The Best One Yet - “The (New) Roaring 2020s” — Disney’s Shmovies. Restoration Hardware’s Gatsby earnings. Pfizer’s vaccine payday.

Episode Date: December 14, 2020

Happy Vaccine Day, Snackers… The first US vaccines shots could hit this afternoon, so we’re looking at Pfizer’s $19B payday. Restoration Hardware’s earnings report reads like a Gatsby novel because its stores expect a new Roaring 20’s. And Disney shares hit an all-time high thanks to a new strategy we’re calling “Shmovies.”$RH $DIS $PFE $MRNAGot 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. Welcome back. It is Monday, December 14. Stocks dipped a little last week, but this pod rose a little last week. This is actually a way better than we did on Friday. T-B-O-Y, the best one yet, Jack, first story? Happy Vaccine Day, everybody. The first shots in the United States are expected to go out today. So Jack and I jumped in Snack style. We're looking at how much money Pfizer's going to make off these things. For our second story, Restoration Hardware's earnings report reads like the Great Gatsby. Yep, that's because they're expecting the roaring 20s to come again. Again, different century, but same ones. Different century, same story. Third and final story, Disney shares just hitting all-time high after Investor Day.

Oh my God, this one's fantastic. A new strategy that Jack and I are calling, get this, schmovies. Schmovies. That's what they're focusing on. Friday night is schmoovey night. But Snackers, before we jump into that wonderful mix on Monday stories, during the pandemic, the government has only sent out one round of stimulus checks. The airlines only managed to get one airline bailout.

Lyft is still only worth one lift. Tesla hasn't released a single robotax. Uber has announced zero profits, adjusted or unadjusted. And yet, Taylor Swift, the T Swift, she has dropped two albums during COVID-19. Snackers, that's right, Taylor Swift, she's more productive than half the S&P 500 right now. Midnight on Thursday, she dropped her second pandemic album called Evermore. First album in July was folklore. She's a big fan of the Oro Suffolk.

Collectively, the world has lost an ocean of tears since dropping this album. Total surprise here, though, Snackers, because, according to PFWTM, not a single leak. Taylor keeps tight chips. That is impressive because Taylor says she was standing on the edge of Folklorian Woods traveled further into the forest of music. Let that sink in. We're expecting the third album in the trilogy to be dropped before her to meet We hope so because in the last five months, she crafted 15 tracks and two bonus tracks for your listening pleasure.

Meanwhile, Zono still can't connect my Bluetooth. Jack Taco Bell cut the seven-layer burrito from its menu forever. And TikTok couldn't even sell itself once. Not even once. 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 about the hearing food is 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.

Rob of her financial, LLC, member FINRA slash SIPC. For our first story, one week after the UK started vaccinating its population, the U.S. is expected to start vaccinations this week. We're talking this week. So we're looking at who's making money off this vaccine. Yeah, but before, honestly, Snackers, before we just, jump into like the pharmaceutical companies making the money here. We got to pay some tribute to the delivery guy. Jack, what is this? Like, don't kill the messenger situation? We're going to thrill the messenger.

We're going to thrill the messenger. This all goes back to Thursday when Pfizer's vaccine was recommended for FDA approval, which is basically the final step here. Here's the thing about Pfizer's vaccine. It is extremely needed. Yeah, it is. It requires a cold chain to carefully transport the vaccine from factory to like your local pharmacy. Well, you'll get it. Literally from the factory to going into your body, you got to keep this thing at negative 94 degrees Fahrenheit. It's basically absolute zero. We're rounding down quite a bit, but we're going to call it absolute zero. So to handle that big challenge, FedEx and UPS have put aside their differences to tackle the COVID crisis and take this thing on. They've decided to split the country in two. FedEx handles

the west of the United States. UPS handles the east of the United States. Unclear where the divide is on this thing. I mean, would you go with the Mississippi River Jack? What do you think of it? Let's assume it's the gateway arc in St. Louis. And so they put up these dry ice making machines and mega-freezers between the two of them. It basically looks like a White Walker convention. Because they both have to play the coldest, most sophisticated game of telephone ever. So that's who's doing the delivery. But then if we step back a bit, we've got to talk about who's actually making these vaccines.

