The Best One Yet - “The 5th Beatle” — Spotify’s Sgt. Pepper’s moment. Goodyear buys a spare. LinkedIn gigifies lawyers.

Episode Date: February 23, 2021

Spotify’s 1st investor event reminds us more of an album than a product launch. Cooper Tires surged 29% in the most important day for Ohio companies. And LinkedIn is reportedly launching a new marketplace that will change how you think about the gig economy.$CTB $GT $SPOT $MSFTGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkSend us your Black History Month SnackFact here:https://docs.google.com/forms/d/1Hu00HOlQ-qb6S7Jx4CgnGOfzrA67_j_SLFqxvFKinEQ/editWant 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 Tuesday, Tea Boy Tuesday, February 23rd. To start, a sad milestone was passed yesterday. The United States has 500,000 COVID-19 deaths. Okay, just the numbers here. That is more than World War I, World War II, and Vietnam combined. It's a lot of American casualties. So to anyone who's lost someone or anyone who's just had a terrible last year, we are thinking of you. And we are dedicating this T-boy to you. The best one yet. Jack, first story. Goodyear and Cooper are the number one and number two American rubber and tire companies, and they just merged. Jack, most important day in Ohio, stock market history since Standard Oil. For our second story, Spotify just showed its complete devotion to audio everything in its first big analyst day. We're thinking less Apple looked more like a Beatles album. For our third and final story, LinkedIn is ironically the most professional of the social networks. Jack, their fifth business line, all you. Can we say Uber for lawyers?

We just said Uber for lawyers. But Snackers, we're all feeling it. Tuesday felt like Saturday, which seemed like Wednesday, which looked just like Thursday. So before we jump to that wonderful mix of stories, you may be enjoying some Merlo Monday. But the biggest 20-20 wine industry loser, we noticed, is champagne. Champagne, champagne sales down 20%. They got 100 million unsold bottles of this stuff worldwide. It's logical.

There were fewer clubs, fewer pop bottles last year. Jack, more micro-wettings, more micro-microw. Praseco servings. But we noticed yesterday, we may have a buy-low, sell-high situation going on in champagne. Turns out luxury giant LvMH is buying half of Armand de Brignac champagne. You haven't heard of Armand de Brignac? Yeah, maybe you haven't. Jack also goes by its nickname Asa Spades Champagne. You still haven't heard of that champagne? You may not have that's because it's Jay-Z champagne brand that is targeting, as they call it, super luxury market. You still still, still Haven't heard of it? Maybe it's because a bottle's going to cost you anywhere from $300 to $65,000 a bottle.

I thought Nick made up the term super luxury, but then I heard that price tag. It's true. He did. He asked me about it. It's actually, this is the self-driving private Bitcoin jet when it comes to sparkling wine. This champagne is so extra comes with its own guac. Jack and I jumped in snack style. This JZ champagne was last valued at a cool $250 million. dollars. Ipso facto JZ Champagne is worth 38,461 bottles of itself. For Team Boy Tuesday, we want to know what would you name a $65,000 champagne? Tweet us at Robin Hood Snacks, at Jack Kramer, at Nick of New York. Super ultra extra luxury. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks are about to hear rain food. It's air candy. They don't reflect the views of the robberhood family.

It's all informational just so. 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.

Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, America's two biggest tire companies, both based in Ohio, both merging together. While everything else about cars is changing, tires are pretty much staying the same. Yeah. Can you give us a little, a little. Buckeye taste over here. Just a little taste. You know, I went to the Michigan versus Ohio State football game in 2017. You survived that game. I think it's survived, is what you say. We lost,

and my memory and emotions are burned by OH. And then the other guy goes, I-O. Yeah, it's the thing. Everyone in Ohio says, right? That's why we say Cleveland is the Paris on the lake. It really is. Snackers, this story is about Goodyear, tire and rubber company, which is acquiring Cooper Tire and Rubber Company for $2.8 billion. Branding was very low. a century ago. That's what they did. That was the strategy. Now, the stocks jumped 21% and 29% on this deal, and we're expecting parades in the hometowns in Ohio, Akron and Finley. Yeah, reason for the jump in Cooper stock, pretty clear. Shareholders get in 24% more with this acquisition price. For Goodyear, investors are probably thinking that this acquisition will boost revenues and cut

costs. Beautiful synergies. Synergies, synergies. But before we jump too deep into the story, snack style, funny thing we noticed. about the tire industry and these two tire companies. The tire industry is actually shockingly creative with how they do advertising. They basically pioneered O-O-O-H, out-of-home ads. It's an industry surprisingly dominated by tire marketing panache. Okay, the number one tire company in the world, Nick,

is Bridgestone, which is based out of Japan. And Bridgestone also manufactures golf balls the only ad you can whack at with a stick. The number two global tire company is Michelin, which is based in France. And they invented the Michelin Restaurant Guide with the Michelin Stars to get you in cars driving around checking out restaurants. That was the idea.

