Netflix shared that entertained us. And Apple’s letter to a US trade rep about moving its factories is a key development in the trade war.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 snacks. Daily, it is Friday, June 21st. Summer solstice. Longest day of the year? Longest day of the year. The best one yet for a lot of reasons here. Unlike three ways.

Longest day, straight up T-boy for snacks. And the S&P 500 hit a record high yesterday. Not too shabby. Basically, we're still on the high from Jerome Powell saying yesterday. Basically, the Fed has markets backs and we'll probably cut rates. The nation's central bank making some moves. Now, three wonderful stories we got, including a really big one here. Slack.

Yes. The email disruptor. is just traded on the New York Stock Exchange for the first time. They rose 50%. Not too shabby. It wasn't an IPO. Key distinction here. We're going to jump into the difference. We're also going to jump into the company's business. Number two, what we got? Netflix set a PR this weekend. Okay, they launched a movie. It's with Adam Sandler, Jan Annistan. I haven't watched it yet. She's incredible. But like 30% of Netflix users did watch it, and that says a lot about its strategy. Didn't know these kind of numbers. Netflix never releases them. Also didn't know Adam

Seller was still making movies over here. Third and final story. Talked for some Apple? Hit me. It sent a letter. to the United States Trade Representative about these tariffs with China. Handwritten? Yeah. A plea, a threat, an insult, and a compliment. All we're in the letter. We're going to jump to all for it.

This is a key development in the trade war. Now, before we get to all that, can we talk about our buddy, Ed Sheeran over here? Finally. The voice of a generation. Talk to me. I mean, we're thinking perfect, shape of view, thinking out loud, photograph, castle on the hill. Do I have to go on? I've mentioned on this pod that the Beyonce and Ed Sharon Perfect duet, unbelievable.

I know. We've been there before. Now, he's on a concert right now that is setting a record. Well, it's a two-year-long conference. It's like one long concert. That's an epic situation. And so far, Ed Shearren has grossed $600 million in ticket sales. He's on pace for $750 million, which would be a world record for any concert tour. What makes this really interesting from a business perspective is he doesn't pull the kind of moves you'd expect at Schram to pull. Yeah, he's not like hitting you with whatever. Ticket sale fee here, printing fee there. The average ticket price is $89. Taylor Swift's average ticket price is $116. Yeah, but let's be honest. Can he charge as much as Taylor Smith? Well, he's not doing VIP tickets. He also does. surprise free front row seats for his fans. So he doesn't mind losing a lot of money on this, but he's still making a lot of money. He's kind of a man of the people, and he's about to pass

U-2, which had the previous record from its 2009 to 2011-360-degree tour. Ed, we're throwing this out there. If you want to do the next recording of our disclosure, you're welcome to. You know who got the bronze, guns and roses? Listen to these key words, and then we'll hit our three stories. You're tuned in the 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. a robberhood 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. Snacks is digestible. Business news for you. Robberhood Financial LLC. Member Fenra slash

SIPC. For our first story, Slack just went through its direct listing in the stock of 50%. Direct listing. We're going to talk about that in a second. It's similar to an IPO. Just a little bit different. Same idea. The shares are trading. Black's been a private company forever, and now it's a public company. Speaking of shares, interesting ticker symbol here. We love what they do with it. Every company has to pick a ticker symbol for the New York Stock Exchange. You got GM for General Motors. You got F for Ford.

Creative. Slack is W-O-R-K. Tell them what you're doing. Now, if Snacks Daily had a ticker symbol? I know what you're thinking. T-B-O-Y. Let's run with that. Now, in the meantime, Jack and I jumped straight in Snack style to the S-1.

The S-1 is the most helpful explanation of Slack. It's like it's gating profile. It says the good things about it, the bad things. And they got to do this before they actually list their shares publicly. Now, the company's goal here is to replace the use of email within organizations. That's what Slack is. It's a software that's basically, I like the way you usually describe this. Yeah, pretty much if, like, email was on one side of the family tree, an I message was on the other.

Adorable. The product of those two is Slack. That's what it is. It's an incredible tool for making you either more productive or an incredible tool for making you incredibly procrastinate. Now, the CEO says, thanks to Slack, email will be gone in seven years. Bold claim. Very. But if you're using Slack, you may have noticed you're doing a little less office email.

Yeah, people are doing it at work. You can have direct messages with one person, or you can have a group of people, or you can set up a channel for a certain thing. There's like a, you know, baseball trivia channel within a company. Just like there's the channel for actually producing whatever it is you've got to be doing work on. Right. A couple fun facts about the company. Stuart Butterfield founded the the company. Sounds like a fake name. He actually founded an online video game and built this little tool on the side so that his employees could communicate better. Turns out the tool had more potential. that tool ended up being Slack now the like $20 billion company. Side hustle becomes full hustle.

Further, and your friends probably don't know this. This is going to share. Slack stands for something. S-L-A-C-K. It's a searchable log of all conversation and knowledge. Nice acronym. I really appreciate that. Now, let's get to the financials.

