The Best One Yet - “The 2nd Kardash-icorn” — Under Armour’s mega-deal. Facebook is too-big-to-cancel. Coty’s Kardashian investment.

Episode Date: June 30, 2020

Coty Cosmetics shares popped on word it’s snagging 20% of Kim Kardashian’s beauty brand. Facebook is facing its second ever #DeleteFacebook moment, except this time it’s coming from its most important stakeholder: Advertisers. And Under Armour is trying to cancel the biggest college apparel deal in history. It’s a sign of how far UA has fallen.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. June 30th. It's actually technically halfway through 2020. It's some kind of solstice. We don't know which one, though. It also feels like we listened to the first half of the year on 2x speed. So we're going to go 4x speed for this one. This happens to also be way better than the snacks daily we did yesterday. By the way, we're going to need a profit puppy to announce we're halfway through the year. T-B-O-Y, Jack, first story please. Arfarf! Under Armour has been so busy trying to protect this house that it forgot to protect itself. It's trying to cancel. It's a 15-year deal with UCLA, aka the biggest apparel deal in college sports history. Second story. One deleted Facebook user becomes a new Instagram user. Sounds like an OB-1 quote, Jack. We're looking at the growing corporate boycott of Facebook ads

and whether Facebook is too big to cancel. Zuck, you may want to rebrand again. You already went from the Facebook to Facebook. Might as well cut the face or the book and just be book or face. For our third and final story, the unicorn of the day is Kim Kemp, Kardashian West? KKW Beauty just hit a billion dollar valuation after a $200 million investment by Cody Cosmetic. Cody's stock has fallen 85% in the past five years, but it has invested in

two Kardashians. But I did just stay in a holiday and express last night, Jack. Now, before we hit those three great stories, happy T-Boy Tuesday, everybody. Happy T-Boy Tuesday, you guys look fantastic out there. Now, Snackers, venture capitalists have real portfolios and anti-portfolios. That's right, Jack. You got your real portfolio. which are the companies, you know, you actually put money into, you actually invested in. And then the anti-portfolios are the actual companies that you passed on. You didn't invest in that. This is like the only humble thing venture capitalists do. This Uber thing will never take off, yeah?

Uber is not the time in English what? Just use your iPhone and call the cab. What do you need an app to call a cab for? So Nick and I did a headline hammer to figure out the three gems of stories to whip up for you in this pod. That's what we do every day, Snackers. We go through it midway through the day and we come up with your beautiful mix of snack story. But here are a few stories that we considered, but ultimately passed up. Case in point, story number one, luck and stock officially delisted from NASDAQ.

Apparently, the chairman of the board is trying to get rid of the board while the board is trying to get rid of the chairman. Does not sound like a healthy scenario over there. Second story, CAA and N-EA launch A-V-C. ASAPE. Translation Jack, what did those acronyms actually mean? Creative artist agencies teamed up with new enterprise associates to launch a venture capital firm as soon as possible. And then the third story we could have covered, Lulu Lemon is acquiring at-home fitness startup

MIR for half a billion dollars. Now, this story is incredible, but it literally broke five minutes ago right before we're going to record today. Snackers, this is such a snack-worthy story that Jack tried to hoard it. We're going to cover Lulu Lemon tomorrow, like 99% chance.

But those are today's anti-snacks. That's the anti-snacks. Now let's hit our real snacks daily. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The 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 FINRA slash SIPC. For our first story, Jack, throw on the spandex.

We got Under Armour ending its biggest apparel deal in college sports history. Let's rewind to 2016. Just four years ago, but Nick, it felt completely different. Oh, so different. The Summer Olympics, you know, they weren't canceled. Michael Phelps won five more gold medals in his fourth Olympic Games, bringing his total golds to 486. Divide by seven, I think that's the total number of abs he has in like the left side of his biceps.

