The Best One Yet - “That’s a $111M chicken wing” — Pilgrim’s Pride’s chicken-fixing. Uber’s pet unicorn. BlackRock’s hedge.

Episode Date: October 15, 2020

Thursday’s the new Friday. And Pilgrim’s Pride just dropped millions to settle a chicken price-fixing lawsuit that reminds us of Big Tech. Meanwhile, Big Banks kicked off earnings season, but we��re more interested in the diversification going on at BlackRock. And we noticed that some subtle job postings reveal major moves from Uber’s moonshot idea: Freight.$PPC $BLK $UBERGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form: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 Thursday, October 15th. Thursday, aka the new Friday. I knew you were going to say it, Jack, it is the new Friday. By the way, did you do the slamming salmon last night? I did.

Alex made seared slamming salmon, and I had leftovers for lunch. Jack, I threw on some sashimi togarashi seven spice rub. Wipped up our own slam and salmon over here. Wait, you're talking seared slan salmon sashimi? It's from Sam Slamming Salamon. That's the only kind of slamming salmon. We're getting what's our first story, Jack? Well, this happens to be the best one yet.

Pilgrim's Pride, a poultry producer, just got punished for punking us on price. We're talking the biggest price-fixing scandal in poultry puck in history. For a second story, a job posting can speak a thousand words. Yeah, like how Uber's Moonshot Trucking Project is its new pet unicorn. For our third and final story, the big banks kicked off earnings this week. We're more interested, though, in the situation over at Black Rock, not Blackstone. Black Rock's teaching diversification 101. But before we jump into that wonderful mix of stories, you're not going to see anywhere else.

Yesterday, we mentioned the most expensive dinosaur ever sold. 32-mill, a dinosaur named Stan, aka Tyrannosaurus Millionaire. Well, it turns out when Jack and I jumped in snack style today, we noticed that another T-R-X set a record. T-R-E-X, Inc. That's right, ticker symbol T-R-E-X, aka T-Rex, a decking company worth $10 billion over in Winchester, Virginia. Trex is worth about one left. Not too shabby for our buddies down south. Trex's got the first ever patent for composite decking.

Looks like wood. Yep, feels like wood. Check, but doesn't splinter like wood. Jack, is this thing just petrified wood? I can't believe it's not wood. That was Trex. Trek stock has also doubled this year and has hit an all-time high. When you're working from home in Texas, you zoom into your Google Hangout from your deck.

And there's nothing more corona economy than decking out your deck. So, Jack, what's the takeaway? for our buddies over a trek slash T-R-R-R-E-X. It is good to be king. But it's better to be T-R-E-X in 2020. Let's hit our three stories. You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal out the way. It's 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. Right.

Digestable Business news for you Robberhood Financial LLC Member Fenra Slash SIPC For our first story Jack

celery or carrot carrot? Yeah celery is mostly Just water Right Trick question answers Always ranch

Snackers Pultry Powerhouse Pilgrims Pride Is paying up $111 million To the U.S. Justice Department

I think that's a Chickenwing reference And I like it Because this is the biggest chicken Price Fixing Scandal ever Snackers we got

cluckings going on over an aisle 6. Colorado-based company is the second biggest chicken processor in the U.S., and it's called Pilgrims Prize. Simple name, $4 billion company, about half a lift, give or take. It notched $11 billion in sales of chicken last year,

turning a $500 million profit, not too shabby. And because of the nature of the story, Jack and I jumped back in time to 2018, noticed they had a nice 10% sales jump that year. Seems like a nice sales jump for the chicken industry, which doesn't grow up. No, you find out it's blood money.

That's right, Snackers. There was a seven-year effort across the chicken industry to fix prices and to fix them high. Jack, I'm going to take the six-piece McNuggets, but with a side of suppressing competition. Snackers, did you have a KFC fried chicken sandwich? Or did you go to Popeye's, Chick-fil-A, Walmart, Kroger's, or Costco in the years 2012 to 2019? If you did, check those receipts because you probably got clucked. You got clucked badly because Pilgrims was charged by the Justice Department for, coordinating with Tyson Foods and Purdue and two other big chicken companies to raise prices on that chicken.

