The Best One Yet - “Some dance to remember, some dance to forget” — Square’s Hotel California. One Medical’s line-cutting. Target’s optionality.

Episode Date: March 3, 2021

We’ve simply never seen numbers like what Target just served up. We’ve also got our 1st big case of a potential vaccine line cutter, dropping One Medical’s stock 15% in the last week. And Square is hoping to become the The Bank of Mom & Pop… with a Hotel California strategy.$TGT $SQ $ONEMGot 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 Wednesday, March 3rd. After a fantastic Monday, stocks dipped a little bit yesterday. It was so good, but this is our best Snacks Daily podcast yet. Jack, first story for the TBIOI. Target's revenue has grown more in the past year than it did in the previous decade. These numbers were wild. The mall is dead. Long-lived Tarje. For our second story, one medical is the Equinox Gym for doctors offices, and the stock has fallen 15%. Okay, so reports are it may be the first corporate vaccine cheater. Wild story. For our third and final story, congratulations on the birth square. You are now the proud parent of a baby bank. It's a bank.

Jack is a bank. Square is having a bank. And speaking of babies, before we jump into that wonderful mix of stories, Jack, I'm going to turn the floor over to you. Snackers, there's one person in my life who I spend more time with the Nick. and I spend probably 60 hours a week with me. It's our editor, Andy. It's my wife, Alex. Okay, okay. I thought it was our podcast editor. Perfect timing because happy birthday, Alex. We hope you have a fantastic one. Yes, happy birthday to my beautiful wife. She looks rad and radiant as she rocks this pregnancy. Jack, I whipped out the whiteboard calendar over here. It looks like we're one month and two days away from the due date.

Your mark is sharp because April 5th, we have a boy scheduled to come to the Snacks family. And the status, Jack, how would you describe this status of this situation? We are deep in the third trimester of this pregnancy Snackers. Actually, Snackers, prior to this recording, Jack was the first ever parent to divide gestation periods into quarterly earning season. This was the fourth quarter. That's right. And the fourth quarter of a pregnancy calls for lots and lots of dates.

Yeah, it does. A lot of dates. So Snackers, at some point in the next month, this little tea boy is going to be born. And at some point, relatively soon, Jack's going to have to jump. jump off the mic, pack up that baby bag, and forget about takeaways for, you know, a few days. That's right. Snackers, we want to let you know that when this baby comes, I'm going to be taking the week off. Nick's going to be taking the week off. And we wanted to give you a heads up. This guy's got to make sure the baby has a comfy mattress, mattress, mattress. Who wouldn't?

That's right. And we're a team. We do this pod together. Yes, we do. So we're taking a week off for the baby boy's birth. Now, we're still going to take care of you. We've got a daily newsletter during that birth week that you can enjoy. And Nick's going to jump on the mics and let you know in April, or maybe sooner, when you should check out that email newsletter. But until Jack's real boy arrives, the next month, we're going to be whipping up some tea boys. Let's get 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 the hearing food is 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. Right. Snacks is digestible, business news for you.

Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Target just announced fourth quarter earnings with some insane numbers, Jack. They're really impressive numbers. They're also letting shopers shop in every imaginable way and unimaginable ways. Customers seem to love this. Shocker, yesterday another huge retailer enjoyed their best Christmas ever thanks to COVID-19. Jack, the first numbers we saw of what were the core ones. Target announced that overall sales in the fourth quarter

jumped 21% to $28 billion. It sounds pretty good. Sounds pretty nice. That's two times a lift. But get this Snackers, revenues at Target grew more last year. $15 billion they grew. Then in the previous 11 years, combined. A decade happened in a year.

Didn't like Lenin say that or something? Someone wasn't talking about Target when they said that, but they should have been. And get these numbers, Snackers, in the fourth quarter. quarter, same-day delivery from Target.com, jumped by 212% from the year before. Jack, that 212%, it's cute, it's nice, I like it, but get this, curbside pickup, jumped 500%. I think it jumped, though, from like 1 to 5. It's all about the expectations. But here's the thing Jack and I find fascinating about Target. We're living in a new reality. Target has replaced the mall. Is this our definition or? This is the Miriam-Webster definition.