Talk to me. The company has 10 million daily users. These are pretty much all employees of a company. Right. And they're pretty much like a lot of them in the Bay Area. Right. 95,000 paying accounts. So there's 95,000 companies that have signed up for Slack.

What we thought was really interesting was that the highest tier, so the companies that are paying the most for subscriptions, $100,000 or more annually, they're growing really fast. 93% more high-tier users than the year before. But before you get too excited about Slack, keep in mind that just like a lot of other tech companies that have IPOed, it's losing money. The S-1, you've got to say, are good things and your bad things. And they're losing more money next year is what's expected. So the big question we haven't answered. Everyone is asking this question. What is a direct listing?

And why did you do that instead of an IPO? which rolls off the tongue. Spotify led this trend in April of 2018. It did a direct listing. And it basically said, everybody knows what Spotify is already. Right. You're aware of our companies. You know our brand. You're listening to us. Let's just make our private stock public randomly one day. We don't need a bunch of bankers to go on a month-long tour explaining who we are. And that's the core difference between an IPO and a direct listing is an IPO. You've got bankers pitching your company, getting people to buy the shares, and also taking a big fee out of that. Right. So the two big benefits, you'd

don't pay as much fees to banks. If you do a direct listing. And with a direct listing, investors like employees who've been paid in shares or venture capitalists who invest in the company, they can sell right away. And you can only really pull this off if you're a brand that's well known, like a Slack or a Spotify. So, Jack, what's the takeaway for our buddies slacking over at Slack? This is all about ROC.

Return on communication. You've heard of R.O.I. Return on investment. Slack's pitching itself as the same concept for companies. Yeah, this is Slack sales pitch to companies that are thinking about switching from like Gmail to Slack. Pay the money to get Slack for your organization. That's an investment.

And that investment will make your employees communicate better. And that will lead to more productivity. And that will lead to more money. And that's why it's an ROC, a return on communication. It's the same thing with relationships with your significant other. Better communication, better life, better promise. For our second story, Netflix just launched a movie that hit a record and then they revealed some numbers that tell us a lot about its strategy.

Which is unusual. They usually don't tell us much. about this. They don't. What are you been Netflixing, by the way, recently? I can't get off of the office. I'm on my third, third reroute. I can't get off of our planet because I've got an emotional connection to a gecko now. Dwight K. Shrut deserves a spot in the Museum of Natural. Dwight K. Shrewt should be on our planet. Now, we've got to talk about the actual movie here. It's called murder mystery. It came out this weekend. You got Adam Sandler and Jen Aniston. Great combination. Best combination since Adam Sandler and Drew Barrymore.

We just watched the trailer. It looks, they called themselves a Netflix film. It's not a film. No, this is a film. A couple, they're trying to rekindle their love, they go to Europe, and then they get friend for a murder. There's a murder. There's a yacht. There's an older rich guy. So get this. 31 million people viewed the movie on Netflix over the weekend.

And we don't usually get those kind of numbers. No, we don't. The company has been like very boxy and not telling us what people are watching. No, and this time, they not only came out and said almost 31 million. They said 30 million, 869,863. They got really specific this time. And get this. That is 10% of the viewers on Netflix.

That makes this the biggest opening weekend of any Netflix. film. Yeah. Now, quick question. What does viewed mean? Exactly. Like in Netflix terms? In Netflix terms, apparently it means you've watched 70% of the movie.

Right. At a box office, you buy a ticket and that's all that they're recorded. So this leads us to a couple interesting insights here. The first being the fact that you can't really compare this to box office. No, because you don't have to buy a ticket to watch a Netflix movie. And a lot of analysts were wanting to compare this to a box office. Yeah, you might have seen a number like this is equivalent to a $130 million box office weekend or something. Like in ticket sales.

But people don't even have to leave their... house to watch this. Right. You can even watch part of it, you know, with Drew Barry Merr's character getting set up on Friday and then finish the film with the ending, which we won't give away on Sunday. Another fascinating point, it's not just Billy Madison and Happy Gilmore fans from America that watch this. This movie was incredibly international in terms of the numbers. The majority of the views were outside the United States, which fits with Netflix's strategy of really pushing itself abroad. So that brings the big question. Why did Netflix suddenly to start to release numbers on a movie when they never really do that? Great question. And I

I think the key here is the heat is on, and investors are wondering how it's handling the competition. Disney, which has provided a lot of great content for Netflix, it's pulling its stuff off because it's launching its own streamer in November at Disney Plus. Disney Plus, it's seven bucks a month that's also putting price pressure on Netflix, which costs double that. And in case Netflix wasn't worried about Disney, it's got to worry about the other push of a lot of other streamers. Amazon, Hulu, HBO, Comcast, AT&T, they all have streaming platforms coming or already, and

they're all pushing their own original content. So, Jack, what's the takeaway for our buddies over at Netflix? Netflix has the most valuable billboard imaginable. It is Netflix's home screen. Netflix.com. Any other movie production company has to rely on distributors, advertisers, get the word out there. They have to connect with the whole ecosystem. How much time do you spend every month on Netflix.com trying to figure out what to watch?

