The Best One Yet - “The tech stock white whale” — Softbank’s big Nasdaq money. Nikola surges 40% on GM investment. Boeing’s business class dreams

Episode Date: September 9, 2020

Tesla-challenger Nikola just saw its stock jump 40% because it’s marrying an older, wealthier life partner: GM. Just a year after jacking up private tech valuations, turns out Softbank is doing the same thing now to publicly-traded tech stocks. And Boeing has itself a cancelation problem because business class’ future is uncertain in the age of Zoom.$NKLA $GM $SFTBY $BAWant a shoutout on the pod? We got the form for Snackers to fill out right here: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 Wednesday, September 9th. Pleasure to be back with you, Nick. Nine's my favorite number. Jack, you're looking fantastic stocks. Tech Stock's not feeling the same vibes as us right now. Not so fantastic, but we're still bringing the best one yet. TBOI, Jack, can you lay up the first story for us over there? Nicola is the electric car company that's never sold an electric car. It just enjoyed a 40% stock surge. Name throws me off every time because General Motors is paying Nicola to make itself feel cool. We've all been there. Have we all been there? Second story. Remember when SoftBank jacked up WeWorks valuation before it fell apart into oblivion. Jack, I thought you never asked.

Turns out the Japanese tech investor may be doing the same thing to tech stocks right now. For our third and final story, Boeing shares fell another 5% because another flaw in another one of its plane models. Only our frequent flyer platinum status business plus travelers, please approach the top of the plane and hear this story. You're the only ones who can save Boeing. But before we jump into all that good stuff, Snackers, we've heard a lot from the permanent work from homers. Jack Dorsey is the top work from home evangelist, letting Twitter and square employees never come back to the office again, ever, forever.

If you try to open that front door, he will troll you. Mark Zuckerberg, of course, sucked that idea, and he plans to have 50% of Facebookers coding from their couch long term. But Jack and I noticed a funny thing yesterday. Turns out the biggest proponent of WFW, Work From Work, is Netflix's Reed Hastings. Yeah, this guy just called Work from Home, quote unquote, pure negative in an interview. Which is ironic because Netflix has a 60% stock game this year because of Work From Home where everyone's like side hustling their conference call with Netflix.

Yeah, we're hoping it's like wife, kids and dog, which by the way, French bulldog named Streamer aren't listening or taking this personally. Yeah, they're all like, uh, Reed, I thought we've had a really nice. six months coming together. Reed, we finally see you. Now, Reed says that there's need to interact in person at a company to debate ideas and make creativity happen. That's how things actually get produced. No commuting is nice, Reed says, but you just got kicked out of your closet conference room by your significant other, and that's no way to be productive. And it booked from three to four, but we can talk about it later. So when does Reed want flixers back in the office? He actually said,

and I quote, I want Netflix employees back 12 hours after the vaccine is approved. Maybe exaggerating. He's kind of a jokester. He likes common. 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. It's snacks 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. 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, Detroit-based General Motors just snagged 11% of cool kid Nicola.

There's two companies in this partnership, but one looks a little better than the other based on their stocks. It does, it looks a little noticeably better. Now, Snackers, Nikola, their marketing team over there, they want to be known as the yin to Tesla's yang, the fang to a shui. I don't know if they are that, but we're talking about it on this pod, which means they've won. Nothing better than when snacks make something a self-fulfilling prophecy jack. So Tuesday, we get this press release issued by both companies at the same exact time, like 6.30 a.m. Eastern Time. Didn't see this coming. It says General Motors is buying 11% of Nicola's stock.

Lovely couple, Jack. Let's talk about the power couple here, who we see in. Beautifully mature a company, 111 years old, General Motors based out of Detroit. right Michigan, best known for their Chevy Silverado and their Chevrolet Corvette. They got a lot of money. On the other hand, you got Nicola, a little bit younger, six-year-old zero emissions car company, still hasn't sold its first car. Six years old. That's it. Partnering with a company that's 111 years old. We're getting Catherine Zeta-Jones marrying Michael Douglas kind of vibes. Now, GM's growth and the excitement for its stock have both stalled in recent years. Now, since Tesla is not available,

GM's got to hook up with Nicola. It's the next closest thing. This is a low-growth company that really needs a cool, high-growth investment. So it's going with Nicola. But unlike most human relationships, there seems to be one partner getting a better side in this deal. Wall Street told us loudly and clearly yesterday who is winning this deal and it's Nicola. Honestly, it's kind of awkward. Both of these companies have publicly traded stocks and GMs, it jumped a respectable 9% yesterday. All right, GM is investing $2 billion to buy those 11% of Nicola's shares that are outstanding. And as the part owner, General Motors now has the honor, the privilege of helping Nicola scale. All right, that sounds nice. GM, 11% stock growth.