Here's how it went down. Let's say I'm a pilgrim pride salesman, and I'm trying to sell chicken to Popeyes because, you know, they just launched the fried chicken sandwich. Jack, don't sell yourself short. You're the salesman of the month. So Jack approaches me and says, you know what? Okay, Popeyes is buying chicken now for their chicken burger. You sell them as well? Yeah, I'm selling to them as well. So how about I'm going to go ahead and raise the prices of chicken by like four cents per pound. Sound good? Deal. So Jack, no of us. are going to sell for less than three bucks a pound, correct? That's right, only more than three bucks a pound, and we'll both get, like, big bonuses at the end of the year for this.

By the way, Jack, this conversation had never happened. Tell Judy I said hi. Right, right, right, right. After a year's long investigation into all that, Pilgrim is the first of all those big chicken companies to sign a plea deal with the U.S. government. Because colluding on prices with a competition is illegal, they're going to pay $11 million to make this lawsuit go away.

Funny thing, if you notice yesterday, Pilgrim's pride stock jumped 6% after this news. Investors are just relieved that it's over and that the price tag is known. Sprinkle little contextual seasoning on this and you're going to see that Pilgrim Pride stock was already down 50% this year. Undercooked chicken ain't good chickens. So Jack, what's the takeaway for our buddy over at Pilgrim's Pride? This big chicken drama reveals the real threat of big tech that we face.

Snackers, Pilgrim coordinated with four other chicken producers to hurt consumers like us. Now, we all agree that that collusion that went down between the companies, it resulted in high prices and chicken for all of us, and that's wrong and that's bad. But Jack and I noticed an interesting connection here because big tech is also getting accused lately of anti-competitive behavior. The difference here is big tech companies don't need to collude with the competition in order to set prices high because there is no competition. That's right. Google doesn't need to collude because they're 88% of the U.S. search market. Even though big tech doesn't collude in a shady way like the chicken companies do, the end result is the same. And that's why the

Justice Department is expected any day now to charge Google with antitrust crimes just like it did Pilgrim. For our second story, we got a wild bit of like investigation going on here. Uber freight is now worth $3.3 billion. We're talking about Uber's moonshot and Uber's letting the logistics industry in on Uber Frigg. But Snackers, before we even like talk about Uber freight, we got to talk about Indeed. Indeed is a job posting website that you've probably heard an ad for on like NPR or a podcast or the radio. This is not that ad. But in those ads, you'll hear like, use the promo code Indeed for your first job posting for free. Connecting people with careers. I'm so sick and tired of job boards, Nick. But the fascinating thing about Indeed is that they share data about the types of

workers companies are hiring for right now and one of them caught our eye. Drivers. Yep. The number of driving jobs. Think like delivery, long-haul trucking. That's up 11% since February. That's because if you're ordering a new ergonomic chair from Target because you're working from home, guilty. You need a trucker to get that chair to you. Now, this is interesting because Nick and I asked ourselves, is there a connection with this story to a publicly traded stock? Actually, full disclosure, Snackers, Jack tells me what he put in his cold oatmeal. I'm asking if there's a publicly traded stock we can reference in this. I mean, that's it for this one. Yes. Yep. Uber. It's Uber freight is the only Uber to that's not based in San Francisco, Jack, GPS. It's based in Chicago because Chicago does logistics. Yes, they do. Now, Uber Snackers, it's got two moonshot bets going on. One is self-driving Ubers that would cut out the drivers and ultimately make Uber probably profitable.

Uber Freight is the other moonshot bet. It's like UberX, but it's connecting warehouses with warehouses. It's not as sexy. And the gig workers in this case are truck drivers, and instead of a Honda Accord, there is an 18-wheeler. And these truck drivers are hoping every day that someday a T-shirt company is going to need a sudden shipment of cotton and they're going to hail an Uber freight. They're going to hail an Uber freight and they're going to hope there's no surrege price.

