The Best One Yet - 💳 “The savviest credit carder” — Wells Fargo’s rent card craziness. The stock market’s AI Mafia. DiGiorno’s “Chaos Pizza”.

Episode Date: June 24, 2024

How Savvy Millennials are causing Wells Fargo to lose $10 million per month on a rent-paying credit card.How the “AI Mafia” of 6 stocks (led by Nvidia) is adding the stock market to the “Vibecession”.And DiGiorno is using what they call “Chaos” to retake their #1 status in frozen pizzas… because the war’s in the stores.Plus, the newest movie studio in Hollywood is… Starbucks Studios.$SBUX $WFC $SPYSubscribe to our Saturday Newsletter: tboypod.com/newsletter  Watch us on YouTubeSubmit Facts & Shoutouts Instagram, TikTok, LinkedIn (Nick) & LinkedIn (Jack)About Us: From the creators of Robinhood Snacks Daily, The Best One Yet (TBOY) is the daily pop-biz news show making today’s top stories your business. 20 minutes on the 3 business, economics, and finance stories you need, with fresh takes you can pretend you came up with — Pairs perfectly with your morning oatmeal ritual. Hosted by Jack Crivici-Kramer & Nick Martell. Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Monday. Welcome back June 24th. And today's pod is the best one yet. It's a T-boy. The top three pop business news stories you need to know today. But Jack, I got one question and one question for you only.

Did the suit fit? Okay. I wore the same suit at a wedding this weekend that I bought eight years ago and wore it a wedding eight years ago. Not too shabby. Did you go full Abercrombie in this thing or was it custom? Well, I haven't answered your question. question about whether it fit. Yet he's always round up.

But three stories for today's show. Fantastic stories. What do we got, Jack? For our first story, Wells Fargo launched a credit card that you can pay your rent with. It was so successful that it's become a failure. Because Wells Fargo underestimated the savvy millennial. For our second story, the U.S. economy has been split between two different stock markets. Everyone talks about the S&P 500, but we want to talk about the Russell 2000.

Which is way more revealing. And our third and final story. It's not delivery, it's Dejorno. Literally. Despite that universal pizza catchphrase, DeJorno just fell to number two in the frozen pizza market. So Dejorno is launching what they call the chaos strategy. Because the wars in the stores. The wars in the stores.

But Yeties, before we hit that wonderful mix of stories. Fantastic mix of stories to kick off the week with Love the Mix Jack. You've heard of MGM. Warner Brothers. Vasties, you've heard of Paramount, you've heard of Sony, and you've heard of Pixar. But the newest movie studio will make you spit out your coffee. Because the newest movie studio is Starbucks. Get this, Yeti.

Starbucks, the coffee chain just launched a Hollywood production company. We're talking Machiazza movies. We're talking latte love stories. We're talking half-calf rom-coms, baby. Yes, Kate Winslet, we're in. Starbucks issued a press release last week that says that their studios will focus on premium entertainment. Which has Jack and I asking, is this like a hallmark movie on a pumpkin spicy relationship? Probably, and it might also be a documentary about coffee bean farms down south.

Or Jack, what if Starbucks makes a period drama about decaf? Two Victorian lovers torn apart by a passion for caffeine. Okay, we would watch that. But in the meantime, Starbucks says that it's investing in movies. How do they put it exactly, Jack? To nurture the limitless possibilities of human connection. But we're guessing the real goal here is more profit-oriented than that. Nice try, PR team at Starbucks. Howie Schultz, he wants an Oscar. Either way, Yeti, Starbucks isn't the only company with a movie

studio these days. No, it isn't. Because Nike now has a movie studio. Louis Vuitton has a movie studio. And Mattel whips up toy movies like the Quentin Tarantino of toys, including Barbie. So, Yetis, what should be the first movie that Starbucks produces in Hollywood? Besties, that's what

we want to hear from you today. Drop a title in the comment section. Our shot? The Frappuccino Files. Hot Story. behind a cold drink. And if Timothy Shalame isn't lead barista, then the dude got snubbed again. Don't decaffeinate the drama. Jack, let's hit our three stories.

Fifteen years before this song, two boys from the Northeast met in the dorm. They had an idea that caused a cultural storm. It's the best one yet, but the best is a norm. I need to practice. 50% that's a fat tip. Tea Boy City on your at list. If you know, you know, because we're ready to go.

