The Best One Yet - Stubhub’s VIP everything for concert tickets, Nike’s women’s sports binge, and Deutsche Bank’s downward spiral

Episode Date: July 2, 2019

Stubhub is treating customers who spend $10k to VIP tailgates, VIP perks, and VIP customer service. The women’s national team soccer jersey is Nike’s top-selling soccer jersey ever, showing the potential to boost womens’ sales. And Deutsche Bank’s reportedly mulling laying off 20k workers as it still hasn’t recovered from the financial crisis. 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. It is Tuesday, July 2nd. This is the best one. This is the best one we ever put together. It's a holiday short and week. Yesterday was okay.

I'm pretty pumped about it. We like this one a lot more. Okay, Markets rose to a fresh record high thanks to the trade truce. Actually, literally the best one yet. Now, three wonderful stories. I love this mix we got. Well, Nike has made it official. 2019 is the year of women's sports.

And the Women's World Cup team is literally powering its sales in a very interesting way. USA versus England today in the semifinals. No, Pacific, Revolutionary War rematch. 3 p.m. Eastern. What else we got? Number two. Stubhub, just launched a new loyalty program targeting anyone who's spending $10,000 a year on Stubbub. Because we all had that friend, Timmy. So he's doing that. Now, perfect example here of customer segmentation. We're going to jump into that. Third and final story, Deutsche Bank employees are leaving work in New York at 1 o'clock to grab some beers. Easter standard. Not for good reasons. Not exactly. And we're looking at why the bank is

about to cut 20,000 workers. Plus, we've got a piece of financial jargon here. We're going to break down, to cut up and serve up to everyone. But before we jump into that, can you hear it? Can you hear that? Can't hear anything because electric cars don't make any noise. That's the thing about electric cars. They're really quiet. Anyone who's played golf in a gas powered golf car versus an electric one knows what I'm talking about. Anyone been hit by electric car and knows what we're talking about. So starting yesterday, the continent of Europe is enforcing a new law that electric cars must have some sound emitting technology built in. Because no joke, you can't hear these things coming. This is to protect pedestrians so they don't get hit by cars.

Now, BMW got a little creative here and said, all right, we got to have some noises. We're going to go all in on this. BMW went A list and they hired Hans Zimmer. Ever heard of them? If you're a Dark Night Rises fan, you know who we're talking about. If you're an Inception fan, you know who we're talking about. Gladiator, Lion King. Basically, any movie soundtrack with like a, bum, bump, bump, bump, bump, bump, bum.

If you got stressed out in one of the scenes, Hans Zimmer is the composer who came up with that theme song. Turns out Hans, who himself is German, is a big BMW fan, so he's thrilled at this opportunity. And he says that accelerating the gas pedal, it should be like a crescendo with a climax. I don't care if it's electric or gas power. We were thrilled. We thought that was fascinating. A little more disappointed by our buddies over at Mercedes. Wow. Mercedes had to follow up on this Hans Zimmer announcement. Couldn't get Hans Zimmer. What did they go with? They went with Lincoln Park. We're not even going to say anything else. We washed up 2000s.

We don't have to get personal, Jack. Listen to these key words. And then we'll hit our three stories. For 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, 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. Snacks is digestible.

Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Jack, stretch out your hammies. Nike's earnings report just showed 2019 is the year of, women's sports. Seriously don't earn yourself. And this is paying off big for Nike. Now, for the first time in seven years, Nike actually missed earnings expectations that analysts had. Which it announced on Thursday. Exactly. They also announced that only 26% of Nike products are made in China. Now, we were very curious about this because... That sounds scary. Exactly. When you think of...

26% sounds like a lot. It's a big number. Nike making things in China, then coming back to the U.S., you're thinking tariffs trade war. But then we learned a clarification. Only 10% of the stuff that's made in China for Nike is shipped back to the U.S. So even though you think Nike was totally affected by the trade war, apparently it's been sitting on the sidelines unaffected. Well, my third grade math tells me that 26% times 10% is 2.6%. So only a tiny little fraction is affected by U.S. tariffs on Chinese goods. So that was the earnings report and that's what was released. But then on the earnings call, CEO Mark Parker jumps in and drops some serious new storylines on us. Well, he said that 2019 is a true tipping point for women in sports. Quote unquote, and to back that up,

up 14 of the 24 women's World Cup teams right now are walking onto the field deck out in Nike jersey. Yeah, so Nike is taking advantage of this tipping point in women's spots. Can we talk about the United States women's World Cup jersey? Oh, it's beautiful. This thing is insane. They come in white or red. Both of them look like Captain America uniforms. You wear this, you dress down, you can wear it formal affair, go out to dinner and this thing, show up to a board meeting. It's also about the details. It's got three stars on the left breast. Classy moves. That's because we won the World Cup three times. Soutle, no big deal. It's also the number one selling soccer jersey on Nike.com ever. Men's, women's, whatever.