Netflix is the movie ecosystem. It owns the advertising and it owns the distribution. It's also a billboard. For our third and final story, Apple just urged, threatened, and begged for terrorizing. so China's end, and this is a key development in the trade war. Yeah, let's give a little context. You got to drop a little context. 25% tariffs are about to drop from China on all the Apple products that we love today.

We're talking iPhone, MacBook, iPod, iPad, AirPod, Apple TV, they're all made in China. They are. So far, they've been excluded from the tariffs, but they're about not to be. So what's going to happen is Apple's going to have to pay 25% tax when it picks up these big shipping containers in, like, the Port of New Jersey. And that leaves Apple with two options now. It can either raise prices to pay for those taxes, or it cannot raise prices and lose some profit. Right. So we might be facing like a $1.5,000 iPhone. So Tim Cook, the CEO of the company, he just sent a letter to President Trump's

top trade negotiator Robert Lighthouse. This is the news that happened yesterday. And it had a little bit of sugar, a little bit of spice, a little bit of salt in this world. This was quite a letter. This thing sounds like a relationship advice situation. What else he got? Let's start with the sugar. He basically said, Mr. Lighthizer, your boss, President Trump, who by the way is doing a great job, it'd be great if he could cancel the tariffs because it's really going to hurt Apple. And then he said, you know what? And this is the salt part. These tariffs are going to hurt Apple a bit and they're going to help the foreign competition because of that.

And we don't want to help the foreign competition, do we? No. And then he dropped in a little bit of pepper to like pizzazz the thing up. He basically said, if these tariffs do happen, we will cancel part of our U.S. spending. And that big spending pan was $350 billion that Apple wanted to throw. to drop on the U.S. economy adding jobs here. Yeah, they announced this back in January of 2018. They said over the next five years, we're going to really help the American economy,

but maybe they won't anymore if these tariffs hit. So, Jack, what's the takeaway for our buddies over at Apple who just kind of threw a kick in the trade war? Companies are moving entire factories. We're talking huge facilities in order to avoid these tariffs. Personnel, everything. But not how you would expect them to. No, the factories with tariffs were expected to come back to the United States. Right.

That's what the politicians are saying. That was the point of the tariffs. But the Wall Street Journal just reported yesterday that Apple is asking its suppliers in China to basically come up with plans to move their plants to Vietnam and to India. And we're seeing the South Square, too. Ford is moving its Buick production from the USA to China. Right, to China. From the USA to China.

And Harley Davidson is doing the same thing. Yeah, they're doing like a joint venture on a bike, right? Like a small bike. Yeah, a small bike, but it's going to be made in China instead of the U.S. To avoid tariffs. To something we've said before that seems almost pillow-worthy, Jack. There are no winners with tariffs. So the next step?

The G20 summit next week in Japan. President Trump meets with President G. Trade war is coming up. Extended meeting. Can you whip up the takeaways for us, Jack? Slack, which is a public company now is urging companies to invest in their ROC return on communication. If you're not Slack and work right now, just picture this I message and Gmail baby. Netflix?

Netflix just got 31 million people to watch an Adam Sandler, Jay. an Anniston movie because of it's super billboard. We should probably point out this movie was panned by critics. It's not a film. We've got to be fair and balance. Third and final story, Apple is urging slash begging slash threatening the Trump administration not to slap your iPhone with tariffs. There is no winner with tariffs.

Now, time for our snack fact of the day. And we're going to do this one in honor of Slack, a workplace-focused app. Monday is the most common sick day of the days. Yeah, Monday through Friday. Monday is the one to do it. 35% of sick days are claimed on Monday. Now, then there's a wild stat about the beginning of the year. Yeah.

Strangely, 13 of the top 20 most popular sick days happened in January. January. And then fresh, like the first week of January, gets like five of the top 20. Yeah, New Year's resolution, not coming into work. Also, the least popular sick day? Friday, which only gets 3%. Now, a couple other stories we're covering in our snacks newsletter. We got a key one on dividends.

Interest rates are like looking like they're going down based on what the Fed said. And this is making dividend stocks look good. We're going to jump into that. But we also got to give a shout out to our buddy, John Flowers. We haven't actually met. On his way to work yesterday, he pulled over to take a pick of the Papa John's Shack's. He heard our snacks called action. We were curious what it looked like live.

And the man got us some photos live. First of all, it's 470 is the area code for the snack. 470 444 Shack. Also, Shack's feet look gigantic. Yeah, and that thing is to scale that photo. Thanks, John. Snackers, loved potting with you. Have an incredible weekend.

Just enjoy the weekend. We'll talk to you Monday. 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, 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 a research report and is not a business report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.