The Best One Yet - “Sweet battery, where’d ya get it?” — Tesla’s 2nd profit puppy. Aviation Gin’s $610M sale. Thursday’s Uber/Lyft-pocalypse.

Episode Date: August 18, 2020

Tesla shares jumped on word Elon may have discovered a second profit puppy: just the batteries. Earth’s biggest liquor company, Diageo, treated itself to Ryan Reynold’s Aviation Gin because premiumization needs celebrity. And Uber and Lyft are about to (maybe) shut down service in California this week, because, gig.$TSLA $DEO $UBER $LYFTWant a shoutout on the pod? We got the form for Snackers to fill out right here: https://forms.gle/KhUAo31xmkSdeynD9Learn 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, August 18. Nick, the S&P 500 ended up just shy of a record high. It's like that scene of Mission Impossible. You got Tom Cruise on the floor basically hovering chest hair touches. He's like, don't sweat. Don't sweat. No. This happens to be the best one we have ever put out for snacks daily. For our first story, Tesla stock keeps doing this magic trick. It goes up for no reason. It doesn't make any sense. But Elon may have discovered his second. profit puppy, just sell the battery. Sweet battery, man, where'd you get it? Second story, Jack, what do we got? Diageo is the world's largest liquor company and it's dropping half a billion dollars on Ryan Reynolds gin brick. Jack, a nogoroni recipe for you. One part Campari, one part vermouth, one part gin, one part total dependence on a direct consumer celebrity marketing scheme. For our third and final story, Uber and Lyft have faced regulatory speed bumps before, but on August 20th, they're getting the boot in California. You are wait time for the Black Honda Civic is estimated at three and a half months.

Computing. Computing. Computing. But before we get to all that, happy T-Boy Tuesday. On this wonderful T-Boy Tuesday, we're talking about the shocking winner of the coronavirus, part 28. Yep, it turns out it's Crocs. Crocs is the Tiva of second half of 2020. Snackers, we've said it before in media, content is king. Jack, what are we saying now about fashion? In fashion and apparel, comfort is king during the coronavirus. not seeing other humans, you put the function over the fashion. Now, Nick, it's funny, I consider Crocs the petroleum-based cousin to Birkenstocks because they're super comfortable, not plant-based. And some are repulsed by the aesthetics of them. I like where you're going with this. Well, this is why I have to

give a full disclosure. This is Jack, and I'm wearing Crocs right now, Nicholas. That means Jack's perfectly prepared in case there's a two inches of flooding that suddenly hits his apartment. Not just the perfect footwear for the coronavirus, the perfect stock apparently, because the stock of Crox has quadrupled since the coronavirus since the coronavirus'clock in March. Snackers, get this. Jack and I discover they have 10 straight quarters of over 7% sales growth in their stores.

Part of their spectacular success is the power of the collaboration. Didn't see this one coming. Seems like they kind of threw this up on a chalkboard last Tuesday. They launched a KFC version of Crocs, which actually smells like fried chicken. We did mean KFC is in Kentucky fried chicken.

It comes with a 3D replica of a drumstick over the non-execkel. Existent Laces. No laces. They launched it this month, and it has already sold out. Let's hit our three stories. You're tuned in to snacks daily. We spoke to the lawyers and we got to get some illegal out the way. It's 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. Nope. 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, Tesla stock jumped 11% yesterday on where it may have found its second profit puppy. The first profit puppy, of course, was electric cars. The second could be just the batteries for electric cars. Jack, can you please recite to me the mission that Tesla employees have to say probably every time they enter the factory? First, I'm going to stand up straight, and then I'm going to say, to accelerate the world's transition to sustainable energy. One way to hurt the environment less is with electric cars instead of cars like literally burning fuel.