We just found this out this week, the top-selling jersey ever. But let's talk about other Nike records here. Right, because the CEO Mark Parker pointed out, this is extending into other categories. Well, it's the number one seller of bras, period, in North America. We're talking Nike. Nike. Is the number one seller bras, just any bras? We're talking Nike is the number one seller bras in North America right now.

Finally, Mark says that women are embracing sneaker culture. Right, you've got guys who typically grow up wearing sneakers. It's kind of part of the thing. And he said that women are. are wearing sneakers too. Thanks to the appraiser trend. Exactly. So, Jack, what's the takeaway for our buddies over at Nike?

The most exciting matchup in sports right now is Nike versus Lulu Leu Lemon. Lulu Lemon's five-year plan, we just told you the other week about it, double its men's sales and quadruple its international sales. Especially in China for Lulu. Exactly. And what's Nike doing? Well, it's producing a lot in China we just talked about. And it's actually trying to sell a lot more in China as well. 75% of the goods Nike selling are men's goods.

And on the Lulu side, we don't know, they don't break it out by gender, but we think about 75% is probably women. So they're kind of opposite there, but competing in the same space now. This is the new magic versus Larry. The new Venus versus Serena. It's Nike versus Lulu. For our second story, Deutsche Bank plans to cut 20% of its workforce and go through like a total makeover for the German bank. Slow week for markets in the U.S., not a slow week for layoffs in Germany. Not at all. The announcement specifically from Deutsche Bank's expected maybe as early as this week. Yeah, it hasn't been officially announced yet. It just reported so far. But Deutsche Bank has 92,000 workers in the world.

It's significant. 20,000 of them might get laid off as a result of this. There are even rumors that they're just going to sell off their whole U.S. division. And that's also led to some interesting reporting about what's going on at their U.S. offices. Bloomberg has done some reporting, and they've looking at Deutsche Bank's U.S. headquarters on 60 Wall Street in the financial district. Turns out some of the junior traders are just checking out worried that they may be getting let go later this week. Morale is very low and workers are just like blatantly working on their resume, like trying to get other jobs. You've got people jumping out to get drinks at 1 p.m. at Chippriani is just because why not? Who cares?

Now, the plan A for Deutsche Bank over the past year was to merge with also struggling German bank, Comaerts Bank. You want to share a critical disclosure? Yeah, I used to work there and I used to be the head of the corporate softball team. It's all about the resume points. That merger, though, hasn't worked out. It's off the table. So this is plan B. It involves layoffs. Now, in case you're wondering how bad things are gotten, there's a really specific interesting number you can look at here. It's called the price to book ratio. Now, if you're Deutsche Bank, you've got a balance sheet, and that balance sheet's showing your value on the book as worth 63 billion euros. Yeah, that's how much the company is like officially worth, according to Wall Street.

It's about $71 billion. But investors who, you know, pay for a stock and decide how much it's worth based on the stock price. And that stock is trading fluidly in the market. They say it's only worth $14 billion based on today's stock price. So you've got a little comparison there. You can compare the price value to the book value. Yeah.

that ratio is 22%. So long story short, Wall Street is like, that's Deutsche Bank. They claim they got $100 inside. I'm not buying it. I think it's worth $22. Now, the sign here is that there's a lack of faith in kind of management because there's such a discrepancy between the price of the stock and the value of the company. Wall Street has no faith in its ability to make future profits, and that's reflected also in the stock price, which is down 80% in the last four years. It is at an all-time low. So, Jack, what's the takeaway for our buddies over at Deutsche Bank? Bank is in the middle of an economic and banking death spiral. Now, this all began a decade ago with the financial crisis. And interestingly, it's only gotten worse for Deutsche Bank without a

recovery since. The death spiral started with that post-financial crisis. Deutsche Bank started getting regulated more heavily. And more regulation led to fewer loans that they could make. Fewer loans led to a slower economy in Germany. Now, a slower economy led to less profits for Deutsche Bank. It keeps going round and round. Less profits leads to layoffs. Led to more layoffs. The thing is, economies need banks and banks need economies. And the next spot in Deutsche Bank's death spiral could be 20,000 employees losing their jobs. For our third and final story, StubHub just launched a loyalty program for your friends who, you know, spend at least $10,000 a year on tax. Yeah, it's for your friends who could either buy a car or go to a whole bunch of concerts.

