The Best One Yet - Tesla’s “Robotaxi 2020” plan, Zillow falls 4% on home flipping, and Luckin, the “Starbucks of China,” is IPO’ing in US

Episode Date: April 23, 2019

Tesla’s “Autonomy Investor Day” featured Elon saying he’s “very confident” it’ll have 1 million robo-taxi Teslas by 2020. Online real estate platform Zillow fell 4% on word its “iBuying” feature may not be working as planned. And Luckin’s the freakishly fast-growing tech-focused coffee chain in China now filing for an IPO.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, April 23rd. April 23rd. And this is the best snacks daily we've ever like put the time into it. This is a T-boy. Markets rose yesterday, thanks to oil hitting a six-month high in price. Not good karma on Earth Day, but good point. You know who doesn't care about oil? Tesla. Good call. That's our first story for the day. They just announced on Autonomy Investor Day that Robotaxy Teslas are coming by next year. Jack and I checked our oil. old calendars, by the way, and we noticed that when it comes to autonomous driving, there's some mistaken dates. You might want to show up late because they're going to show up late. Second story is Zillow. The fancy online real estate company announced a new virtual reality walk-through thing. But we want to focus on another issue, which was I buying, lower case I, big case B. Cheap attempt to look techie. Third and final story? Luckin coffee. This is wild. This is a Chinese company. It's IPOing in the United States. It's a huge deal. It is It's basically like Starbucks's cooler, younger, Gen Z cousin who only uses a phone.

As a millennial, I'm intimidated by this company. I am highly scared about this. Speaking of millennial love, we have to talk about a story by the Wall Street Journal, which doesn't really rely on data here. No, not at all. But it's theorizing that Netflix has slowed America's birth rate. We're talking like the literal Netflix and chill. Like Netflix is on and then you don't do anything.

Here's the issue. Like one episode rolls right into the other. That is the key factor. There's no time for the magic to happen in between episodes. You're like, I don't know, talking, next thing you know, you're three episodes deep into the crown. You think you're going to Netflix and chill, but really you're binging and it just never stops. It's killing romance.

No, I'm like into the fourth season of Marvelous Mrs. Maisel, and it hasn't even been filmed yet. I think we need to stop before this episode takes a turn for the worst. Why don't you guys listen to these key words before I hit our first stories? The snacks about to hear 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. Robohood Financial, LLC, member FINRA slash SIPC. For our first story, Tesla just held its first ever annual, I guess is it yet. It's called an autonomy investor day. It sounds great, but they good gear at that thing. Tesla fanboys were stoned. Now, they held it yesterday in Palo Alto, and basically here is the key surprise. Expect Robotaxies next year. Yes, asterisk. Musk is very confident, quote, unquote, that robotaxies will be there by next year. Get this. The number is huge. He's saying they're going to be like, well, not just one,

not just two freaky cars rolling around. You're going to have a million robotaxis. That is an insane number. I'm pretty sure Tesla hasn't made a million cars to date, but it'll have robocars. A million of them by next year. Now, there are two fascinating elements of this. One is, if you're an owner of one of these Tesla robocars, this is going to be a big deal. Oh, you turn this thing into a ride share. Let me tell you about how your Tesla is going to be an Airbnb, Uber, and Tesla all wrapped in one. Walk me down the drive way. If you turn yourself driving Tesla into share mode, which you can do on this new app that it unveiled yesterday, it will be able to go pick up your buddy. If you're going to go pick up your buddy, your buddy like hails or summons the Tesla to come pick her. So essentially it becomes an Airbnb for

cars. Yeah, it's pretty amazing. It's going to really like add some extra income for you. Now, if you're wondering this is going to change the car, yes, it is. Musk also said that in two years, he doesn't think Tesla's will, I don't know, have steering wheels. It's a bold prediction. He thinks in two years, no steering wheel, no gas pedal Tesla's will be on the road. This sounds like an incredibly wonderful fantasy that we would all like to be a part of. And that's exactly what it is. So I think the whole strategy here. Investors are nervous right now because Tesla's quarter, his first quarter, was rough. Sales were slowing. Sales slowed down. Of Tesla's that don't drive the south. So Elon is dangling this pretty shiny future thing in front of investors' faces. And it's pretty cool to keep them confident.

