The Best One Yet - 🩲 “The Undies Economy” — Parade’s $200M underwear. Cable TV’s grandma fee. Rivian’s Indonesia problem.

Episode Date: August 15, 2022

Tech stocks are down, so Venture Capitalists are jumping into your underwear. Charter Communications is a case study in Cable TV’s strategy: For every Grandkid lost to cord-cutting, squeeze more from Grandma. And Rivian’s electric trucks lost nearly $2B in just 3 months, but its real problem is a certain mineral in Indonesia. $RIVN $TSLA $VSCO $CHTRFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn 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. Welcome back. It is Monday, August 15th. And today's pot is just the best one yet. It's a T-boy. It's the best one yet. T-B-O-Y.

Stocks have risen for four straight weeks, by the way. But Jack, while I was driving home from recording the pot in Vermont with you, I realized why every episode we did together last week was the best one yet. Why? It was the first ever farm-to-table podcast. Unprecedented, baby. It's full-up organic Vermont made straight from the cow, full dairy. That's true.

No GMI. Jack, what's the first story for this farm to table podcast? Tech stocks are down, so venture capital is shifting their money into your undies. Underwear startups, they're the new unicorns. Our second story is Rivian. Their electric pickup trucks are still deeply unprofitable. But Rivian's biggest issue lies within 17,000 islands in Southeast Asia. And our third and final story, Nick and I found the two most brazen feocrycies,

the very worst of feetail, its spectrum and Xfinity. For every grand kid at large kid, lost to streaming, they squeeze more cable out of grandma. But before we hit that wonderful mix. A perfect mix to whip up a week. Honestly, no one else is doing this mix, chance. We've heard about unused vacation days. Yeah, vacation days you forgot to use.

And we've heard about unlimited vacation days. Vacation days you're scared to use. But here's a new thing. Mandatory vacation days. Mandatory vacation. Vacation days you have to use. Vacation, your company's given you and there's no negotiation. You're taken it.

There's no say you must vacate. Yeties, according to the BBC, a lot of American companies are experimenting with a mandatory vacation policy. Jack, it feels surprising a company would do this. It feels aggressive a company would do this. I know. I'm giving you 20 days. I will not see you in this office or in our Google Docs for those 20 days or you're fired. We will kick you out.

Security. Security. If you don't book a month in the Maldives... Security, get this man a bathing suit. You're going to hear from H.R. No pinie caled. No paycheck. No cosomel.

Well, yes, cause for firing. And here's the key yetty's mandatory vacation. It removes all that guilt you feel every time you're on vacation. It forces you to relax and relax easy because it levels the playing field. Yeah, because everybody at the company, they got to do it too. Now, my German bank used to have this. They did this. I remember you said they did this to you.

They made me take all 20 of my vacation days. I had to. Jack's German bank, like literally lock the door and burn Jack's computer. You cannot come in here. Mr. von Gersdorf, my old manager, he called me into his. office with a stern look and said, what are you doing? I think he always had a stern look, though. He seems like a stern look guy.

You got five more days, and there's only 10 days left this year. A vitus in! But yet he's a fun thing about this very podcast. Jack and I feel like we pioneered this. We twice a year have a mandatory vacation too. Two weeks over the holidays, we pause this pod. And two weeks at the end of August, we pause this pod. So this is our last week with you before we hit our vacation vibes.

Because, funny thing, Jack mandated that I think, take vacation as his co-host. And Nick mandated that I take vacation. If so facto, we still got five more days left with you before we're on our mandatory vacation. This is a great last week. Let's hit our three-stop. Let's hit him.

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. 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.

Or our first story. Parade just hit a $200 million valuation for direct-to-consumer underwear. It's not just parades underwear. No. Every underwear startup seems to be having a unicorn moment. Honestly, it's wild out there, but first, we should sprinkle on some context. Jack, boxers are briefs. What do we got going on? I just go with whatever's clean. I only wear the boxers with animals on them. That's my one rule.

Bedsheets, too, right? It's Flamingle Fridays in case you're wondering. I wasn't. Thanks. Mondays or for the Bears. New York City-based parade. three years old, lounge wear to body suits, they just hit a $200 million valuation. They have 500,000 customers, and the branding hits like every millennial word you can think of.