But the other thing Jack and I noticed about Uber Freight is that they also raised money last week, a whole bunch of money that made them hit a $3.3 billion valuation. Interesting because Uber, the parent company, is worth $62 billion based on Wednesday's stock. price. Which is awkwardly six lifts, by the way. Uber's looking at this little 18-wheeler business as a pre-pubescent profit puppy. And basically they're treating it like a unicorn pet too. Get Uber Fritz and Scott's miracle grows so this thing grows big and healthy and strong. And it needs that because trucking is an inflexible and expensive business. You need to sign contracts and you need to sign them well in advance of shipping that cotton from your t-shirt company to wherever.

You're not like spontaneously hauling 50,000 gallons of milk from Michigan to Miami. If shipping things required less planning and you could actually do it spontaneously, a lot of businesses could benefit from that flexibility. So, Jack, what's the takeaway for our buddies over at Uber Freight? Uber Freight's latest investor is the Lord Various of Freight. Great guy, a whole bunch of spies throughout the Seven Kingdoms. Uber Freight just received $500 million, not from its parent company Uber Technologies, but from Greenbrier Equity Group.

So Uber doesn't own 100% of its own side hustle anymore. Greenbrier is a part owner. The reason there isn't because Uber's not committed to Uber freight. It's not trying to foist Uber freight to Greenbrier Equity Group. Uber wants Greenbrier's intelligence because Greenbrier is a critical strategic investor. Greenbrier has made a bunch of investments already in dozens and dozens of shipping and logistics companies. Honestly, Jack and I checked out their portfolio, you're not going to recognize a single name in that thing. Like Varys' little birds are scattered throughout Game of Thrones.

Love them. Greenbriar has investments scattered throughout the shipping industry. So to disrupt the shipping industry, Uber needs Greenbriar's intel. Uber needs a strategic investor. For our third and final story, BlackRock just invested big in electric vehicles. The same week, it's investing big in Saudi oil pipelines. We're talking about diversification at the highest possible level. This story is about Black Rock, not Blackstone,

No. BlackRock takes your money and invest it. Don't make the wrong turn in Midtown. It's going to be a bad situation. BlackRock is the biggest money manager in the entire world. We're talking AUM here. Assets under management 7.8 trillion dollars of regular people's money invested in BlackRock funds. We can't measure this on lifts. That is three COVID stimulus packages passed by Congress. Oh my God. We've never ripped on Lyft this much in a single episode, Jack. Well, there are one-sixth of an Uber. So two big things that Jack and I noticed yesterday. The first is that one of Black Rock's funds just made the leading investment in a startup called Arrived.

Arrived is a UK-based electric bus and electric van company. UPS is also an investor and they're planning on buying up like 10,000 of these things. Yeah, UPS is going to deliver packages in electric delivery vans. And Arrived just built their first factory in the United States, a micro factory, adorably in Rock Hill, South Carolina. They call it a micro factory because electric vehicles require way fewer pieces to assemble it, than like a gasoline-powered car does. Yeah, there's no carburetor on this chassis, is there?

So Arrived is pre-IPL, though, which is unfortunate because it's a classic sumo stock. S-U-M-O, it's sumo. We're straight up missing out because it's a private company. We can't invest. But BlackRock is kind of a big deal in Manhattan, like you said, Nick, with big money. And it just made a big position buying some private stock of Arrives. So congratulations, BlackRock. This is nice electric vehicles for the future.

We got it. Everything seemed really simple. But isn't BlackRock also investing in Saudi Aramco? That's the second thing we noticed about the government-controlled oil colossus of Saudi Arabia that's selling off some pipelines. Saudi Aramco is the second most valuable company on Earth. Yep, because they sit in Saudi Arabia, they're controlled by the government, and they suck up tons of oil from the earth to sell it to the whole world. And guess who's reportedly interested in buying up $10 billion worth of those pipelines?