Morgan Stanley expects that Pfizer and Medana, the two companies actually making these vaccines, will generate $32 billion in revenue for the COVID vaccine just next year. That's right. Just a couple companies are going to pull in two lifts worth of vaccine money from this. Now, Pfizer, they have to split the revenue for their vaccine with BionTech, which is their German science partner. And basically, you're both getting credit for doing the homework. Both names go on the presentation. That means $10 billion for Pfizer next year for the COVID vaccine, which is about 20% of total revenue they made last year. So Pfizer's bringing in $10 billion next year on this vaccine, and then they're expected to bring in another $9 billion next year and the following. as the rest of the world gets vaccinated too.

But here's what fascinated Jack and I, despite all those billions of dollars coming from one medication, COVID has actually not been good for Pfizer. All of the work that Pfizer's top scientists have put into this COVID vaccine, that is a lot of time they're not spending on other blockbuster drugs they were hoping to make.

So all that revenue Jack and I was chatting about, that's actually not as much growth as you would think for a company like Pfizer. Pretty sure an econ professor would call this opportunity cost. Oh, and get this. Snackers, the price that Pfizer is actually going to charge, this is actually kind of awesome. The price they're going to charge, it has to be humane. They have to have morals about this thing. Right. They love charging like $6,000 for a pill with every other drug, but this one, that'd be a

pretty bad look. And that's why when you look at Pfizer stock and you're thinking they're going to make all this money from the vaccine, shares are only up 12% this year. That is worse than the average stock in the S&P 500. Now that's Pfizer, a big old pharmaceutical company. What about our buddies over at Moderna, a smaller, younger, nimbler pharmaceutical company. Moderna is expected to make $13 billion on their vaccine in 2021, which is infinity times more than they made last year. And the reason we can drop the eye word on that thing is because this is their first product. This is impressively their first product. So their stock is way up this year because this is their first product.

So Jack, what's the takeaway for our buddies over at Moderna and Pfizer? There is one benefit. The whole pharmaceutical industry will get out of this. and that is public goodwill. All right, so Jack and I were thinking about it. The biggest threat to big pharmaceutical profits right now, it's simply the United States of Congress. Unlike in other developed countries,

in the U.S., there's nearly no limit to what pharma companies can charge us for medications. Now, technically, Congress actually could change that, but they haven't. They haven't done that yet. Saving the world from COVID-19 is a rare positive storyline for the pharma industry. And it's the kind of goodwill story

that could actually lower regulatory risk on all of big pharma. For our second story, Restoration Hardware stock is doing the opposite of every single physical store out there right now. Well, RH's CEO calls his competitors a bunch of sheep. It's true. Actually, he has a bunch of fantastic quotes in here. Now, Snackers, straight up numbers. Revenues jump 31% at Restoration Hardware. $40 million in profit. Their stock has quintupled. It's up 5x since March. They're not just enjoying some serious high-end house hype.

They're enjoying extra house hype. Honestly, Restoration Hardware is like the air maze for your casa. If you browse the clearance section of RestorationHardware.com, you'll probably find a $970 faucet handle. And if you're doing that, you're probably going through this mental math right here. Do I contribute to the Kids College Fund? Or am I buying the Lagarno Goosneck Brass Fawcett for a cool $970? How is it $970 for two metal handles?

Oh, we didn't say it was two handles. You're going to have to get two, Mr. Graver. Restoration Hardware's brass is smelted by elves. Oh, you'd like a spout too. Very nice. Snackers, whenever Restoration Hardware announces earnings, honestly, Jack and I have a blast because we dive into this thing,

and it's not about the numbers. There is poetry written by the CEO, Gary Friedman, throughout this thing. For instance, there are those with taste and no scale, and those with scale and no taste. Here's another gem from our friend, Gary. This is a time to be defined by our vision, not by a virus.

It's like Gettysburg Address style. These were both included in the earnings report, which was like submitted to the Securities and Exchange Commission. We're talking basically a modern age Robert Frost running restoration hardware. But then he gave us a warning. Yes, he did. A little more egg-round poish. Yeah, this was beware of those using simplified assumptions.