Now, when it comes to autonomous vehicles, Jack and I decided to jump in, look at this and we said, you know what, when it comes to timelines, we're noticing a little consistent pattern here. My German ancestors very much disapprove of the chronic lateness of autonomous vehicles. Jack shows up five minutes early to things that he shows up five minutes early to. So he's like 10 minutes early usually. So let's run down the usual suspects of self-driving car companies. Can we please? We'll hold them accountable.

Waymo is number one. They are owned by Alphabet, which is also Google. They have robotaxies operating right now, but only in a small part of Phoenix, Arizona, to select users. Then you got Uber, which was going hardcore into robo taxis until it had a couple accidents, and it decided to scale down its operations there. Yeah, one person died. Also, Volvo has self-driving car plans. They had to push their date back from 2017 to 2021.

And then General Motors, they said they were going to have robo taxis floating around in Manhattan. This year. I didn't see them. It could still happen. Are they there? They got a deadline by New Year's Eve. I'm out in the street. I'm hailing these things.

I don't see them. Now, the most honest one here is Midwestern classic Ford Motor Company. This is straight out of Michigan, just kind souls. They're telling it like it is. Ford CEO admitted this past month. that they overestimated their ability to get Ford self-driving cars on the road. It was basically an apology. It was kind of nice.

And in case you were wondering what Tesla is going to be on schedule, the actual event they hosted yesterday started a half an hour late. You can't make this up. No, you can't. So the takeaway, Jack, what is it for our buddies over at Tesla self-driving all around? Tesla has a top secret weapon. It is called Shadow Mode. This is actually, like, pretty cool. Can we do something with the voices again?

So, yeah, Shadow Mode. It's like a Batman. So every Tesla today has radar built in Nick, and some of them can have certain self-driving features. But even if your self-driving Tesla is in like regular driving mode, it is recording everything that's going on around you. It's freakishly focused. It's collecting data.

It's mapping roads and it's learning. It is learning. And Tesla has this data on the miles driven and it can compare it to a lot of things. And that's a major advantage. All of these shadow mode driving hours that Tesla has already. Now, Musk thinks this is happening in 2020 for the Robotaxies, but remember to whip out your Muskometer whenever you're hearing Elon talk about timing. Whatever he says, probably add.

Exactly. And that's more realistic. And Snackers, you know the rules. When we own stocks of companies we talk about, we tell you. And I own Tesla shares. Or our second story, Zillow stock just fell 4% because it's eye-buying, home-buying feature. Have like a little bit of a weird day. Yeah, let's talk about Zillow, though.

Can we please? The OG online real estate platform. This is like one of the first cool tech companies. I've spent countless hours fantasizing about my Vermont-style country house. That you want to buy that's in 20 years. Lumber-based, tree-focused. Maple tree. Maple tree.

You actually get the sap from the house. It's incredible. Now, the company announced yesterday a charming new virtual reality feature. Adorable one-bedroom, stylish. It lets you pretend that you're walking through the house, even though you're just looking online. It's basically like if you saw one of those Google Maps street few, cars and invited them into your home. It's a more invasive version of Google Street Map. It's pretty crazy. Now, they wanted to focus on that because that was the new feature. But that's not when

investors are focused. No, they focused instead on a really interesting Wall Street Journal report. Right, which is about I buying. Lowercase I, big case B, kind of like an iPhone. Like an iPhone. This is Zillow's new passion, and there's evidence to suggest it's not working. So I buying. Basically, eye buying is when Zillow buys and sells your home for you. Yeah, it's not... Literally it buys the home. It's not just a middleman that takes a cut. It buys your home. It owns it. So the benefit to a home seller is speed, convenience.