This is Merrick. Okay. A mall. A large building or series of connected buildings containing a variety of retail stores and typically also restaurants. That's the definition of a mall, but now that's what applies to Target. That's thanks to Target store within a store strategy, it essentially makes Target a mall. Okay, first they got the Casper mattress stores within a store, then they got the Disney ones, the Ulta Beauty ones, and last week, we found out they're doing Apple stores within a stores. We call Inception Retail. Yeah, we do. Somebody call Christopher Nolan. Dream within a dream, within a dream, within a dream. They also packed in 46 of Target

its own, quote-unquote, owned brands, which gives shoppers the sense of variety like an old Macy's department store used to. You're walking around, you're an aisle 6, you think it's something fresh, it's actually, it's owned by Target. Someone should tell you. So are those other 45 brands. They're all Target. They're athleisure brand, by the way. Just notched a billion dollars in annual sales. That's like same ballpark as Lulu. That's Lulu Lemon Ballpark, and they only launched the brand like a year ago. Oh, and by the way, they're also doing groceries over at Target. It's a fifth of their business. They're offering something that malls never could fresh food.

Well, I can the Bloomingdale ask for the frosted flakes you're going to get laughed out. So, Jack, what's the takeaway for our buddies over at Target? The most underappreciated driver of loyalty is optionality. Snackers, Target's showing us it's not about having one online buying option or one offline buying option. It's about having a buffet of buying options. It's a spectrum. It's a variety of seamless options for customers to get their tariff.

Target's stuff and it's driving loyalty. All right, listen to this breakdown. Target has got in-store buying. They've got online buying. They've got curbside pickup. They've got curbside car pickup. They've got same-day delivery. Oh, and they've got one-hour delivery.

It's like they're stealing from Burger Kings, have it your way. It's exactly what they're doing, Jack. Oh, and customers who are using more than one of those options, they end up spending an insane amount more than your typical customer. Target calls them multi-channel customers, and they spend four times more. at Target than customers who only shop in the stores, and they spend 10 times more at Target than shoppers who only shop online. All right, Jack, I feel like we have to let that last one sink in. A customer who shops in more than one way at Target spends 10 times more than someone who just

shops online at Target. Target invested in optionality, and it's driving insane loyalty and spending. For our second story, Jack, we got a line cutter here. Cutting the line. It's not cool ever. Not a cool thing. If you cut the line, shame on you. But one medical stock dropped 15% on reports it's letting patients cut the vaccine line. Extra shame on you. I see what you did there. But first, some good vaccine news. Please, Jack, can you lay it on us?

Just give us something good here. Johnson and Johnson's vaccine, which requires only one shot and no ultra-freeze got approved by the FDA. Yeah, turns out we're going to have like enough for 100 million Americans by June. That's a good number. That's a nice round number. They're also teaming up with a former rival, Merck, who failed to produce their own vaccine. They're going to let them use two factories to make their rivals vaccine. All right, this is classic Mighty Ducks D2. You've got everyone from Minnesota and across the country all on Team USA. And Nick and I just got push notifications on our phone. President

Biden says that by the end of May, there will be enough vaccines for every American adult. Jack, enough with the good news. Hit me with the feel mad news. One medical, a publicly traded company, is reportedly letting its high-end clients cut. the vaccine line. Snackers, you may have seen a one medical in your neighborhood because there was probably a bouncer in a line. One medical is the Equinox gym of healthcare. It's tech driven. And insist you'll never have to put pen to paper. There's succulence everywhere. The doctors wear Jay Cruchino's. It's true. The doctor will see you now. Please proceed to the $1,200 West Elm sofa. It's $199 a year to join. And then hopefully you have insurance and you don't have to pay anymore.