That's what they're getting at here. Yeah, the internal combustion engine, emphasis on combustion, which means burning gasoline into the sky. So electric vehicles became Tesla's number one business line to fulfill that mission of sustainable energy. But you also got to make sure that those electric vehicles are getting charged with clean juice. Yeah, you don't want to be a vegan who is eating corn, but that corn is mowed by cows. Boom, that's why Tesla's entire business line number two, is solar panels. And it's why Tesla acquired Solar City. But part of Tesla's mission is also ensuring that anyone can harness clean electricity. Not just John, the software engineer, working at some tech company in Menlo Park. No, he's got a lot of stack options that, John. Now, voila, enter Just the Batteries. This is the potential third business line, the third profit puppy for Tesla. Now, just the batteries is already a business line. They've been selling a product called PowerPack for a few years now. You throw it in your garage. Yeah, we should point out that Jack and I made up the turn. term just the batteries, but we think Elon could run with this kind of thing. Now, this brings us to

yesterday's news. A analyst at WebBush Securities named Dan Ive just predicted that in 12 months, Tesla stock would rise to $1,900 per share. That would be 15% higher than it wildly is right now, and the reason for the upgrade is a single day coming on September 22nd. It's called Battery Day. Battery Day. It feels like a science fair mixed with like Circta Soleil. Now, the game-changing technology that we expect to learn about on battery day. Battery day. Could focus on improving batteries for Tesla's cars, like make them drive one hour longer on one single charge.

Or crazy idea here, sell the batteries to other car companies. Now, this brings us to an important concept for Tesla. Their battery game is arguably better than their car game. Snackers, Tesla's got a bunch of gigafactories that specialize in electric car batteries, also great wedding venues. They've also got dozens of Stanford grads, with batteries who have a 10-year head start versus all the other companies. I love telling you that they went to Stanford. But once dirty car companies finally get serious about electric vehicles, Tesla could start

providing them with the core need a battery. It sounds kind of alarming, help one of their car competitors, but they could make profits by helping their car competitors. And they grow the entire electric vehicle pie. So Jack, what's the takeaway for our buddies over Tesla? Tesla stock is emotional. So these latest jumps could be completely unjustified. Honestly, Snackers, Jack and I were on vacation, our phones get blown up because Tesla didn't take a vacation. I spat out my fish food ice cream, made Godfather part two on a notification on my phone

that, like, made no sense. Jack sent me a picture. He almost choked on a little pretzel. Tesla announced last week a stock split. They're cutting every Tesla share into five equally sized smaller Tesla shares. But here's the thing. That stock split has no material impact whatsoever on Tesla.

Tesla's value as a company, and yet the stock jumped 15% after the announcement. Now, Nick and I think that's because Tesla shareholders, many of them are zealous fanboys and fan girls of Elon Musk. And many of them are snackers, which is great, but they're driven by excitement for potential, not necessarily the earnings per share fundamentals of Tesla. Now, this second profit puppy we're talking about, making a whole line that just sells car batteries to other car companies, that's exciting too. But the stock for Tesla is already insanely highly priced and could still fall.

For our second story, Diageo, the world's largest liquor company just made its biggest acquisition in years. It's buying Ryan Reynolds' chin brand, excuse me, gin brand for $610 million. I love what you did there. By the way, we had to rehearse Ryan Reynolds, Ryan Reynolds 12 different times to say that. Unique New York. Now, Diageo, you may not be as familiar with. It sounds like a European DJ. It's actually a publicly traded liquor company that basically sponsors the duty-free section at every international airport. You walk in, they got the 40-gallon tank of like Johnny Walker. Now, duty, by the way, we've never knowingly actually paid, but we love avoiding it at airports. It is charming.