We can't wait no more, so just start the show. Start the show. First, a quick word from our sponsor. For our first story, Wells Fargo launched a credit card withbuilt that was so good, it was too good. More like Felswargo, because they're losing $10 million every month, and it's all because of savvy millennial credit card customers. Oh, yeties, you know what we're talking about. Every friend group has a points person, and you know who we're talking about. It's actually me.

I'm optimizing points for every financial. transaction using just the right credit card. You got that one buddy, not your buddy Timmy, who's like, Amex for travel, Sapphire for dinner. You better not buy those bananas unless you're getting 2% points cash back. And that one credit card friend, she's like the Alan Turing of credit cards because she's like constantly calculating the points per dollar ratio and then judging you when you don't. She's like Professor John Nash, like writing calculations on the mirror. You know what I mean? It's a beautiful mind. Yet these credit card companies, they offer you points and perks on your purchases to literally buy your loyalty. And then,

they're doing perks more than ever. So, Wells Fargo partnered with a startup called Built last year to launch a huge new credit card. And it was huge because this credit card would let you pay your rent. Yeties, if you rent, you know this already. Your landlord will not accept credit card payments for you to pay your rent because your landlord doesn't want to pay that 2 to 3% credit card fee. Even though your rent is the biggest expense in your life. To get around that, built the credit card startup will literally mail a check to your landlord on your behalf because you're the credit card holder. Now we've covered built before on the pod. They're a $3 billion startup that is booming because people want points and they want to build credit on rent, which is a huge chunk of your spending. And Wells

Fargo wanted in on that booming. So they launched a built and Wells Fargo co-branded credit card last year. And Jack, how did this brand new rent credit card work in its first year? It's extremely popular. They I got one million accounts in the first year. That rent card, it is the rent card. One million accounts. Wells Fargo is freaking out. Bill was excited. Everyone was having a good time with this brand new credit card until they checked the numbers.

Yeah. Yet is here's the wild problem. Apparently Wells Fargo miscalculated the credit card math. More precisely, they underestimated you, the millennial credit card customer. Because savvy millennials took advantage of the generous point. taking opportunity and they cashed in big time. Because rent is such a huge chunk of our monthly expenses, one couple managed to rack up 126,000 points just because of the rent payments. In fact, that one couple went viral because they used those points to buy three flights to Europe on

Virgin Airlines. Two of them were in business class on a new plane, and it didn't cost them a penny. Ipso facto, this new Wells Fargo credit card basically paid for their European vacation. And that's the problem here yet is because all those points are free to you, but they're not free to the credit card company. Wells Fargo has to pay for all those points that you redeem, and that gets costly. Now, Wells Fargo knows that points are costly, but they expected to make up for those points costs in other ways. According to Wall Street Journal reporting, Wells Fargo expected that 65% of your credit card spending would be on non-rent payments, like restaurant payments, groceries, whatever. But instead, users did the opposite. They pretty much just use the card to pay for their rent. According to Business Insider reporting,

Wells Fargo expected dozens of purchases on this card every month. They'd hoped that this card would become your go-to. But instead, users only use the card for the bare minimum five purchases a month. So Yeties, Wells Fargo got a million new credit card customers in record time, but those credit card customers were savvy and they were taken advantage of the points on the rent. And then they'd use other credit cards that offer better points for everything else they spent money on. Great for the customer, bad for Wells Fargo. So add it all up, Bessies, and Wells Fargo is losing, get this, 10 million bucks a month on this specific rent credit card. Because of savvy millennial customers. And now Wells Fargo is trying to get out of the deal, but they can't

for like another five years. It's called an early termination fee. Sorry, Wells Fargo. I'd like to speak to a representative, says Wells Fargo, to themselves. So what That's a takeaway for our buddies who are anyone with the credit card. Credit cards can lose you a lot of money, or they can make you some money. Yeties, if you carry a credit card balance month to month and you don't pay off the entire amount every month, then you pay interest. That's credit card debt. It's actually the worst kind of debt. It is.