True, but Michael Phelps is from Baltimore. So apropos because fellow Baltorian Under Armour had just passed Adidas in 2016 as the number two athletic apparel company in the United States. Not too shabby. Number one being Nike, Jack, there was a lot of mojo going on those days. Well, Under Armour was feeling good. So they pulled off the biggest sports apparel deal in college sports history. That's right. Under Armour got the exclusive rights to design all the uniforms and shoes for the UCLA Bruin athletes. UCLA, pretty big deal, Kareem Abdul-Jabbar. Bill Walton, Russell Westbrook, that's all I got. Jack and I spoke earlier. He only could name those three, but I like you left like an audio ellipsies, Jack there. That worked out really nicely.

280 million dollars Under Armour was going to pay UCLA for the biggest product placement deal ever. And that means getting sweat-wicken jerseys with a big UA logo on top of those athletes. And when you know it's Under Armour, you know it's like military grade stuff. Adidas teams are 40% less likely to be able to tackle you if you have Under Armour. If you get too close to a candle when you're wearing Under Armour stuff, you will explode. Under Armour paid so much because it was in an arms rate with Nike and Inditas. Who can protect this house, protect dearly? Now, the big news from yesterday, Under Armour is canceling the deal.

They're canceling. They came out with this official statement from their lawyers. We've been paying for marketing benefits we have not received. Now, UCLA responded publicly. We are exploring all of our options to resist Under Armour's actions. it feels like the UCLA lawyers could have just responded, uh, you signed a contract too bad Under Armour. I'll have my people send you over a PDF of the contract you signed. You can't just cancel it. Maybe you can just reread the contract and we can continue on with our lives.

Now, this deal, though, is a sign of bigger issues at Under Armour. Jack and I jumped in Snacksdale. Check out the latest earnings from Under Armour Snackers. This thing is down in the minors. Sales fell by 23% in the first quarter and they notched a loss of $590 million in just three months. And investors have been paying attention. That's why Under Armour stock is down 55% just this year. Which looks even worse compared to Nike, which is down just 6% in this coronavirus year. And Lulu Lemon, the king of Ath leisure, up 25%. So, Jack, what's the takeaway for our buddies can sweat over at Under Armour?

Under Armour is too much Ath, not enough leisure. Yes, we have said it before, and we will say it again. You look smack dab at the top of the investor relations page for Under Armour. Here's the quote. No joke Snackers. We are focused on performance. Yeah, we know Under Armour. That's the problem.

Do less. Nobody else in the consumer world is focused on performance these days. It's all about chill, comfortable, and fashionable features. Half the time you read something from Under Armour, it feels like they're screaming at you or verbally attacking you. It's all about bigger, faster, more intenser for the gear that you're like toss in 45-pound plates around with Under Armour. Snackers, this brings us to a very not fun fact. Under Armour stock was $40 when they signed that UCLA deal. Jack, where is it right now? Eight bucks today. It's down by like

80%. This is what happens when your business is on the wrong side of a megatrend. And trying to crawl out of the UCLA deal, it reeks of desperation for Under Armour. For our second story for the first time, an anti-Facebook boycott is actually showing strength. But Facebook might be too big to cancel, which leads to an activist organization called hashtag stop, hate for profit, that has this displayed on the top of their website. It calls for its visitors to stand in solidarity with our most deeply held American values of freedom, equality, and justice. And not to advertise on Facebook's services in July. Wow. Bold statement, and it turns out 93 companies have heated the call. That's the kind of thing you get a conch shell for.

when you scream from the top of your building. 93 companies have joined the Facebook advertising boycott that hashtag stop hate for profit started. This is the movement that's protesting Mark Zuckerberg, but, you know, his lax content policies on the book. Because Facebook is a super spreader. High profile misinformation and post-glorifying violence have found a home on Facebook.

Speaking of super spreaders, saw Jack this weekend. We were six feet apart. There was some guack in between us. Jack just jumped right in there with the chips and the double-dippin. It was the first time Nick and I have whipped up the takeaways in person in a while, and I got a little over-excited with the guac ball. He apologized, everyone understood, no harm, no foul, great guac. I really feel bad about it, though.

