The Best One Yet - Starbucks selling its mobile app, Hasbro jumps 10% (thanks to The Avengers), and China’s new stock market

Episode Date: July 24, 2019

Forget coffee. Starbucks made a strategic tech investment so it can start licensing out its successful mobile app technology and loyalty program. Hasbro shares popped 10% courtesy of its critical Disney partnership. And China’s new tech-focused stock market debuted with one purpose: Make sure Chinese tech companies IPO in China.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 is Wednesday, July 24. And this is the best one yet. I didn't know what you're going to go with there. Now, actually, we are very excited about it. Stocks jumped because there were a whole bunch of great earnings reports. Too much to us to cover.

I'm like a little overwhelmed over here. Can I tell you our three stories? Can you please proceed? There are three things I want to say about Hasbro. First, it's based in Rhode Island. Very nice. New England pride. Good.

Second, it's making too many toys in China. And third, it's basically a Disney subsidiary. I don't talk the words. That's a bit of an exaggeration, but it took the words out of my mind. I thought we had momentum. Second story, Starbucks is about to report earnings later this week, but we found a more interesting story. It's kind of an a aperitif of the earnings report. I like the way you phrase that. It's making a tech investment. It's getting into software. Third and final story. China has a new stock market. Brand new. Super techie. Very fresh.

Jumped 140% on the first day of trading. And it has a very specific purpose. Keep Chinese companies IPOing in China and away from you. I want to get into all three. these stories. Before we do, though, we got to talk about primification. Yesterday, we mentioned that Uber is coming out with a pass, which is basically Amazon Prime, but for Uber. Yeah, they're like combining everything into one Prime-ish membership. We asked Snackers to let us know what is the next business model to get primified. Snackers don't disappoint. They tweeted us a lot of options. Are you ready for Primetime? We created a very nice mix here. It's Prime Time on Snacks Daily. So Anthony thinks that Apple is going to come out with an everything in one bundle, Prime style, Apple Music, Apple Podcast, Apple Pay, Apple, Apple, everything. Sykieran went a little meta on us and referenced a company we referenced the other day and said Turro could become primified with car sharing. 20 bucks a month to get to rent whatever there is.

Throw a membership on it. Jay Shaw mentioned that barbershops can get primified. I like what I'm going. I only need a haircut once every month and a half, but I might go in to get a razor. Just some banter. It's like therapy. Some sports banter. I just want to talk to you.

Mark Pibblato described what is basically RIEI Prime, unlimited access to adventure equipment like mountain bikes and kayak. We had a double-douzy here. We had Alyssa F and SkyRG saying airline membership should become a thing because that's way better than loyalty programs. Finally, Nick Quintana thinks an electric plan membership in the deregulated energy market so that for a monthly membership, you get wholesale power prices instead of the retail rate. Yeah, Nick, we're just impressed you typed all of that. There was a lot of kilowatt hours in that was spot. Extremely wonky, and we're just proud that you came out with this. Snackers, thanks for participating.

These are all wonderful ideas. and I hope that the execs that these companies are listening. Send more our way. In the meantime, listen to these keywords and then wind our stores. You're tuned into snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks are about to hear, rain, food, it's 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. Financial LLC, member FINRA slash SIPC.

For our first story, Starbucks has a new plan to sell its mobile app basically to all the other restaurants. Now, Starbucks, you know, they're up in Seattle, they're getting ready for the earnings report, which comes out tomorrow. We thought this story was way more fascinating. We're going to go ahead and appertief this. I don't even like coffee. I just get the on milk lattes and drink the foam. Starbucks signed a deal with a company called Brightloom, aka Eats, a former name. Let me give you the sales picture, please drop it on me.

You know how amazing Starbucks's mobile app. I'm familiar with the term. Well, your restaurant chain can have that mobile app prowess to through Starbucks, through this company called BrightLoo. Basically, Starbucks has invested in this tech startup. They're getting a board seat. They're getting equity. And they're getting this partnership that's going to make their mobile app abilities go

potentially international. So maybe Dunkin' Donuts can use the same Starbucks app, but they awkwardly won't have to work with Starbucks. They can use this company called BrightLoo. Extremely strategic. Now, what BrightLum and Starbucks are building is a powerful resource for the whole restaurant and coffee shop industry. All right, here's the reality.

Starbucks, even if you don't use it, you've got to recognize this. They've figured out how to make mobile apps really optimized for restaurants. They really, really have. You can order ahead while you're sitting at your desk through the app. Don't have to worry. You can pay through your app. Don't have to wait in line. You can get through the line super fast through your app.