Because right now you pay 30% interest on that credit card debt. And interest is how credit card companies make the most of their money. And that's exactly what Wells Fargo was hoping for. Fargo expected that 50% to 75% of your balance would not be paid off month to month so they could collect a lot of interest. But customers only left 15 to 25% of their balances on the card. So Wells Fargo miscalculated again. And that's actually the biggest reason that Wells Fargo is going to lose $120 million this year just on this one credit card. Wells Fargo's miscalculation was about the savviness of their millennial credit card customers. Instead of paying 30%

an interest, these customers are essentially collecting 2% interest from Wells Fargo. Instead of paying interest, Wells Fargo customers paid their balance off every month and they collected a whole bunch of points. There it is. There's the proof. Credit cards can lose you a lot of money. Or they can actually make you some money. For our second story, the S&P 500 has hit a record high 31 times this year. And it's all thanks to what we're calling the AI mafia. The AI mafia. It's a stock market of haves and have-nots. Either you own the AI mafia or you don't. But Jack, to kick off this story, let's go back one and a half years ago to a stock market far, far away, my friend. November 30th, 2022. Something happened that day that caused stock markets to soar. Open AI, unveil

chat GPT and AI has ruled the stock market ever since get these numbers yetties. Invidia is up 733% since that day 18 months ago. Google and Microsoft are up 81% each since that day 18 months ago. Meta's up 350% and Amazon is up 96%. Even Apple, which showed up late to the AI game out of nowhere last week, is up 45% since Chad GPT was born. November 30th, 2022. AI has been the only thing since then.

Sit down, stand up, and Sam Altman is probably sitting next year again. Now, yeah, these let's call those six companies, Nick and I just mentioned. Let's call them the AI mafia. Yeah, let's call them the AI mafia. They're like the sopranos of stocks. Because each of the six companies we just mentioned has gotten $1 trillion richer since ChachyPT was born. That is a lot agabagoole. Jack, could you whip up more of the numbers for us over there, please?

To put some context on one trillion dollars richer, until the year 2018, there'd never been a single company worth a trillion dollars. Yeah, until 2018, there was not one company passing the one trillion dollar valuation mark. But just six years later, we now have three companies worth three trillion dollars. And it's all because of AI. Now, yeties, as of last week, the most valuable company in the world is now in Vividia. Which makes the brand sell computer chips of AI. And the next five most valuable companies round out. the AI mafia. Microsoft, Apple, Amazon, Google, and Meta. Besties, those six companies are so big,

so big that they essentially are the stock market right now. So far in 2024, these six stocks are up 38% on average. They're hitting all-time highs every day like Michael Corleone and the family in Vegas before they had their downfall. There ain't no Fredo in this index right now, Jack. And the dominance of the AI mafia leads to an interesting case of owns and owns not in America. Do you own one of these six AI mafia stocks? Or do you not? That is the question. So Jack, what's the takeaway for all our buddies in the AI mafia? The vibe session now extends to the stock market. The vibe session. Yet is that is the term for how people feel that the economy is bad, even though the data shows that the economy is good. And we can now see that surprising paradox in the

stock market too. Because the S&P 500, that is the stock market scoreboard. It tracks 500 of the biggest American companies. And the S&P 500 has hit a record high 31 times so far in 2024. It's up 16% so far this year. But here's the catch. Almost all of that gain in the S&P 500 is thanks to those six AI mafia stocks. If you remove the AI mafia, then the stock market is actually flat or down so far this year. Jack and I have the perfect example of that. It's the Russell 2000, which tracks the top 2000 small publicly traded companies in America. And Jack, how's the Russell 2000 looking? They're not up 16% like the S&V500. They're up less than 1% so far this year. So if you own one or more of the six AI mafia stocks, you're feeling richer than ever. You're

at all-time highs, baby. But if you don't, you probably hate seeing all these stock market at record high headlines because your portfolio is probably flat. And that contrast, that is the vibe session. And it now extends to the stock market too. Now a quick word from our sponsor. For our third and final story, DeJourne is now a billion dollar pizza brand and it's all thanks to what its owner calls the chaos strategy. DeJorno is selling a Wolverine-flavored pizza right now because the war is in the store. wars in the stores. Now, yeah, it is, we should really kick off with a warning here. Because

one year ago, Jack and I informed you that as a country, we were approaching pizza parity. Wait, why is this a warning? I don't know. It sounded dramatic, so I kind of went with the check. What Nick's referring to is that frozen pizza sales are catching up with delivery pizza sales for the first time in American history. Because in this economy, are you going to spend $8 for a tombstone pizza or $20 plus tip for Domino's delivery? Don't please. I'll take two. Any day of the week. Yet he's adding to this surge in frozen pizza sales is the air friar surge as well. 60% of U.S. homes have airfriars, which have a button for frozen pizzas. It's driving both industries. But yeties, Jack and I got curious and we jumped in