I was a super spreader of the guac ball. Jack was feeling guilty, but he did great. He was great. NASCAR on the whole thing. Now that we're moving on from that embarrassing moment, quick refresher on why ads on Facebook are so powerful. Snackers, Facebook lets you target a precise, exact type of person, so you're not wasting any ad money on the people.

who are never going to buy your product. Imagine if you run a steakhouse and you're trying to advertise to get new customers. You don't want that ad being seen by vegans who obviously aren't going to come. Boom, you get on Facebook and that steakhouse can exclude anyone who's recently liked, you know, like a cruelty-free anti-dairy tofu bar in the East Village. A perfect proxy for people who aren't going to come to your steakhouse. But then you can hyper-target the Carnivores Anonymous Facebook group whose members are enjoying talking about the latest medium wherever is rare.

Facebook's ad. targeting superpowers make it even more incredible that 93 companies have pledged to stop using it. But if you're a Facebook shareholder right now, you have some reasons to be a little concerned. This isn't just crunchy activist companies like Ben and Jerry's that love to pick a fight in any social venue. You got Baby Boomer Corp Inc. Coca-Cola, Honda, Verizon. They joined in on this anti-Facebook craze too. All the more telling, because you know it took like six layers of corporate and PR conversations for this to get approved. And then Debbie had to sign off in Delaware before faxing this thing off to corporate to say yes to.

Coca-Cola usually doesn't step out of their lane into social issues, but they are with this Facebook thing. Plus, wildly, this is accelerating sign-ups to a conservative version of Facebook called parlor, which basically zuck-to-zuck. Doesn't look good for Facebook. So, Jack, what's the takeaway for our buddies over at the Facebook? The thing is, Facebook is arguably too big to cancel. In 2018, Snackers, remember the delete Facebook movement? That was just a blip.

User numbers completely weren't affected by the delete Facebook hashtag campaign. And that's because those who did end up deleting Facebook probably just still use Instagram. Facebook is Zuck's left pocket, Instagram's his right pocket. And WhatsApp's the awkward cargo pocket on the left side of the leg. And finally, there are so many small and medium-sized businesses that are advertising on Facebook. Yeah, turns out the world's top one. brands are only like 6% of Facebook's actual revenue. Small and medium businesses can't afford to be an activist company like Ben & Jerry's or Coca-Cola. Facebook is their only way to reach new

customers. So Facebook stock is only 10% down from its record high in the last week. That's not nothing, Nick, but it's also not life-threatening to Facebook shareholders. For our third and final story, this one's wild. Cody cosmetic stock just searched 12% on Word it's investing in another Kardashian. Kim Kay is a officially a unicorn CEO. Maybe it's her. Maybe it's Maybe it's Mabelene. Now, remember last month, Nick, when Forbes magazine ripped apart the Kardashian-Gener clan for historically, for years, fludging their numbers to the public. Jack, officially pulling our nomination for Chris Jenner for a counten of the year. The Kardashian-Gener clan really wanted the world to believe that each

daughter of the family was a self-made billionaire. Well, good thing because they managed to pull off another self-fulfilling prophecy. because of Cody. Cody is splurging $200 million for a 20% stake in KKW Beauty as in Kim Kardashian-West. We crunch the numbers. That means KKW Beauty is worth a billion dollars. Plus, the lawyer has gotten the old option for a majority stake later on if we feel like it clause. This means that Kim Kardashian-West built a cosmetic company on Instagram that is now worth $1 billion. Beep, beep, beep, back up to just a few months ago, Cody spent $600 million for 51% of Kylie Cosmetics. We did the math. Trust us, that means Kylie Cosmetics was worth $1.2 billion.