Yes, we do. Now, aviation gin is the company of focus here. It acts like a simple small town beverage company. Yeah, they say they're made in Portland's craft distilleries, which sounds duplicative because that's all that Portland does craft. It's actually the second largest premium gin brand today, though, behind Gordon's, which I thought was one of those like plastic bottle discount gin. companies actually. It does come in that version, but also owned by Diageo, turns out aviation gin sales doubled to $40 million in the last year. And that growth is thanks to Ryan Reynolds, the A-list celebrity actor from Deadpool. Also known for his Pikachu voice, his chiseled features,

and for being apparently vaguely Canadian. Ryan Reynolds, definitely a snacker and definitely plays hockey up in Canada. The context here, though, snackers, is that Diageo's profits we just found out fell by half last quarter because all the bars were closed. You're not getting that Gordon's. Drinking is still happening during the coronavirus, but it's happening at home where nobody is impressed. You drop $17 on like a thimble of booze. So to replace bar sales that aren't happening with liquor store sales for at-home drinking, premium liquor companies can't just rely on their expensiveness. So Diageo has created its own shelf of liquor within the entire fragmented liquor industry. We're calling Diageo's type of liquor, celebrity infuse.

used premium booze. This is top shelf liquor, but it's to the right of the shelf behind a velvet rope, and you have to know someone to order it. Exactly. This started back in 2007 when Diageo bought Sirac, the vodka company headed by Sean P. Diddy Combs. A decade later, they kicked things up a notch. They splurged nearly a billion dollars for Cosamigos Tequila, brought to you by George Clooney. Another A-list actor with a fantastic gin. Which brings us to 2020 when Diageo just dropped $610 million for aviation gin by Ryan Reynolds. The theme here is Chin's. So, Jack, what's the takeaway for our buddies over at Diageo?

Celebrities now come with built-in brand equity thanks to Instagram. Snackers, part of this is like your classic trust and recognition that we've all gotten to know from like celebrity endorsements. We've all been at a liquor store with one mission to buy a bottle of gin, but there's like a hundred different bottles that you're staring up at Clueless. You got juniper, you want light juniper, do you want heavy juniper? What is juniper? They're asking you these questions. They're all 50 bucks. You don't know which ones are worth it, which one is a rip-off, but you do trust Ryan Reynolds's

perfect chin. You always trust that chin. But what Diageo is doing here is more than just a celebrity endorsement. Ryan brings Diageo a built-in marketing strategy built on influencer trust. 36 million followers. Check out Ryan every day on Instagram, and they trust him. And Jack and I have seen this play out elsewhere when it comes to the booze industry. The Fat Jew, the famous Instagram celebrity, recently sold his white girl rosé brand to Budweiser.

And we've seen this play out in the cosmetics industry. Kylie and Kim Kardashian both got sweet billion-dollar deals with Cody to sell their cosmetic brands. And we're pretty sure Turtles' whole plot line in Entourage Season 3 was exactly what Ryan Reynolds just did. Vinnie! He's doing the movie! For our third and final story, Uber and Lyft are planning to shut down in California. on Thursday. It's true. But Uber is betting that drivers and riders would rather have mean Uber instead of no Uber at all. That's like a Muppet show kind of thing. Now, this brings us to a core set of letters and numbers

known as AB-5, AB-5. This is the law passed in California that targets Uber and Lyft, but it also applies to any company using gig or freelance workers. Basically, this law comes down to like a two-question questionnaire. Do you perform the core function of a company, Jack? If so, congratulations, Congratulations, you must be treated like a full-time employee. So Uber and Lyft drivers drive the cars, which is clearly the core function of a car driving business. However, they are not being treated like full-time employees. No. So they are not in compliance with AB5 right now.

Drivers get paid based on the number of rides they do and that's it. Right. The hours that you work as an Uber driver, that guarantees nothing. So you only pop in your Prius to do some rides if demand for rides is high. Uber is just playing the matchmaker here. they fix up the driver's supply with the right of demand, and that's it. They get out of the way. So the driver to Uber relationship currently is totally different than your buddy who actually landed a real job at Uber HQ and is working in San Francisco with all the perks.