Are you ready for more? Please. Number three is Goodyear Tire and Rubber Company based in Ohio. Classic the Goodyear Blimp. It has been quietly floating over sporting events since 1969. Golf balls, restaurant guides, and blimps. That's how the tire industry advertises itself. That's what tire does.

The beer and car industry, they just do lame TV ads. the tire industry, tires create their own marketing adventures. So Jack, what's the takeaway for our buddies over at Cooper and over at Goodyear? To win in a commoditized business, scale is the silver bull. Snackers, tires are made of rubber, plastic, metal, all the same, all undifferentiated, all commodities. And despite a ton of change in the car industry, like electrification and self-driving cars, tires are expected to stay pretty much the same. Why mess with the wheels? It's worked Well, for a few millennia. The wheel's actually different than the tire,

you've got to stick with your chassis. Regardless of geometry, the key to winning in a commoditized industry, it's one word, it's scale, and this merger shows why. On the revenue side, together, Goodyear, and Cooper can enjoy a 2 plus 2 equals 5 situation. Yeah, together they're going to make more money. 2 plus 2 equals 5. Because instead of competing on price like they are right now, they can keep prices higher together.

Yeah, you want a made in the USA tire? Great. there's going to be one price a little bit higher than it was before. And on the cost side, Goodyear has already said they expect $165 million in annual savings by cutting duplicated efforts since they're one company now. They're not going to close any of the 50 combined factories they've got. It's like the blue collar jobs at these tire firms, those are safe. Instead, they're going to find $165 million in savings in R&D, in sales, in administration, and other white collar desk job departments. And cost, this tire.

merger can mean two plus two equals three. Together, they're saving money. To profit in an undifferentiated commoditized industry, scale is the silver bullet. For our second story, Spotify just hosted its most important presentation ever. Honestly, ever checked. John, Paul, George, and Ringo, Spotify just had its Beatles moment. First of all, before we jump into this, Swedish CEO, Daniel Eck, maybe the fifth beetle, voice of a Viking. Second of all, wasn't George Harrison? yours and Molly's first wedding dance? He was. Well, like, not the literal person, but yes, the song. Yeah.

That was a great song. Yeah, it was. Now, yesterday Spotify had its big event. They call it stream on. It's basically an analyst event. It's when big corporations pull all the stops to try to impress Wall Street so that they upgrade their stock price target. Basically, it's a graduation speech meets wedding toast, meets shareholder meeting, meets

bar mitzvah. Think of it like when Apple unveils a new iPhone or when did. Disney shows off all the new programming for Disney Plus. Hey, we got 10 new Shmovies. You're going to love him. So Nick Texts me and he's like, Jack, the Spotify event is just like Sergeant Pepper's Lonely Hearts Club. No joke. Jack and I listened to this event for a full hour and we were like, you know what? This is more of a Beatles album than a product unveil. I called my dad. He confirmed.

Yeah. Sergeant Pepper's is the first major rock album released that did not rely on like a single that everyone already knew. I love that Ted weighed in on this. See, you're meant to listen to Sergeant Pepper's Lonely Hearts Club band is the whole album. Each song flows into the other songs. And Spotify's event was an album of new product features that also flow together like Sergeant Pepper. And here's the wild part. Each one of Spotify's new features kind of matches up with the song in Sergeant Pepper's album. Case and point, example one, with a little help for my friends. Barack Obama, husband to top 10 podcaster Michelle Obama. Good point. He's launching his own podcast. with Bruce Springsteen exclusively on Spotify. Second example here, Lucy in the sky with diamonds. They announced a new subscription tier with high-fi quality audio

so you can like hear the butterfly wafting its wings. The third example, getting better all the time. There's a new techie AI feature that will transcribe what's written in a blog post and turn it into an audio-spoken podcast so you can read with your ears. The fourth example, fixing a hole with a rain gets in. the most obscure of the tracks. But for Spotify, they're adding polls and question and answer features so podcasters can interact with their audience. And the fifth, Sergeant Pepper's song that matches up with a new Spotify feature, Jack, when I'm 64. Spotify's expanding to 80 new countries, so a billion

people will now have access. So Jack, what's the takeaway for our buddies over at Spotify? Spotify is trying to build the flywheel effect for audio. Here's their flywheel. More creators, get more listeners who attract more creators who then bring on more listeners, et cetera, et cetera. It's a flywheel. Spotify announced yesterday a chorus of features for both listeners and creators. Meanwhile, Apple and Amazon, they're two big rivals in audio. They're just adding treats for listeners, audiobooks, music, original podcast. But Apple and Amazon aren't as focused on the creator side. So they don't enjoy the flywheel effect. And the flywheel is how growth begets, growth begets more growth eight days a week. That's Spotify's ticket to ride. Well, my God.