Responsible life choice or something to do on Wednesdays. Really, really wealthy and a huge Adel fan. Not going to name any names here, but you know who you're talking to. Stubbub is the world's largest ticket marketplace. It's actually owned by eBay. So you're never going to find a StubHub ticker, at least not right now. eBay, by the way, used to own PayPal. They know on StubHub.

They've spun off some pretty creative things. Yeah, and Stubhub is launching Stubhub Beyond. So if you spend $10,000 a year annually on tickets, you gain access to like VIP everything. Now, they're starting fast. They're out of the gate with this thing. It actually begins on Thursday on the 4th of July. Yeah, the first special perk for members of Beyond. They get a private tour and batting cage experience at Yankee Stadium in the Bronx.

Not too bad. Now, you're also going to access to, you know, Stubhubhabilates, which are an actual branded thing. Yeah. Imagine being at the Super Bowl and getting access to, like, unlimited Budla, unlimited pulled pork sandwiches. You know the routine. Yeah, it's going to be a bunch of people who are complaining that everyone else in their fantasy

league isn't taking the fantasy league serious enough. And then at the next T. Swift concert that has Stubhub's ticket sales. Finally. VIPs, lots of cocktails. Boom, you know where we're going. Meet and greet with the talent. Not too shabby. You're going to be on stage.

Another perk you're going to get a special refund treatment. Taylor swings to you. One time a year. you show up late to the concert or like your flight gets canceled, you will get a no questions asked refund whatever ticket you bought. Total dog ate my homework. We've all been there situation. No one cares. You don't have to pay. And then finally, because we all hate waiting on customer service. You get a dedicated StubHub support team. Seat 14B. The barcode isn't working. I'm trying everything. It's not scanning. Special phone number. They're perfect for that kind of thing. Now,

this compares very interestingly to the service that they basically had at Stubbub before they introduced This. From 2011 to 2016, they had a very straightforward point-based fan rewards program. This was a loyalty program that, you know, just like your sky miles on your Delta, the more you're spending, the more miles you're getting. And the more miles you can convert into like free stuff. So they're converting from the past, which was points that you could generate and redeem to the future, which is special status. We were very interested in this distinction in this transition. So Jack, what's the takeaway for our buddies over at StubHub? It's important to identify and reward your most valuable customers. Now, they're going to put on a huge show for a tiny fraction of their

customer base. Right. And you might wonder why is because it's worth it. The highest spenders have an outside proportion of the profits generated. Again, this is just like the airlines because it's the same reason why Delta is paying so much attention to its first business class travelers with really nice seats. Walk into any business school and you're going to hear them talking about the 80-20 rule. It's not uncommon that 80% of profits come from just 20% of the customers. Now, we're not endorsing exclusivity here, but it's interesting to identify when companies jump onto the exclusivity bandwagon. Speaking of exclusivity, if you are ever outside of a stub hub tailgate, we highly encourage you to try to get in there. Act like you've been

there before. And tell us about the pulled pork sandwiches. Just mention, hey, I can't believe we all spent 10,000 bucks this year. Jack, can you whip up the takeaways for us over there? Nike's embrace of women's sports is a big and successful business opportunity. We can't emphasize this enough. This is the number one bra seller in the North America. Second story, Deutsche Bank's downward spiral is continuing, and the next turn looks like 20,000. You know. Never want to be in a plan B situation. They're in a plan B situation. Third and final story, Stubhubh is creating the business class equivalent of sporting and concert tickets. Remember, you're going to seed the Stubhubbub tailgate, you're going to walk up and you just act like you've been there before.

And walk right in. And you say, we all spent $10,000 on tickets, didn't we? Now, time for our snack fact of the day. This one's sent in by William Layden because it's a key milestone. Do we know where Williams from? We don't exactly. Can we call him Billy? Let's call him Bill. Bill Layton.

So according to the U.S. EIA. Energy Information Administration, April of 2019, was the first month in American history that there was more electricity generated from renewables than from coal. First time, we're talking solar, hydro, wind. It's a whole Captain Planet situation over there. That is a great milestone for America and for planet Earth. The key, thanks for sending that one, William or Billy, but we're going to go with William. Another story we're going to cover it in the Snacks newsletter. Pepsi is ending plastic bottles for

Aquafina, its water company, switch into aluminum cans. I like the theme we went with it. I like that thing. Now, Snackers, we'll be with you tomorrow. It's our last one of the week. But in the meantime, if you haven't yet, drop us a five-star rating if you're enjoying your snacks. Great call, Nick, and Snackers. I'll talk to you tomorrow. I like what you're wearing today.

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. Robin Hood Financial LLC, member FINRA SIPC.