MBA Amanda's walking into work at Uber, getting the spa water, works in corporate dev, has the salary, the health insurance, and unemployment if she's laid off. So now it has been one year since Governor Newsom signed AB5 into law, and Uber has exhausted all of its legal tactics, and it finally has to comply. Jack, apparently there is a finite amount of lawyers you can throw at a problem despite having limitless money. Snackers, we're not kidding here. Lyft emailed me, and it said, thanks to AB5 and politicians in California, we are stopping lift operations in California starting Thursday. Please vote for Prop 22 so that you can get your lift back. Jack got very excited. At first, he was like, it's kind of felt like you thought you were the only one

getting emailed over here. Now, the one catch. here is a potential solution called Proposition 22, or is Jack, and I like to call it the Goldilocks option. Not too employee-ish, not too gig-ish, just right there in the middle. Lift and Uber are urging California users to vote on yes on Proposition 22, because this is like a middle-of-the-road kind of situation. Right. In November, on the ballot, in California, you'll get like Trump versus Biden, but you'll also get yes versus no when it comes to Prop 22, which would guarantee some pay, some health care, but it'll be less, costly and less disruptive as AB5. So Jack, what's the takeaway for our buddies over at Uber and Lyft?

This was the evil genius of Uber founder, Travis Kalanick. Snackers, Uber's founder believed you would end up loving Uber so much that regulators would have to let it operate. We've seen this playbook before from Uber, but not at the scale of the state of California. No, here's what we're seeing. You know, the Uber ignores local laws, launches anyway, people love Uber, Uber gets banned by mayor. And then the mayor caves. Yep, because the public. is very upset that they lost Uber and the mayor wants to stay the mayor. People want Uber, mayor wants mayor. Now, the incredible convenience that Uber and Lyft offers to lifestyles of riders and drivers gives Uber awesome advantage. Let this sink in. Uber is not going to be available on Thursday

in its hometown state of California. They are shutting down until they manage to change the rules to a way that they like them with the November balance. Jack, can you and your chin whip up the takeaways for all this please? flattered, Tesla's stock jumped on dreams that the next profit puppy could be just the batteries. Tesla's battery game is arguably better than its car game. Our second story, Diageo sells celebrity-infused premium liquors. And thanks to Instagram, A-Liscelebs bring free direct-consumer marketing a new thing. Third and final story, Uber and Lyft are shutting down for the 50-something million Californians starting on Thursday. It's round in any direction. Remember Travis's evil genius plan,

Jack, the honors. Uber doesn't comply with laws. Laws comply with Uber. Recite it every all hands. Now, time for our snack fact of the day. This one sent in by Clint in lovely Lancaster, Pennsylvania, because Clint loves lovely Lancaster, Pennsylvania. Lancaster, Pennsylvania should put this right at the top of its resume. For one day, Lancaster, PA was the capital of the United States of America. Can't say that, Pittsburgh. On September 27th, 1777, the British had captured Philadelphia during the Revolutionary War, and then Jack. So the Constitutional Congress fled the city of Brotherly Love and went to Lancaster for one day and stuck a flag in the ground.

Yep. Before we head out, happy birthday to Snacker Zach Coburn in Troy Alabama. And to Megan Tankersley in San Diego, California. And Tiffany Zhang also in San Diego, California. And Nathan Akakin, a little north in Los Angeles, California. And to Sandy in Santa Rosa Beach, Florida. And then Eli Salavi in Miami Beach, Florida. And happy engagement to have.

Hannah and Troy up in Boca Raton. Oh, and by the way, Elizabeth Delfts in Portland, Oregon survived COVID-19. She was suffering through it. Congrats. Not too shabby. Snackers. For a shout-outs on the pod, check out the form in the description of this year podcast. You all looked and sounded gorgeous today.

Thank you for snack, and we'll be back tomorrow. But ask your buddies, H-Y-H-Y-S-D. Have you had your snacks daily? I'll see you that. Can't wait. If you know, you know. 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.