Nicola 41% stock growth yesterday. 41%. Because now Nicola has a family connection in the brutal automotive industry. And with this connection, it crucially gets access to General Motors, a sense. assembly lines and batteries and all that good stuff that would have taken a long time to get. The Badger is the name of Nicola's first pickup truck. It's an electric pickup truck. It's not on the market yet. Aggressive name. But it is now a much more real thing since it's going to have GM's health. Oh yeah. Insane stat here. Snackers, Jack and I noticed, Nicola has never sold a car and is worth

$19 billion. That's how excited investors are for this Honey Badger. They're going to launch next year, the Electric Honey Badger. Meanwhile, General Motors has sold hundreds of millions of cars. and is worth barely double what Nicola's worth. How much must the GM executives resent that they are barely worth double a company that has never sold a car before? Jack, I'd appreciate it a rhetorical question because it's a great transition to what's the takeaway for our buddies at Nickel NGM. The fastest way to scale a car startup, let someone else scale for you. Snackers, designing a cool car that is hard. Actually manufacturing a car at scale, way harder. Anyone can

design this thing these days. It's the production that's really the most important part of a new car. I know why we make reservations, Nick. I don't think you do. You can take the reservation, but can you hold the reservation? Now, to give an example of how another car startup scaled, let's look at Tesla. It was created

in the year 2003. Finally had a factory in 2010. Finally had a battery factory in 2016. But it wasn't until 2019 that Tesla was actually producing a respectable 100,000 cars a quarter. That's 16 years later for Tesla. So instead of building their own assembly lines

and their own battery factories, Nicola is using GMs. It took Tesla 16 years to produce that scale by doing it by themselves. Nicola, it looks like, can do it in half that time with General Motors' help. And all Nicola had to do

was give up 11% of its stock to GM. For our second story, tech stocks have fallen really big in the last three days. And one tech whale could be partly to blame. A white whale. Jack, what's Japanese for Call Me Ishmael?

We're going with SoftBank on this one. SoftBank is a Japanese tech company whose stock fell 7% yesterday because it's doing too much. Do less SoftBank. Back in 2000 Snackers, a leader of SoftBank named Masayoshi Son invested a casual $20 million

in a little startup called Alibaba. That little startup ate up all the competition and became the Amazon of China. too bad. So that initial 20 million investment became worth $100 billion. With a B, not too shabby. Now, that investing success got to Masayoshi's head a little bit. Yeah, that did. So Snackers, if you want to see what that psychologically looks like, go to the SoftBank website and you can check out the company's 300-year plan. This company has a 300-year plan. Yeah, not two or five or six months on this thing. Where do I see myself in 300 years? Well, I think my brain will be run

by a computer. Best interview question ever. And that's exactly what they would be saying over at SoftBank, where they also said pretty soon will be cohabitating with quote unquote kind intelligent robots, which sound nice. Yeah. The SoftBank website says in 300 years, humans will be living 200 years long. Yeah, and they have a chart that seems to try to explain this. So Masayoshi is Willy Wonka, but instead of being obsessed with chocolate, he's obsessed with like techie, venturing futuristic investments. Jack, who's the oompa in this scenario? I don't know, man. If you have to ask, you're the Ebola. SoftBank Snackers is much more known recently for creating a massive bubble in the private stock market, which recently popped.

Snackers, let's look back on the SoftBank portfolio. Case in point, they were a major investor in Uber to get them to an $120 billion record valuation. But that bubble deflated quite a bit because Uber IPOed at less than half that value. So then SoftBank jacked up WeWorks valuation. to a record $47 billion. They were the big money behind Adam Newman, and now we work is worth less than a lift. In fact, Jack and I have heard a wild story where a three-year-old startup went to Masayoshi-San and SoftBank

pitching for a $200 million investment in his company. He said, Mr. Sahn, may I please have $200 million to scale my company? Masayoshi-San said, no, you may have $2 billion, though, which was awkward and probably a bubble before a bubble happened. SoftBank's big money investments blew up the prices of private company stock the past several years. Creating a bubble, which then ended up popping. So, Jack, what's the takeaway for our buddies over at SoftBank? SoftBank could be creating a bubble in public stock markets right now.

Yeah, right now, Snackers, key reason why tech stocks been down big could be SoftBank. We learned on Friday that SoftBank has been investing huge money in tech stocks this year. Yeah, SoftBank's huge moves have resulted in $50 billion worth of buying of public. stocks, which have driven NASDAQ to a record high. We've all been pumped about this NASDAQ record high, but now that we know SoftBank was partly responsible for those prices driving so high, kind of makes investors wonder if this is another SoftBank cause bubble too. I thought my stock portfolio was flying high because of the businesses like crushing it during COVID. And you're Netflixing, you're Amazon and you're appling things during COVID, so they're thriving.

But is my Netflix stock actually up because of an eccentric Japanese billionaire who has a reputation for creating bubbles which tragically pop, which may have then caused people to sell while they're ahead of this bubble. That concern of Masayoshi-san being involved in the story could be the reason the NASDAQ stock index is down 10% in the past week. Good news, though, you're going to live for another 180 more years. For our third and final story, Boeing 737 Max is still grounded, but that is not why the stock just plummeted 6%. The real problem is business class. The only thing that can save the airline and airplane industry. Snackers, early takeaway here. Making airplanes is really hard, but making a profit in a duopoly is not.