And it means Kylie Jenner built a cosmetics company on Instagram, like her sister, worth $1.2 billion. This all sounds like the perfect Thanksgiving episode of keeping up with the Kardashians. Which one of us is not a billionaire right now, because third time is definitely a charm. You have to sit at the kids' table. But the real shocker here is Cody St. which has been in desperate need of like a level five makeover the last few years. Founded in New York, New York, this 116-year-old company has too many brands that we can even keep track on. 20, 30, 40, no, 77 brands under these guys. Now, they actually pioneered the celebrity sponsorship model going way back to David Beckham,

way back to Celine Dion, a little bit more recently to Jennifer Lopez. They also did James Bond so they can work with fiction and nonfiction. It's kind of impressive. Cody's stock is down 85% in the last five. years, and it has changed its CEO four times in the last five years. Part of the issue, which Jack and I have identified, it's controlled by JAB, which is not an expert in makeup. I don't think anybody at the company has ever worn any makeup. JAB Snackers, you may remember, is the German investment fund that we've talked about as being obsessed with coffee, not cover up. They own crispy cream,

Pret, they own Pete's, they own Green Mountain Coffee. Not a single bronzer in the entire cabinet at this place. Let's hazy Kardashians, yeah, K, Koti, Kodi Maddam K. So Jack, what's the takeaway for our buddies over at Cody? This is all about the pivot to the direct-to-consumer business mob. Snackers, Cody believes celebrity gives a unique direct-to-consumer advantage when it comes to sales and marketing. On the sales side, most of KKW beauty sales come through their own website and through Instagram, not through some Macy's or JCPenney middleman. That's totally different than Cody's other 77 brands where you like walk through Bloomingdale's and you get thrown sense in your face the entire way. Then look at the marketing side. Kim Kardashian West has 177 million followers on Instagram. Boom, she pumps one of these out in a picture. Is that an ad?

It's not quite an ad, but it's basically an ad. It's her company. I don't think she has to do the hashtag ad disclosure, but that's a gray area. Cody's picked up on the fact that celebrity partnerships can thrive in a direct-to-consumer business model. Jack and you'll whip up the Takeaways for us over there. Under Armour is canceling its UCLA deal 10 years early. Oh, and it shows how badly it missed at leisure. Second story. Facebook is facing its biggest trust crisis ever, this time with corporations. But Facebook might be too big to cancel. Third takeaway, Jack? Third and final story, Cody's 77 brands aren't selling well through middleman department stores. Celebrities can sell direct to consumer through Instagram, so Cody's investing in that.

Now, time for our snack fact of the day. This one's sent in by Chuck Isgar in lovely Providence, Rhode Island, right off the air street. What country, Nick, do you think probably has the most time zones? I don't want to get sensitive. I'm thinking like wider countries, like the Russia's, the U.S., of the world. That's what you'd think. What about Antarctica, though? Because it's at the bottom, so it gets a little thin slice of all 24.

Doesn't go to the Olympics, doesn't count in this one. It's actually France, according to our buddy Chuck, which has a shocking 12. 12 time zones. And that all was courtesy of France's far-flung overseas territories that's still got control of. It's only got one time zone in Europe, and then it's got 11 others on like St. Bart's, an island off of Antarctica, and a bunch of other spots. Plus a lot of ambiguity about Quebec, which Jack and I had a lot of time discussing, we still aren't totally sure on that one. Now, Snackas, before we let you go, happy birthday to Anthony Russell in Buffalo, New York, who did 1368 Pogo Stick reps to a single Snacks episode.

Heather and Gary, couples that snacks together, apparently have birthdays. to get it. Unreal. And then Emmanuel T-boy at Edoran, who his actual nickname is T-Boy because his middle name is T-O-W-W-W-W-N. Snackers, we should definitely do this tomorrow and you should ask your friends, H-Y-H-Y-S-D. Have you had your snacks daily? If you know, you know. See you then. This is Jack. Nick and I both own stock of Luckin, and we both own stock of Lulu Lemon. 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.