They got everything. They got direct-to-consumer, recycled material, inclusive sizes. Now, this is women's wear, but they do have some gender-inclusive boxers too in case Nick wants to sub out the flamingos. But funny thing, Jack and I noticed while I was considering subbing out the flamingos. Jack, we've been covering a lot of underwear startups. Lately. First, it was skims, which quadrupled its valuation behind Kim Kardashian to $3.2 billion. And then the private equity firm Blackstone invested in Spanx, getting them to a $1.2 billion valuation. And then Rihanna's Savage by Fenty turned bad girl Rie re-re into billionaire re-writ. Yeties, Jack and I were curious all weekend. So we jumped in T-Boy's style and Crunch

Bays, a company that tracks this data, confirmed our theory. Venture Capital has poured half a billion dollars into underwear startups in the past year. Bottoms have become the top fashion investment. Underware overvalued. And here is what Jack and I find fascinating about this story. There actually are two reasons for the brawlet boom. And the first one is a secret. It is. It's literally a secret.

Actually, it fundamentally has to do with Victoria's season. Yeah, Victoria's secret. They failed to evolve past the 90s. Yeah, they were still pushing push-up bras while we're living now in like a brawlet world. And Victoria's decline accelerated on word that former. CEO Lex Wexner was buddies with disgraced Jeffrey Epstein. After that, those Victoria's Secret Angel fashion shows became like the quibby of the fashion world. They were toxic. They died out. But according to Women's Wear Daily,

Victoria's Secret's market share fell from 32% of all women's underwear to 19% in just the past five years. And that fall, that created some interesting opportunity. To fill in that multi-billion dollar sales void from Victoria's Secret, startups emerge. And you know what? You can't launch a new brand without a bit of startup capital. Victoria's Secrets Void led to a brawlett funding boom. It's just like that VC back boom we saw it with direct-to-consumer mattresses the last five years, Jack. Brolet, brawlet, brawlet. So Jack, what's the takeaway for all our buddies who are hopefully wearing underwear right now?

Thank God I'm wearing underwear today. There's a profound economics to your undies. Yeties, Jack and I were researching the story. And we realized that underwear is like the perfect business school case study in business perfection. It is the only clothing that we all wear. Not everyone is a hat person, but everyone's an undies person. Underwear, it's the only item you keep wearing even when styles change. Skinny jeans may be over, but undies are always in.

It is the only product you keep wearing even if it's broken. I got four holes in this pair of J. Crew boxers, but some reason they're still in my rotation. Jack, I just bought more J. Crew Boxers, and you know what? I'm still going to wear the broken ones. Undies have the biggest customer base, a never-ending demand, and underwear sales are recession-proof. Undies are having a unicorn moment because underwear has its own economy. For our second story, for the first time ever, Big Cable actually lost internet subscribers. But as grandkids pay less, grandparents are paying more.

Jack, I went intergenerational on this. Okay, first of all, Jack, the most consistent trend of our entire adult lives, what is it? The cord cut. The cord cut. It's just been with us since we were rooming with Timmy. Yet he's in the past 10 years. The percentage of U.S. households with cable TV has dropped by nearly half. Yeah, 10 years ago, 83% of us had cable TV. Today, 56% of us. And you'd think that the great cable cutting trend would have crushed the cable TV companies like Charter and Comcast. Can you throw another C consonant in there, by the way? Colossus of clout. Yeah, you would think that the cable cutting would crush those cable companies,

But it actually be wrong. Because those cable companies also do internet. They're known as internet service providers. Yeah, they're not just making the like 429 cable channels that your uncle spends six hours surfing. They do internet too. And that's why they've been fine through this whole cord cutting trend. And here's the key. Because when you cut the cord for cable, you end up needing more internet.

So, funny thing for the cable companies, it all balances out. It does. They lose your cable TV money, but they get. gain even more of your internet money. So Jack, they're like, yeah, I got less money in my left pocket, but I got more money in my right pocket. Until now. Oh, no. Because for the first time ever, those internet companies announced declines in the number of internet customers.

Okay, we just have to reiterate how shocking this is. Everyone needs more internet, and yet these internet companies are seeing fewer people want internet. Charter communications announced that last quarter, they lost 21,000. 21,000 internet households. Comcast announced they were flat with just the same 32 million households getting in. First time Chargers ever lost internet customers. First time Comcast hasn't gained internet customers. Now, Jack and I get cutting the cable cord.