T-boy style, and we noticed something fascinating about the frozen pizza market. Half of the U.S. Frozen Pizza Market is just two brands. Red Baron and DeJorno. It's not a doopoly, the Yetis, this is a doopoly. Red Baron and DeGiorno are neck and neck, selling $1.4 billion worth of frozen pizza every year to us Americans. But here's the interesting thing. DeJorno, which is owned by Food Giant Nestle, is actually the most recognized pizza brand in America. DeJorno has 84% brand awareness. 84% of us Americans have had the tops of our mouths burned at some point by eating the pizza too quick after it came out of the other. 84% of you were like, ah, ah, ha ha ha ha ha ha ha.

Yeah, pouring the drink in there, it's not going to help. And honestly, that 1996 TV commercial tagline is probably why 84% of you remember Dejorno. It's not delivery. It's Dejorno. And Jack, you know what Dejorno translates to an Italian, right? Delivery. Way too hot cheese. But yet he's, here's the problem facing Dejorno.

Red Baron, despite having less name recognition, recently overtook DeJourno in frozen pizza sales. And DeJorno just launched a new street. strategy to become number one again. It's a strategy that the company calls chaos. Ah, the chaos strategy. Yeti's DeJorno. His launching flavor is so flashy and so offensive that you stop in the aisle, call the police, and have to try this thing out. I think that's where your warning should have come, Nick. Yeah, that's where the warning should be, because these flavors, uh, they are inappropriate to say the least, Jack. DeJorno has a pizza in your frozen pizza aisle right now that's a chimichanga pizza. It tastes like a Tex-Mex burrito, but it's a...

pizza. They sell another frozen pizza that's both sweet and salty at the same time. Toppings are olives and pineapple on the same pie. And this one's actually kind of funny. They launched an all-onion cry pie. A pizza with so many onions, it's going to make your eyes watch. Like, these are the kind of flavors that you call your mom about because you're scared, and then she won't lay you back in the house when you try to bring them home. Now, the latest chaos from the Dejorno brand is four different flavors branded around the new Deadpool and Wolverine movie. A Ryan Reynolds flavor and a U. Jackman flavored frozen pizza pie. Yeah, that is chaos.

But Yeties, they're not just doing this for the PR. Jack and I have a different interpretation here. So Jack, what's the takeaway for our buddies over at DeJourna? The Wars in the Stores. The Wars in the Stores. Yeties, that is a quote from an executive at Sachi and Sachi, the advertising agency. Here's his point. No matter how much marketing you do,

the decision to buy is made in store by a human customer who's looking at a bunch of different options on the shelf. And that is why Dejorno has launched so many options, because each option demands more shelf space. Each option is like a different battalion in the war in the store. Exactly. Like, you think this Deadpool pizza is a stunt intended to drive headlines, but no, it's not. It's a store play to justify taking up more space in the frozen foods aisle. And that is why Dejorno is dished out Chimichanga, soup. superhero and all onion cry pies. Because then grocery stores will allocate DeJrano more and more shelf space.

It is a shock and awe campaign of merchandising by DeJurno. And that shelf is the real estate of retail. Because the wars in the stores. Jack, can you whip up the takeaways for us to kick off the week? Wells Fargo's rent credit card is losing the company big money because millennial customers are savier than Wells Fargo expected. Credit cards, they can lose you a lot of money or they can make you some money. For our second story, it's Nvidia and the five other members of the AI

Mafia. They are why the S&P 500 is up 16% so far this year. But if you remove those six stocks, then the market is flat. And that is the vibe session. And our third and final story is DeJarno. They're employing a chaos strategy to try to retake their position as number one in U.S. Frozen pizzas. If you're going to do it, you got to own it, Jack. It's de journo. You got to really roll that R in there, baby. I'm only Italian by marriage. We got the hand contact down. In the meantime, Yetis, DeJorno is doing that because the wars in the stores.