Boeing has enjoyed decades of consistent, huge profits because it's one of just two global airplane makers. Yeah, the other is it's like former roommate and buddy over in Europe, Airbus based in Germany and France. It's a Franco-German company, which just rolls off the tongue. Now, Boeing cruised into 2019 at the top of its altitude with a $245 billion juicy valuation. Stock was at $440 enjoying the first class lifestyle, and now it's at $160. It's down 52% the stock just in 2020 next. But then Jack and I noticed this wild thing. Boeing stock fell another 6% on Tuesday for reasons completely Boeing's fault. Right. Remember, Snackers, Boeing's main customer are the airlines, and the airlines are

teetering on the edge of bankruptcy because of COVID-19. Yeah, not Boeing's fault. Classic, you know, hugging Matt Damon. It's not Boeing's fault that it's not getting any new orders because the customers are almost dying. But then on Tuesday, we learned about a entirely new Boeing F-Up. Boeing just announced the pausing of delivery of their 787 Dreamliner airplane, which Nick and I flew in together wants to go to London. It was charming. It's a little bit quieter and less vibrate even other airplanes. We probably wouldn't have flown it if we had known about this flaw that the new manufacturing involving gaps in the horizontal stabilizer, which is the small wing in the aircraft tail, I assume is near the chassis. A manufacturing flaw in the aircraft tail's small wing, Nick?

Brutal. That sounds like something you should ground planes for. Oh, and by the way, a second little key here. The 737 Max plane that Boeing also makes has seen cancellations piling up. 737 max. We've mentioned it a bunch of times. It's the plane that's been grounded, since March of last year because two planes crashed and hundreds of people died. Yeah, 805 orders have been canceled for Boeing's planes in just the first half of this year. They got 100 brand spanking new 737 max airplanes just sitting in the parking lot at Boeing waiting for a forever home and no one is coming to take that. And no one's validating this thing. So Jack, what's the takeaway for our buddies over at Boeing? Will business travel ever come back? Snackers, business class is only like 12% of airline

passengers, but those passengers are twice as profitable as coach passengers. Think about the sales hierarchy snackers. If you send a cold email, Nick, that is the lowest sales pitch you could make. And if you're making a phone call, that's like a step above, but you don't really care that much about the customer. The in-person visit, though, the one where you like book a car with Hertz, you fly there same day, you fly back same day, that is the cream of the crop sales pitch where you be always closing. You're expensing that, sitting in business class, and airlines thrive on it that in-person sales pitch. And those in-person sales pitches haven't been happening because Zoom has been our entire lives for six months now.

So the big question that airlines are asking, which then Boeing is asking, is when will in-person sales trips actually resume? If they resume, Boeing might be able to sell new airplanes to airlines again. But if they don't, airlines will struggle, make do with the old plans they have, and just try not to go bankrupt. When your customers are just trying not to go bankrupt, If you're Boeing, that's not a good position to be in. Jack, can you whip up the takeaways for us over there? General Motors wants a piece of a spicy hot electric car company really bad. And once Nicholas so badly, it's paying up $2 billion and will even manufacture all of

Nicholas cars. For our second story, SoftBank has made huge investments in U.S. tech stocks and could be partly behind the recent rise in tech stocks. And ironically, SoftBank may also be behind this week's fall in tech stocks. True. for our third and final story. Boeing really needs airlines to buy some new Boeing jet liners right about now. And airlines really need business travelers to just come back to first class already. Now, time for our snack fact today. This one super straightforward from Samir in California tweeted in.

There are more plastic flamingos in the world than there are real live living flamingos in the world. 950,000 real flamingos, millions of plastic ones. Now, flamingos have fantastic balance. They can stand on one leg. I think yoga should rename tree pose, flamingo pose. Jack, you're really going rogue on this snack fact. Now, Snackers, before we let you go, we got to say congrats to the new snacker,

Mina Simco, just born in Ontario, to a pair of parent snackers. And congrats to Matt Bosch and Ellen Moore for getting engaged in our nation's capital. The ring was in the crab cakes. and Samir and Nidi who are celebrating 500 days of dating, a.k.a. 500 days of snacking together. And happy birthday to Sabo Rodriguez, turning 40 in Miami, Florida. Happy birthday to Kathune Ramnath from Dallas, Texas.

And Tyler Wyman in Idaho Falls, Idaho. And Alex Mansebo from Boston, Mass. And Betty G. in lovely San Francisco, California. And Islam John in Brooklyn, New York. And Amanda Kong in Tustin, California. And Nikki, down in Houston, Texas. Snackers, before you again, go, remember to like yell to all your friends,

H-Y-H-Y-S-D. Have you had your snacks daily? This is the best way that we grow this podcast. You want to grow snacks? We'll see it tomorrow. If you know, you know. This is Jack. I own stock of Amazon,

Nick own stock of Square and Alibaba. 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.