Yeah, I don't need MTV2 and HGTV3 for my viewing options. But cutting the internet cord, we don't really get that one. What are you going off the grid, Thoreau? Wald and Pond. Jack, are you going like full Julia Roberts on me? You're going to eat, pray, love, and Bali? No, here's the situation. For the first time, there is competition for those internet companies.

Yeah, yeties, wireless companies are the new competition. It's strange, but wireless companies now want to do your home internet. Wireless companies like T-Mobile and Verizon, they're pushing home wireless as a new product. They're saying, hey, you can expand your phone plan. And you know what? Maybe we can cover your house with Wi-Fi too. We're a viable option. Maybe you have a two-phone plan for Verizon right now.

for a little bit more, you can extend service to the devices in your house, like your computer and your smart TV. Xfinity would be shocked, but they're still keeping you on hold. They have no idea this is happening. Yeah, they don't even know. They're about to get disrupted. Can I speak to a manager? Ah, in the meantime, Jack, what's the takeaway for all of us who are waiting on hold,

who may still have cable? For every lost grandkid, internet companies take more from grandma. Okay, full disclosure, yet he's not a shocker, but Jack and I cut the course. in 2014, we realized that paying $120 a month with fees and then more fees and then paying fee fees just like wasn't worth it. I'll be honest, I have missed live Sunday NFL ever since then, but I've been loving the Netflix,

the Disney Plus, the Amazon Prime, the Apple TV Plus, and I've been loving saving money and not paying fees. But besties, guess who is not cutting the cord? It's our grandparents. Our grandparents aren't cutting the cable cord because honestly, they're just not tech-safy enough. We love Nana, but Nana, loves her trusty all 14 inch long Xfinity remote with the 63 buttons and 26,000 channels.

At this point, internet companies know that older customers like Nana, they're probably never going to switch from cable to like a smart TV streaming. They know that there's no risk Nana's going to cut the cord now, so they're squeezing Nana with brand new fees. It's pretty brutal. But get this, Spectrum charges a broadcast TV fee. This is in the fine print of 21, $1 a month.

Oh, Jack, let's kick it up a notch. Xfinity, it's even worse. They're charging a $25 fee if you still have cable. That's a bigger fee than Netflix costs. The fine print, just one of the several fees, is more than the most expensive stream. And the reason that cable companies do this is because they can. Whoever's still on cable today, probably staying on cable forever. Honestly, it's like the cigarette companies.

The way we see it, for every grand kid lost to cord cutting, internet companies take more. from Grandma. Now a word about our sponsor, Robin Hood. A lot of Yetis don't realize how much prep work goes into this pod. We spend hours every morning jumping in T-boy style to earnings reports, CEO tweets, breaking news, headphones. Yeah, Jack and I are toggling tabs like you toggled IAM CONVs in 2004. Having eight tabs open can be stressful.

You don't need that, especially when invest. Robin Hood offers it all in one app. Whether you want to trade options, ETFs, or stocks through Robin Hood Financial, Or you want to buy some Bitcoin on Robin Hood crypto. You can do it all on the Robin Hood app. If you're not investing in Robin Hood yet, to get started, go to robin hood.com slash T-boy and choose your free stock. That's Robin Hood.com slash TBOY.

Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involved with us. By the way, this podcast is not owned or part of Robin Hood. We are not employees of Robin Hood. For our third and final story to kick off the week, Rivian. The electric truck company just said it's in production. Hell. But its real problem is over on the country of Indonesia.

All right, Yeti's Jackson, my favorite game this summer. It's got to be, Jack, you know what it is. You know what it's got to be. What is it? It's the Rivian freeze tag. Rivian freeze tag. You see Rivian in the wild? You send a pick to Nick.

You're it. Tag. Rivian, you're it. No tag backs. But yeties, here's the funny thing. Everyone keeps forgetting about Rivian. Rivian, the electric truck company. They were the biggest IPO of last year.

At one point, Rivian's market cap was more than Ford and general. motors combined. But today, Rivian is burning through its $15 billion watt of cash like a real housewife of Orange County. Yeah, they are. They lost $1.7 billion of cash last quarter. Oh, wait, Jack. That's after they lost $1.6 billion of cash the previous quarter. Their bank account balance is dropping fast. Attention founders. If you're thinking of starting a car company, that's not a cheap endeavor. No. To start a car company, it takes years to get to your first fact, and then more years to roll off your first chassis from the assembly line. But here's what Jack and I found fascinating about the story.