You don't have to complain about the line. And let's not forget the stars. This is the big thing. That free latte after 125 stars or whatever it is? That's a big deal. And there's nothing better than the free, oh, the only thing better than the free latte, telling everyone that this was. the free latte you got. True. So through Bright Loom, Starbucks is licensing its brilliant,

in-house developed mobile app technology so that other restaurants can use it. So like if you're a restaurant out there right now and you want to have a loyalty program, you got to get a loyalty program startup to work on that. And you got to get a mobile payments company to help on one end. And you got to get a customer relationship management company up on the other. So if your project juice, my favorite California-based assa-e-e-ball. Jack's like three mangoes deep right now. You might have to use level up for loyalty, stripe for mobile, payments, and that's a big pain, or you can use Bright Loom with this Starbucks. He actually has like some purple stains on a shirt right now. Or if you're Cambodian sandwich company in New York

Numpang, which is like my go-to favorite with the chicken sandwiches, you're going to use like Salesforce for the customer relationship management, and then you got your team working on personalizing the whole thing back in like, I don't know, I'm telling you, I'll eat two assaibles a day if I don't have to wait in that line at Project Jue. So Jack, what is the takeaway for our buddies over Starbucks? I want to quote my boy Heath Ledger, aka the Joker, if you're good at something, don't do it for free. The CEO of Starbucks described it perfectly. He said, at Starbucks, the results we've seen in customer loyalty and frequency within our digital ecosystem speak for themselves. Now, these numbers actually can't speak, so I'll speak them.

17 million people have the Starbucks loyalty app. And 40% of sales at America's Starbucks chains use the app. It's pretty amazing. So if Starbucks can license out this app technology well, it could become an entirely new coffee-free revenue stream. Licensing its software. And get this, only 31% of America's restaurants except mobile pay currently. That's how big this opportunity is. For our second story, Hasbro just announced earnings, and we basically found out it has like a wonderful collection of Disney toys.

It does. Hasbro is based in Rhode Island. I love a good Providence visit. Now, I grew up with playing with Plato, which has a very distinct smell. Yeah, I still have it. And those Power Rangers, plastic action figures made in China. these factories. Now, by the way, Providence, Great Town, Home of the Antonio's

nice-lice rivalry. Home of Friar Dom, the mascot of Providence College. Of the east side pockets next to Brown, great gyros. They made design Plato and they made design Power Rangers, but it's all made in China. Now, 67% of their stuff is made in China. Sorry, not all of it. That's a good correction.

And it's actually announced yesterday that it aims to reduce that percentage of stuff made in China to only 50% because of the trade war. Great win for like India and Vietnam because they get to start making Hasbro Toys. Exactly. It's shifting from China to Indian Vietnam. Now, the stock jumped 10% yesterday, basically because of the event. Basically, thanks to the event. You gotta like Cassidy. It was the highest grossing movie ever officially as of last weekend, and so many Hasbro toy sales are coming from that.

Now, that's because, and this is a key thing you gotta keep in mind, Hasbro has been the exclusive toy maker for Marvel for like 10 years. Yes. And during that stretch, it has had 23 Marvel movies driving Heisbro toy sales higher. Does anyone even keep track at this point? Just assume there's a spinoff and a prequel coming next week. I'm thanking Wikipedia for that. And in the future, there's going to be even more Hasbro Toy Sales because of phase four. This is, it sounds made up. Phase four, it's not made up.

It sounds like part of a Marvel movie. It was announced at Comic Con in San Diego. It is apparently the fourth, like, episode of new Marvel characters and new Marvel TV shows. I just can't believe they named it phase four. It just doesn't sound real. It's all for Disney Plus, which is the new streaming service from Disney coming out in November. So we jumped in snack style to get a sense of it, and basically they're going to be working on toys for series that are brand new. Right.

So you're going to get a show called Black Widow. It's going to be like, you know, season one's going to have 10 episodes. Scarjo's in it. Starring Scarlett Johansson comes out in May 2020. Then you got another one like The Eternal, which is about immortal superheroes. I don't know superheroes could die. All new show with Angelina Jolie and Salma High coming out in November 22. Then you've got a blade remake because why come up with something new when you can do a remake?

Well, it's replacing Wesley Snipe. with Mahershala Ali, best known as Remy Danton in season one of Hasselphi. Key information to know here, Disney knows how to scale creativity and scale it fast. And Hasbro knows how to convert that creativity into toy sales. Material. So, Jack, what's the takeaway for our buddies up in Rhode Island over at Hasbro? It's not just piggybacking off Marvel. Hasbro's own franchises are actually growing faster.

They have got a beautiful deck. It shows all their beautiful toys at Hasbro when you check out their earnings report. Yes, it's a wonderful earnings report to flip through. Only thing we noticed, though, in it was that there are three minor Disney cameos, and that's it. Yeah, there's like a little Star Wars in one corner, frozen in another, and then this glimpse of Lion King. Barely. Besides that, Hasbro was showing off its own brands. Sales of toys for, like, brands that it owns itself, they rose 14% last quarter.

But sales of its partner brands, mainly Disney, rose just 3%. So Hasbro is, like, winning in a serious way. And 78% of its total sales are its own. own franchises, its own brands. We're talking throwbacks here. We're going like Magic the Gathering. Power Rangers. Monopoly.

Transformers. Good clean, fun. It's trying to build profit ecosystems of each of those characters and each of those games. Sounds very Disney-ish. For our third and final story, this one's a little wild. China's new techie stock market has officially open for trading this week. It's called Star Market. Very nice.

Day number one was Monday. Day number two was Tuesday. Welcome. How's it going? Has the first week. Trading has begun. This is China's very. version of the NASDAQ stock exchange. So think a stock exchange that kind of leans into its techiness here.