You don't need to stage your house. You don't need to clean it up. You don't need to fix things. You don't need strangers in the house. Sounds too good to be true. You sell it right away. There is a slight cost. It's that you, instead of paying the same fee, you would pay a real estate agent, you pay Zillow a higher fee.

Right. So you could sell your house in six months for $500,000, but it's going to take six months. Or, you could sell your house. your house right now. Pays Zillow big cut and walk away with like $450,000. Now Zillow hates calling this flipping. It says it's not flipping your house. It's flipping house. It's flipping your house. Zillow is in the house flipping business. It's just doing it. So the stock fell 4% as we learned a lot more about these eye buying issues. Now in February, Zillow stock actually jumped 25% when the company announced it was doubling down on eye buying. Like they were getting really deep into I buy. The new CEO said

this can bring in $20 billion of annual revenue within three to five years. Now, the stock's fallen back down to where it was before February because the evidence shows they're not making that much money off of each of these transactions. Right. Buyers don't necessarily want to just quickly sell to Zillow. Now, the reason to invest in Zillow is to make a big bet on the housing market. But the risk in investing in Zillow is that they own all the houses that they're eye-buying. They're buying lots and lots of houses before they flip them.

the market turns down, Zillow's in trouble. Because it owns them. If the market goes up, Zillow will be okay. So, Jack, what's the takeaway for our buddies over in the Tudor three-bedroom, charming one off to Wall Street? You can't always cut out the middleman. It's so true. He or she, the middleman or middle-women, they are sometimes really critical. Yeah, and they're really critical in real estate because selling a house is a big deal. As a millennial, I have no idea what you're talking about. I've never sold anything, but it sounds like a really big deal. I'm a millennial too. I know that only 5% of homeowners in any given year actually sell their house. That means it happens once every 20 years.

You want to do it. Right. It's such an expensive thing and it's such a rare transaction. You want to be handheld along the way. You're willing to pay a little bit more to make sure you're doing it right. Speed is the priority when I want my burrito delivered at 7.30 p.m. It's not the priority if when one day maybe I sell a house. For our third and final story, Jack, oat or almond?

Half and half. I'm going full dairy on this one. it. No soy. We're talking about Luckin, which is the Starbucks of China, and it just announced it's going public in the U.S. This company needs to take it easy. It needs to relax. It is 18 months old. It is on a caffeine freakout overload. And now it's getting ready to go public on U.S. Stock exchanges. Oh, and you're probably wondering, oh, not a big deal. Maybe they were waiting a while. Nope. They raised $150 million from venture capitalists a week ago. This company is Blitzscaling, and it's high on caffeine. They are hyper.

But let's give you some perspective by first talking about Starbucks. Right. Starbucks, their second biggest market is China. How many stores do they have there? Starbucks has 3,600 stores in China. Nice, nice number. Now, Luckin is moving so ridiculously fast that when Jack and I looked at it last summer, when it was only a few months old, had 500 stores and we were pretty blown away.

Yeah, this is like 10 months later, it has 2,370 stores. It has like quintupled. Is that the word? That's, no, that's not the word. It's more than that. It's six tupled? Six top old. There's six times as many. It is insane. And it's got, oh my God. We're not in China, so we can't experience this firsthand. But we did check out the website, which has an adorable crazy video.

Oh my God. We downloaded the app. You've got to go to the homepage of this video. It's got a flying woman, a man who's like sexually sniffing the oats. At some point, she kisses a shark that just floats into the screen. And it's all because luck and coffee just gives you those good vibes. Yeah, the guy in the video is really obsessed with these beans. He's really into those. Also, the logo looks like Harry Potter's Patronus. It's fantastic. It's a stag. When you jump into the app itself, you see a lot of that stag loto. So this is not a coffee company that also does tech.