guitar, slowly they weeps. For our third and final story, Microsoft's LinkedIn is reportedly launching its fifth and critical business line. Because gig workers aren't just Uber drivers or wag dog walkers. No, they're not. Now, LinkedIn has become the professional stocking network for white-collar jobs. LinkedIn was acquired by Microsoft back in 2016 for $26 billion. And if you're like most LinkedIners, you casually check to see who's casually checking out your profile. That's way you do. It appears if you're a casual LinkedIn worker that not much has changed on LinkedIn since Microsoft acquired it. And that's why we were shocked to see, according to reporting from the information, that LinkedIn is launching something called LinkedIn Marketplaces. Nick, this isn't

for selling your barely used mountain bike. That's Facebook marketplace. LinkedIn Marketplace lets qualified professionals sell their work on an hourly basis as independent contractors. And then LinkedIn would take 10 to 20% of the deal when they launched this thing in September. So Jack and I are thinking, this means one thing. We are entering a new era of the gig economy, gig 2.0. When you think about a gig worker, you think about leaving a one to a five-star rating on the Uber app and then deciding whether to leave a tip or not. And technically, a gig worker is someone who isn't an employee.

They just received a 1099 form as an independent contractor. They're also known as freelancers, and they often charge by the hour or by the number of projects that they do. So you now have 59 million American workers who are full-time freelancers in 2020, and that has tripled since 2017. LinkedIn marketplaces would be a long-term bet that gig workers in 2020s will be different than gig workers in the 2010. Yeah, this is gig 2.0. You're now going to have white-collar workers, like accountants, app developers, lawyers, all gigging themselves out. That's why we're calling this the Uber for lawyers, who could enjoy flexible work hours, define their own schedule and be their own boss. Now, when it comes to Gig 2.0, there are already two other companies

making the same bet. One of them is Fiverr, one of them is upward. And their stocks fell 12% and 7% yesterday on news that Microsoft's little profit puppy is becoming big competition. So Jack, what's the takeaway for our buddies over at LinkedIn? LinkedIn has become the most mature social network there is. Snackers, think about this. Facebook, Snapchat, Twitter, Pinterest, all of them are really ads businesses. Over 90% of all their revenues come from ads. LinkedIn sells ads too in its own version of the newsfeed. But LinkedIn also takes fees from HR departments with LinkedIn jobs, helping them find candidates on LinkedIn.

LinkedIn also sells something called LinkedIn Premium for advanced LinkedIn stocking. Jack LinkedIn also sells memberships on LinkedIn learning, formerly known as Linda.com. Yeah, you can join for like 30 bucks a month and gain. access to learn anything, like how to video edit over the course of just a weekend. And all of these revenue streams, they're all scaled across LinkedIn's whopping 740 million users, which brings in $8.8 billion in revenue from Microsoft every year. Marketplaces, if it happens, would be another mature bullet point on LinkedIn's LinkedIn resume. Jack, can you whip up the takeaways for us over there? Good Year, Ty, and Rubber. They hope on the revenue side, it's 2 plus 2 equals 5. But on the cost side,

the merger becomes 2 plus 2 equals 3. Spotify seems to be the only music streaming app focused on both creators and listeners. And that can mean the flywheel effect for audio like a beautiful Beatles album. For a third and final story, LinkedIn has four business lines already, maybe a fifth coming.

Geek Economy 2.0, white collar edition. Now, time for our snack fact of the day. This one sent in by Patrick Young. Patrick, the pot is yours. Hey, Nick. Hey, Jack. This is Patrick Young. and my black history snack fact is on Robert Smalls. Robert Smalls was born into slavery in 1839,

and he stole a Confederate military ship named the Planter in 1862 by disguising himself as a captain and using hand signals in the secret codebook to help him pass Confederate guardships so he could rescue more slaves in their families. He then escaped to freedom himself and ran for Congress where he won. Now, it's rare you get to use the word commandeer. Good point. But it feels like Robert Smalls definitely commandeered that ship. We definitely should use that word for the situation, Jack. Robert Small is the congressman with the coolest backstory in history.

Snackers, before we go, remember we grow when you share your snacks. Jack perfectly put, ask your friends, H-Y-H-Y-S-D. Have you had your snacks daily? And Nick and I'll see you tomorrow. If you know, you know. And before we go, happy birthday to Snacker Zoe Winehouse, turning one in Toronto, Canada. Also in Toronto, Canada. Happy birthday to Kevin. and Alexa Parsons down in Weston, Connecticut, and Brienne Gorbett in College Station, Texas. And Nikiel Shill down the street in San Francisco. Talia, congrats on getting promoted in Portland, Oregon.

And Jessica Carlson, keep sharing your snacks to the rest of your second graders down in Fort Worth, Texas. And to anyone else celebrating anything today, make today a D-Boy. Celebrate the wins, and Jessica and Brian, stay safe in Texas. This is Jack. I own stock of Amazon, Nick owned stock of Apple, and we both own stock of Spotify. 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, 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.