And in a very techy fashion, the stocks on the star market jumped by 121% in the first two days. These are Chinese companies that are going public in China on this exchange. But this isn't like every Chinese company. No, you have to fall into one of six industries, which China says has strategic significance. Right. It's kind of like a click. It kind of feels like they're playing favorites. I don't know. It feels like something from mean girls. We're talking things like information technology. Or smart manufacturing. Aerospace. New materials, which sound fancy.

Renewable energy. And then finally, biotech. Now, all of this sounds a lot like the industries in China's made in China 20, 25, like, let's dominate the world economy plan. Exactly. And that's why they're kind of giving them this new opportunity. But it highlights a challenge with Chinese stock markets that most people don't realize. Rules.

Rules. Because Chinese markets are focused on maintaining order. So, Chinese. stock markets have a number of rules. Rule number one, you cannot list in China unless you are profitable. Good luck Snapchat. That could never have happened. Exactly. If you don't think you're going to have profits in the future and you don't have profits right now, you can't list in China. Rule number two, on IPO day, the stock may not increase by more than 44%. It's capped. And think about all the stocks we've seen IPO in the U.S. this year that have surged. Crowdstrike,

Chewy, beyond meat. All of those stock gains would have been capped had they listed on China's stock markets. And then finally, rule number three, after IPO day, you're still capped just a little bit. 10%. You can't go more than 10% higher or lower after the IPO. So look at one of your favorite stocks that may have jumped in the last few days. If it's more than 10%, that couldn't have happened for a Chinese stock on a Chinese exchange. So star market is trying to make things a little more flexible because they understand that tech companies like to have kind of crazy tech stocks. It's kind of like I'm the cool mom situation. No price limit in the first five days. 20% price limit after that, which is double as much as other Chinese markets. And you don't have to be profitable.

This is like the XFL compared to the NFL of stock markets in China. But just a few rules. Well, there's still some rules. There's definitely still some restrictions. Since this is kind of a wild market, China wants to protect investing newbies. Right. So the only people investing right now in this market are quote unquote qualified. And that means a pretty arbitrary number, but you need to have 72, $72,000 worth of investable income. So Jack, what's the takeaway for our buddies on the star market? The whole point of this star market is to keep Chinese companies on Chinese stock markets. All right. So far, this year, 16 Chinese companies have IPOed on the New York Stock Exchange or NASDAQ in the U.S.

And the most successful, most high-profile Chinese tech companies, Alibaba, JD.com, Tencent, and Baidu, all IPOed in the United States. And China does not like to see that. They're a proud country and they want to keep their companies at home. So right now, 24 of the 25 companies that were on the star market. this week. They were like newly issuing shares going through an IP. And there's a hundred companies that are waiting to list on this star. So it's a really interesting inflection point because a couple really big companies are coming down the pipeline. One of the big fish is

TikTok, which is a super popular and viral social media app owned by ByteDance, which is the world's most valuable private company. And then you've got D-D, which is the Uber of China. Both are really big private companies and both may need a place to IPA. China hopes that the star market is good enough that they'll IPO at home. By the way, this is Nick and I own shares of Alibaba. Also, this is Jack, and we both own shares of Beyond Me. Jack, can you whip up the takeaways for us over there? Starbucks aims to start selling its mobile app through a tech company just invested.

If you're good at something, get paid for it. Hasbro is shifting toy sales from China to Vietnam, and it's excited about more and more Marvel characters. We kind of had a double takeaway here, the other one being Disney's really good at scaling creativity. Third and final story, China isn't thrilled that Alibaba and Tensen are listed on New York stock exchanges, so it set up a tech friend. friendly exchange at home. It's a mouthful, but this thing is a big differentiator. Jack, time for a

snack fact of the day. It's from a T-boy snacker named Alejandro Valas, who we met. We did. In person, LA last week. Great, great snack. Getting some falafels and we run into Alejandro. He pointed out to us that Silicon Beach is a new place you need to know about. It's nice. It's always good when you kind of do like alliteration kind of a thing based on the Silicon Valley stuff. It's not just Silicon Valley. Silicon Beach is where a whole bunch of tech companies are side hustling as video content producers. Basically, the streaming wars, those are happening on Silicon Beach. YouTube, HBO, who else we got? Apple, Amazon, all producing their streaming future on Silicon Beach. Even old school Sony is there. It's happening in L.A. Now, Snackers, on this pod, Nick and I oftentimes

mention that we own a stock or two. It's happened before. We own it through Robin Hood. We also love our Snackers, and we want to make their lives better, and so we want to give them a gift. Robin Hood is a beautiful trading app, so we're letting you know that Snacks podcast listeners can get a free stock if you set up a new account on Robin. So this is a free stock that's selected from like a whole pool of stocks. We're talking it could be Fitbit, Lift, Microsoft, or a bunch of others. Snackers, sign up at Snackspodcast.robinhood.com, and once your account is set up, you can claim a free stock.

Snackers, it's Snackspodcast. Robinhood.com to get your free stock. Now, we will be back with you tomorrow as always. 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, 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.

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