BlackRock. Which means we find ourselves in a little bit of flippy floppy hypocrisy here with BlackRock. Isn't BlackRock the same company that claimed in March, which we covered on this podcast, that they have seen the light when it comes to environmental sustainability? Yes, we are. And Saudi oil pipelines are to sustainability what lasagna is to the gluten-freak-vegan lifestyle. You got cheese, you got gluten, you got meat. It is a no-no zone for sustainability.

So, Jack, what's the takeaway for our buddies over at BlackRock? Black Rock doesn't want its investments to do the same thing. Snackers, professors have studied what types of stock portfolios tend to perform best. And they're all saying diversification is rule number one to invest well. If you're investing in stocks that don't correlate, you could boost returns long term and then also reduce risk. BlackRock is taking the same approach with its trillion dollar portfolio as an investor who just has $100 would. Let's say you got an undiverse portfolio of like Uber and Lyft and Grubhub. In that case, if one gig company fails, they're all probably going to fail.

Let's say you got a diverse combo of like an electric vehicle company. and an oil company stock. Those companies are uncorrelated, aka they're diverse, aka higher long-term returns with lower long-term risk. So BlackRock doesn't expect its oil and electric investments to move in the same direction at the same time. Black Rock's kind of like rooting for the Lakers because it loves LeBron, but also betting money on the heat. Whoever wins, you win. Jack, can you whip up the takeaways for us over there? Pilgrim's pride has paid $11 million to the Justice Department because it got caught colluded. Big tech doesn't need to collude because there's no competition to collude with.

For our second story, Uber just got a $500 million check to continue scaling Uber freight. It's Uber's prepubescent profit puppy that just needs a strategic investor. For our third and final story, BlackRock is investing in electric cars at the same time it's investing in gasoline's derivative. Because whoever wins, BlackRock probably wins in this situation. Now, time for our snack fact of the day. This one we got from our buddy Kendall Baker's great newsletter, are Axio Sports worth checking out. According to a study in the Political Science Quarterly, which is an academic journal, non-white voters are seven times more likely than white voters to stand in line for more than an hour before being able to place their vote. That is wild, and the frustrating reason is that election officials send more resources to neighborhoods that tend to be predominantly white. And the outcome is a subtle but brutal form of voter suppression. This is one reason why what the NBA players did over the summer to pressure the NBA, was fantastic. They convinced the owners to open up their basketball arenas in all like 30 cities

in the U.S. as voting locations for Election Day this year. Honestly, Jack, I would fly back to New York City just to vote at MSG. The most famous arena in the world. Snackers, you looked fantastic today. We should do this tomorrow. Friday's the new Saturday. Funny, we will do this tomorrow. We will be doing this tomorrow. But we're going to ask you to ask your buddies for us, HYHYS day. Spread snacks and tell them have you had your snacks daily? That's how we grow. Nick and I'll see you tomorrow. And before we go, congratulations to snackers Cassandra Hyatt and Jesse Schwartz all open over in San Francisco. Hakuna Matata to those two. And congrats to David Riotti and Grayson to your anniversary over in Indonesia.

And congrats to Grant Shibo Esquire, who just passed the Colorado Bar exhibit. Also, Sean Lee also passed the CPA over in California. And congrats to Laura and Luther, who just got married in Queens, the biggest county of New York City. And congratulations. Grats, Grace, and Kyle expecting in St. Petersburg, Florida. Is Staten Island bigger than Queens, actually? It's a trick question. Brattleboro is the sixth borough. And happy birthday to Christine Biana from the Philippines. Snacking from Bahrain.

And happy birthday, Wardenite Matt Collins over in Grand Island. And Phil Rickett from Knoxville, Tennessee. And Melissa Croft over in New Haven, Connecticut. And Tracy Wynn in San Diego, California. And Michelle Chikarello in San Francisco. And Pranav Kumar in College Town, Texas. And Ian Hackett in Syracuse, New York. and Christian Kim in Atlanta, Georgia.

And happy birthday, Harry Burr is over in San Francisco, too. And Regelio Andres in San Antonio, Texas. We'll see you tomorrow. This is Jack. I own stock of Blackstone. 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.