He believes that RH's competitors are moving like herds of sheep towards e-commerce. He even said their stores are rotting because, quote-unquote, even plants will die in a department store. That's why he's quadrupling down on our favorite, retail's not dead, bad retail's dead thesis. Yeah, get this, Snackers. Turns out restoration hardware is going to open a. up like four new palatial stores in Dallas, San Francisco, London, and Paris. And Jack, why are they doing this? The audacious goal of activating all of our customer's senses with gardens and wine. We've said it before. Do your first date. Restoration hardware, rooftop, meatpacking.

Speaking of New York City, they're opening an R.H. Hotel because, and I quote, if you can make it there, you'll make it anywhere. And this is why we love Gary Friedman, because then he went on to say, it's up to you, New York, New York. Again, all in this SEC filing. But maybe the most poetic line, if you find yourself feeling isolated and your world one-dimensional, staring into a Zoom screen all day,

we know a place. Downtown. So Jack, what's the takeaway for our buddies cozily up in restoration hardware? RHS thesis is that we're about to have another roaring 20s. Okay, so Jack and I have seen

these signs of revenge spending and we've been telling you about them. You know, you splurge on a plasma screen because you haven't gone on vacation in months and you haven't dined out in weeks. But here's the thing about that phenomenon. We've actually seen it happen on a grander scale before because we had the same situation

exactly 100 years ago. We've all heard Anthony Fauci talk about the 1918 Spanish influenza and World War II. Right after those ended, the economy in the United States exploded leading to the roaring 20s. And what drove that economic boom was a pent-up demand for socializing, parting and splurging after all that war and influenza.

People wanted to let them. loose. And restoration hardware thinks they want to let loose again. So they're basically expecting the roaring 20s, but in the 21st century, because of a fundamental human need. We'll let Gary do the talking again. We are physical and social creatures. It's why we still go to concerts and ballparks. Future bucket lists won't be filled with lonely online activities with or without virtual reality. The post-pandemic need for physical and social interaction will be greater than ever. Wow. Community College dropout. Gary Friedman is the F. Scott Fitzger of $8,000 sofas

and $970 faucet handles. For our third and final story, Disney just announced a whole bunch of stuff, so the stock jumped 14% to a record high. We're most excited about Disney's entirely new form of media. We're calling it the Schmovie. We're calling it the Schmovie. Now, this all went down at their Investor Day last week,

where they whipped out like this incredibly powerful number, Jack and I had to sit up, stand down, and stand back up again. 86 million families have signed up for Disney Plus. That's right. million Disney Plusers are out there in the United States. And if you include ESPN and Hulu, two other networks Disney owns, that's 137 million streaming subscribers. Let's sprinkle a little context on this thing. That means that is two-thirds of a Netflix. They have two-thirds as many subscribers as Netflix

does. And Disney got all those subscribers in just over a year. Yeah, not bad. Netflix has been working on this since 2007. Oh, by the way, Disney Plus side note, they're upping the prices of Disney Plus by a in March to $799. Still a bargain. Hulu side note, they're getting the Kardashians for an exclusive show next year. So those are the numbers, but Jack and I have noticed a trend going on at Disney, and that's that movies are becoming shows, and shows are becoming movies. They announced a whole new type of content called schmovies. That's right, they're called shm movies.

Now, they didn't call them schmovies. Jack and I are calling them shmovies. We call them schmovies because they're like movies, but with built-in bathroom and snacks breaks. Yeah, instead of a three-hour flick, you're getting a 10-episode. series of what used to be a flick. They're combining shows with movies, aka Schmovies, at an insane speed next year. There's going to be an original Schmovie premiere on Disney Plus every single week. Yeah, you want to hear some specifics on this? They're going to have 10 new Marvel series, 10 new Star Wars series, 15 Pixar animation and live action films over the next few years, all going