No, this is a tech company that, I don't know, on the side happens to be selling coffee at a ridiculous pace. Now, we jumped into this one snack style and we figured out what the experience was. Because once again, we're not in China. We couldn't go there. No, but if you were in China and you were to go to a luck in store, you would first have to download the app. The moment you walk in. Key. You can't do anything without downloading the app.

So once you get in there, you've ordered your coffee ahead of time via the Luckin' app with the cool stag. And you're either going to pay with WeChat, which is the Chinese messaging app, or you're going to pay with the luckin app. Right. And in America, like, this would not fly. No. People just aren't comfortable paying with mobile phones, but in China, it's like much more

standard. And just to entice you a little bit more, pricing-wise, we're talking about coffee that's about a third cheaper than your Starbucks in China. Now, the tech doesn't stop that. All of this, like, mobile phone usage, that means that Luckin has all the information about your drinking and caffeine habits. Way more than just, you know, you having walked in and ordered something. And that's useful. That's key.

And the other big, unique element here is that ordering ahead is driving their growth. Yeah. You order on your app, like, while you're sitting in the office, then you go down to your store and you pick up your coffee and you're gone. Now, that kind of efficiency makes profits. It may not seem super exciting to you at first, except when you hear that not. 90% of the orders are placed ahead of time for pickup with Luckin. So only 10% are people like walking in, standing in line, looking at the barista, telling the barista their name.

But I'd be like, what are you doing here? We don't expect to see people. So Jack, what's the takeaway for our buddies over at Luckin? Mobile is greater than real estate. Especially in China. Oh my God. So if you're Starbucks in China, you're in high traffic, expensive, tourist fancy locations. Right.

You're appealing to the Western tourists who happen to be there. It's like the time squares of China. That's where you're at if you're Starbucks. But if you're Luckin, you're focused more in the cheaper areas where you can deliver from anywhere. Have teeny teeny locations because you're just doing pickup. Luckin is in those little dingy like armpits of the subway station. They're kind of niches.

Super convenient for travelers like on their way to work, but kind of like gross and not glamorous. But now that they're growing so fast, they can open up in those more touristy areas and they only need a fraction of the real estate. That mobile phone focus. These guys have tech addiction. Now, the only thing we haven't talked about here, the flavor of the coffee. Because it turns out,

we couldn't find anything about whether the coffee's actually good. Does it really even matter? Doesn't matter. All you have to do is order ahead. Jack, can you whip up the takeaways for us? Yes. If Tesla wins the race to self-driving cars,

thank Shadow Mode. I took my musk meter. I set it for like 18 months from now. Does that work for you? Don't hold your breath. Second story was Zillow. It needs to know that it doesn't always make sense to cut out the middle man.

Selling a home not quite the same as like Hailing a taxi. Third and final story, in China for luck and coffee, mobile matters more than real estate. And all you should be doing after this podcast is going to the Luckin Coffee website and staring at that weird shark video. Ready for a fact of the day? Please, can you hit it?

65% of airplane passengers, look at that flight path thing. That shows where your plane is between New York and Los Angeles. Only at least once on that flight. Now, that thing can be dangerously entertaining. It's dangerously obsessive. A couple of flicks over. I'm like, I had no idea that was in Polynesia. Guess what?

A 3D version is coming out? Yes. label everything that you can see out your window. That is a dangerous three-hour commitment I can in my cell phone. It'll become more addictive. It's extremely distracted. A couple other big stories happened yesterday in the markets. Check out our daily email newsletter to learn about Kraft Heinz, which just replaced its CEO,

because cost-cutting isn't always everything. And then Venmo, which is owned by PayPal, decided to whip out a credit card to get more profitable with its user base. A lot of users, not very profitable. We love to have any guys on today's podcast. remember to check out our newsletter at snacks.robinhood.com. And we'll see you tomorrow. 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, 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.