Yeah, they're like 90 locations, they're doing telehealth. And if like your rent is more than $2,000, there is a one medical in a dry bar, about an e-scooter ride away from you. And if you're a member, you can get appointments at any of those locations. It's pretty convenient. Okay, so clients at these one medical locations, they're your 30-year-old city millennials with like a 110 over 50 blood pressure. Perfectly healthy individuals. In other words, the bottom of the priority list for the vaccine. And yet, according to NPR, the doctors at one medical, are letting one medical patients cut the vaccine line early. 20 and 30-year-olds,

especially those with connections to one medical's top corporate leadership, they're getting the vaccine early. It turns out 70 ineligible people in just one county in San Mateo were able to get these vaccines. Now, Congress finds these allegations credible enough to start their own investigation of One Medical. And Wall Street tanked One Medical stock 15% since NPR's report back in February 24.

There have been vague reports out there, about inequitable distribution of the vaccine, and it's going to the well-connected and the wealthy, and not those necessarily who need it the most. Well, One Medical is now the biggest name linked to that ugly story. And Jack, I feel like you and I should both disclose that I was like, out of One Medical about a month ago, and you were also a client in the past. They emailed me 13 times reminding me my membership was about to expire. Honestly, the offices actually are fantastic.

I think it's a great date spot, you know. So, Jack, what's the takeaway for our buddies over at one? one medical. Bad apples is a bad business excuse. Snackers, you might think any press is good press, and now millennials are going to flock to one medical facilities for early access to the vaccine. That would be a false line of logic, though, because eight local health authorities who are in charge of the vaccine supplies have cut one medical off. They're not getting vaccines anymore. Customers crave the vaccine, but now one medical doesn't have the vaccine in Oakland or San Francisco or Seattle or a bunch of more offices. It's been taken away. Now, one medical denies these

allegations, but they use the important word knowingly in their denials. Jack, I got the exact quote for you here. One medical does not allow for ineligible persons to be vaccinated knowingly. Right. Which suggests it's a bad apple problem. There's some doctors and some clinical staff that violated the eligibility rules themselves. And one medical said they fired those people who did. But strong ethics codes at companies and good policies that are enforceable, that could prevent apples from turning into bad apples. But even if those bad apples are only a few, Wall Street still thinks one medical is worth 15% less as a company.

For our third and final story, Square is officially the bank of mom and pop jack. That's what it is. It's all part of Square's Hotel California strategy. It's so good you can never leave. Now, Snackers, there are two ways that you touch and that. you know Square, the company. You can pay back your buddy Timmy for spotting you for pancakes Saturday morning. He's your buddy. That's what he did. You may as well.

Or you can like hold your phone close to one of their little dongles and pay for something at the farmer's market. Eh, it's adorable. Well, that first one is the cash app. The peer-to-peer payments app, like Venmo, it's the fastest part of Squares business. You've seen this before. The other one is the dongles. You've seen these before, too. The little white payment processor used to be for swiping. Now it's for like hovering your phone close to. You're dropping 14 bucks on a latte. You have hovered over a square dangle once or twice. Now, both of these products let you move your money without touching human beings. Therefore,

the stock price for Square tripled in 2020. But on Tuesday, Square stock jumped 5% for a non-cash app, non-dongle-free reason. It's actually because of a tweet, which is ironic because Square CEO is also the CEO of Twitter. Good point, Jack. After four years, The well-bearded CEO of Square and Twitter, Jack Dorsey, tweeted a bank emoji. If so facto, Square has been approved for a bank. Yes, Square announced yesterday, Square Financial Services, has been approved by the FDIC. Not bad. The state of Utah, and it's launching banking services right now.