at Disney Plus. You're thinking, there's only one Darth Vader. How are they going to do that? They're going to do what Disney does best. They're going to do prequels within the sequels after the postquels. Wars, Episode 2.3, Subsection A. Bulletpoint 2. Oh, yeah, that one, it covers the rebellion before the rebellion, but after that rebellion. C3PL. The Software Update. These are stories being told in series, not movies, aka Schmovies. Shmovies, the brunch of media. Oh, and by the way, they're not going to premiere new movies on Disney Plus along with theaters like HBO Maxis. That's a bummer. So, Jack, what's the takeaway for our buddies over at Disney? Wall Street's decided to reclassify Disney

from media company to tech company. So Jack and I are looking at Disney stock, and we noticed it's kind of been recast, and that's because of Disney's earnings multiples. If you compare Disney's stock price to the profits that Disney makes, that gives you a sense of what Wall Street thinks Disney is worth. And since most media companies have similar business models,

they have similar price to earnings ratios like Jack just described. If you look at Comcast, Discovery Networks, AT&T, and Viacom, for media companies, they all have similar PE ratios between, 10 and 20. But when we look at like the future earnings for Disney, its stock trades at a multiple, a price to earnings multiple of over 60. That's on par with Netflix, which is definitely a tech streaming company. All right. So Jack and I're looking at the situation. Basically, Wall Street is treating Disney stock like it's a tech streaming stock right now, which means Wall Street expects

Disney profits to grow like a tech company's profits grow, which is really fast. So Wall Street's ignoring the theme parks, the cable channels, the merchandise, all those other businesses that are part of Disney. Disney stock is defined on Wall Street by only its techiest part, the streaming networks. And that's why Disney stock is at a record high, even if its profits aren't. Jack, can you whip up the takeaways for us to start the weekend?

We are all incredibly hopeful for the vaccine to start doing its work. Yeah, we're thankful for the pharma companies, even though they may not even profit much from this. For a second story, Restoration Hardware has an audacious belief. Yeah, not being a sheep. It's betting on the roaring 20s becoming a thing again. For our third and final story, Disney is transforming itself into a direct-to-consumer tech company.

Oh, Jack, you know what that means. A new schmovie. A new shmovey is coming to Disney every single week. Now, time for our snack fact of the day. This one sent in by our buddies Jake and Susie Westerman, both Brown Bears, hailing from lovely Long Island and Ohio. Now, Brown University is based in Rhode Island, a state with an H in it that I'm never sure whether we're supposed to pronounce or not.

It gets confusing, and I played lacrosse with Jake over at Brown, so we spent a lot of time College Hill in this said state of Rhode Island. Now, Rhode Island is long known as the state with the longest official name, despite being the smallest of states. It is technically the state of Rhode Island and Providence Plantations. Well, this year, they voted to strike the and Providence Plantations part over concern of using the term plantations. Now, plantation in British, apparently, is the word for colony. So that's why they called Rhode Island Plantation, but we associate it today with slavery. So Rhode Island, still the smallest state in the union, but no longer the longest name in the union. Small estate, average length name.

Snackers, you look fantastic to start the week. Remember to ask all your friends, H-Y-H-Y-S-D. Have you had your snacks daily? It's the best way we grow. If you know, you know, and you guys know. Before we go, happy 12th belated birthday to Joanna from Charleston, South Carolina. And happy birthday to Tianju-Ju-She in Chean, China. Remember, 32 is the new 23.

And happy birthday to Mina Labani in Vancouver, Canada, and John Chris in Redondo Beach, California, and George Wynn in the Bay Area of California, and Taylor turning 31 in Nashville, Tennessee, and Darren Coleman in Los Angeles, and Musk and Jane in Montgomery, New Jersey, and Josie Warren in Glendale, California, and Julian Adams in Arlington, Virginia,

and Jason Ferris in Nashville, Tennessee, and Jason Sears in Jacksonville, Florida. And happy anniversary to Angie and Alfred in Tampa, Florida. Also, congrats to Professor Duke's Strategic Management Class at Ithaca College just finished the final exam. And Paging Dr. Highol, congratulations, Tyler, for passing your PhD thesis. And big congrats to the Arizona State University MBA team of Mike, Callie, Rachel, Sean, and John, all graduating. Great team.

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.