I actually think my tenure at the Olive Garden gets me some kind of honorary degree. We're definitely rounding up on that. But Yeties, this pod's not over yet. Here's what else you need to know today. First, Golden Goose, the luxury shoe company that we covered on this pod that pre-scuffs and dirties your shoes. They plan to IPO this month in Europe, but they just postponed to their IPO. Snap elections are happening this month in France, and that is causing big political turmoil. IPOs, they're like weddings.

CEOs want them happening on sunny days, not during political thunderstorms. And second, the co-founder of OpenAI seems unhappy with the direction the company is going. So, he founded an alternative company last week. It's called Safe Superintelligence. Elia Sutskever says that building Safe Superintelligence is the most important technical problem of our time. He wants safe superintelligence, SSI, to replace artificial intelligence. AI. And finally, the House of the Dragon, Season 2 premiere, earned 7.8 million viewers last Sunday night.

That's 22% below the 10 million viewers who watched season 1's premiere two years ago. But as time passes, more and more stream at their leisure over the course of a week, so you're not watching HBO just on Sunday night. So although the numbers fell 22%, they might actually have more viewers. can't tell. Sundays, they're for HBO. Kind of. Now, time for the best fact yet, this one whipped up by Jack and me because we're both two

big fans of Willie Mays. Major League Baseball played a game on Thursday night in the state of Alabama for the first time ever to honor the Negro leagues. It also honored Willie Mays, who was born in Alabama and played his first season for the Birmingham Black Barrens. Rick Woodfield

in Birmingham, Alabama, hosted black only players when those black players were not allowed to play in Major League Baseball. But last week, the 114-year-old stadium hosted the San Francisco Giants versus the St. Louis Cardinals in Major League Baseball.

And Willie Mays, who passed away last week, received a standing ovation in his honor before the game. Yeties, you are looking fantastic. The kickoff the week. And remember, Jack and I want to know from you. What should be the first movie made by Starbucks Studios?

I think it should be called Always Leave Room. All right, Jack. Whip the screenplay up for us. What do we got, man? I don't know, but I think it's about, like, maximizing the life you're given or something. It sounds like you need to spend a couple more weekends on this one, Jack. You asked for a title. You didn't ask for a screenplay, man.

That's a good point. How about the Decaf Diaries starring Ann Hathaway? Why Ann Hathaway? Oh, Princess Diaries. Yeah, yeah. She finds out she's the real heiress to a bean fortune. I'm pretty into this, yeah. Yeah, and he's hit us up at T-Boy pod.

Comment on Instagram. Go on YouTube and leave us a comment on Spotify. And Nick and I will see you tomorrow. Can't wait. And before we go, a happy golden birthday to Yeti Brook in O'Clair, Wisconsin, celebrate that win. And happy birthday to David Tritt in Scottsdale, Arizona. And Isaac Carrera is celebrating a birthday down in El Paso, Texas. Happy birthday to Michael Orlando, the operations manager in Portland, Nord.

And Yasmin is hiking through the Pacific Northwest to celebrate her birthday week. Enjoy the hike. She should be about halfway done. That long trail right now. I can see her from here. And Kendra and Jamies. have got a wedding anniversary in Pensacola, Florida with a whole lot of oysters. Happy anniversary to Daniel Calderon, whose nonprofit turns five right now,

teaching black and brown students entrepreneurship and innovation. And Mike and Kristen Green in Ackworth, Georgia have got a 10-year wedding anniversary. Not too shabby, guys. Thank you to Tammy Wankoff in Florida, who used a T-Boy reference in her article about gaming and leisure. And enjoy the campfires to Miranda, macadamia, and Spock. in Cordillane, Idaho. She's working at summer camp while listening to the pod as we speak. If you know, you know. And to anyone else celebrating something today, make it a T-boy, celebrate the wins. This is Jack. I own stock of Amazon and Disney. Nick owned stock of Nike

through his son's 529 account, and Nick and I both own stock of Apple and ETFs of the S&P 500. By the way, if you own mutual funds or ETFs to the S&P 500, you own some of the AI Mafia.