And it is the life goal of the Square Bank. Basically, be the go-to finance provider to all the shops using all the Square payment dongles. If a mom-and-pop falafel shop needs a business loan, it's going to turn to Square, not Bank of America. That's the goal. Square thinks it kind of has an interesting competitive advantage here because of those dongles to be making these loans. Yes. Square makes the credit card reader that their clients use. So it intimately understands the sales revenues and the sales streams of its clients. Jack, I feel like we're at a example inflection point here. If you're Sam's Slammon-Sadden sweater store and you've got the square dangle,

you've been selling sweaters, maybe need some cash right now. now, what's the situation? Square knows that Slamming Sam is slamming Sam and sweaters. And he's been selling like two and a half thousand sweaters a month. He wants a store for a second Sam Slamming sweater store. Square knows that Slamming Sam is good for it, because Square can see Slamming Sam, slamming Sam and Sam and sales. So that's the thesis, Jack. Square can use the sales data to customize loan terms better than a typical bank. That's what Square's thinking. So, Jack, what's the takeaway for our buddy slamming over at Square?

has found it's Hotel California. Hotel California, a product feature you can check out anytime you like, but you can never leave. The higher the cost of switching from the product, the longer the company gets to keep that customer. And with Square's physical credit card machine, these mom and pop shops could pretty easily just switch. That was a pretty straightforward switch. You just unplug Square's white credit card dongle. And plug in the one with colorful buttons. That's the alternative. But if that mom and pop shop also has a $50,000 loan over five years from Square financial services, then it's way more hooked and it's a way harder to ditch Square. And if you can never leave Squares Hotel California, then Square can

price things higher over time and make more profits. And some dance to remember, some dance to forget. Jack, my friend Kenyo, whip up the takeaways for us over there. Target's sales grew more in the last year than than the previous 11 years combined. The most underrated driver of loyalty, optionality. One medical stock is down 15% since reports it's given the vaccine to perfectly healthy youngsters. It's just a few bad apples, but that's a bad business excuse. For our third and final story, Square wants to be the Bank of Mom and Pop Shop.

It also wants to be the Mom and Pops Hotel, California. Now, time for our snack fact of the day, this one sent in by Aaron Ward from lovely Orlando, Florida. Virginia Hall was an American spy from Baltimore, Maryland, who worked under undercover for England during World War II. She was considered the most dangerous allied spy by the Nazi German regime. She coordinated derailing Nazi supply trains and prison breaks of fellow ally spies. All of this, after surviving a severe hunting accident and losing a portion of her left lake. By the way, extra snack fact here, the Germans gave her the nickname Artemis.

She also did all of this with an artificial foot, earning a second nickname from the Germans, The Limping Lady. Insane, you get the triple snack fact out of this. Snackers, send us your snack facts. We've actually got a link in the episode description of this podcast. And happy women's history month, send us your snack facts about those. Snackers, you also look fantastic today. Have a fantastic Wednesday.

Nick and I'll see you tomorrow. Can't wait, check. And before we go, congrats to Josh Garowski, 10-year anniversary of donating his kidney over in Chicago where they do logistics. Josh, you're literally a life-saber. and congratulations to Scott Lorsch and Casil Crystal for celebrating their anniversary in Scottsdale, Arizona. And Madison Sam, also an anniversary over in Massachusetts.

Congrats to Clay Welch for having his fourth baby in Bentonville, Arkansas. And Matt Levinson just got the new job down at Cupertino and Apple. Happy birthday to Michelle Nibs-Niblock in Buffalo, New York. And Brookoki in Brooklyn. And Katie, also in Brooklyn. And Patrick Moran in Shoreview, Minnesota. Happy birthday to Josh and Jeremy Schmidt, twins from Springfield, Missouri.

and Marcus Pinckney in Henderson, Nevada. And Latoya Freeman in Gaddahi, Wisconsin. And Sharon Lee in Memphis, Tennessee. And Shlose, who's 25 celebrating her birthday in Augusta, Georgia. And Nicholas Andrew Underwood celebrating his birthday weird because those are my two first names, too. Your only difference is your last name, Nick. And to anyone else who's celebrating something today, make it a tea boy. That was weird.

Celebrate the wins. So strange. This is Jack, Nick owned stock of Square and Apple and Lulu Lemon. 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.