One stat reveals that Rivian isn't just making a car. Rivian is creating a cultural shift. Here's something impressive. Last quarter, the majority of Rivian truck orders were from people who have never owned a truck before. Okay, that is strange because most pickup truck owners, they're buying that pickup truck for the function. Most pickup truck owners have a flatbed as they're two. toolshed. Yeah, that Dodge Ram is a cargo hauler because it's meant to cargo haul. That's why the

number one car in America every year is the Ford F-150 pickup truck. Yeah, because when you buy a Ford F-150, you're investing in your job. But Rivian's doing something different. When you buy a Rivian, you're investing in your lifestyle, not your job. What Rivian's created is a lifestyle truck. Levi's did the same thing with jeans. Jeans used to be for like mine workers. Now they're for clubgoers. Well, Rivian's doing the same thing with trucks. And Jack, I'll be dead if one day you don't show up at a club and jeans driving a Rivian too. It's impressive. But here's a problem. Last quarter, Rivian only made 4,467 trucks. That's not many for a three-month period. Yeah, Rivian said it's losing money and it's making so few cars

because it's got some very unique supply chain issues. They got plenty of workers ready to build cars, but they don't have the raw material. Electric cars have some very particular needs. So, Jack, what's the takeaway for our buddies over at Rivian? The real electric car. car battle isn't at car dealerships or on TV commercials or even on the roads. The real EV battle is in Indonesia. Funny timing, besties, because just as Rivian announced its earnings, Tesla announced a brand new relationship. Tesla just signed a five-year, $5 billion deal with the country of Indonesia for one thing. Nickel. Yeah, nickel. Because Indonesia mines by far the most nickel in the world. Like a quarter of the world's nickel medal is fast.

on the Indonesian islands. And that's crucial for electric cars because the batteries are almost entirely nickel. 80% of an electric car's battery is the metal nickel. So marketing, operations, innovation, they're all going to play an important role in the battle for EVs. But raw materials are fundamental. That is what's holding Rivian back right now. Elon secured his nickel with that Indonesia deal. And that reveals the most important battleground in the electric vehicle wars. It's not marketing, it's not on the road performance even. It's in the minds and a lot of it is in Indonesia. Jack, can you whip up the takeaways for us and this farm to table podcast? Parade is the latest underwear firm to get big venture capital funding. Because underwear has its own extremely

profound economy. For our second story, cable companies are losing internet customers for the first time ever. But when a grandkid cuts the cord, they just take more from grandma. Our third and final story, Rivian wishes they could make more cars right now, but they just can't. Yeah, because the battle for electric vehicles is going to be one in the mines over in Indonesia. Now, time for the best fact yet. This one sent in by J.C. Kareem in lovely LaVern, California. In 1987, the airline, American Airlines, saved $40,000 with one tiny change to their business. One tiny change, literally a change that was no bigger than an inch.

American Airlines saved 40 grand by cutting $1,000. One olive from each of the salads that they serve people in first class. We repeat, they saved 40 grand across the company every year just by taking out one olive. No one even noticed. But American Airlines did because they spent 40 grand less on olives. Except for that one lady in 3B who like capes. Stewardess, there's something wrong with my Greek salad. So, you know, the olive garden was very strict with the number of olives we served in salads.

Oh, it was critical. If someone was eating alone, you get them two olives. but after that it's one more olive than the number of people at the table. That's the rule. And if you go over, you're fired. I'm just thinking about all the poor grandmothers paying more for cable and getting not enough olives at the olive garden. That's right. But those salads are refillable, unlimited.

And you thought the breadstick deal was good. Yeties, you look fantastic to kick off the week. And if you haven't yet, the best way you can grow this pod is to turn to someone and say H-Y-H-T-B-O-I. It means have you had the best. best one yet. If you know, you know. Nick and I, we'll see you tomorrow. Can't wait. Take those vacation days. And before we go, congrats to Yeti's Chad and Grant Berilski, who are celebrating their 45th and 4th birthdays. Talking to father and son. Father and son, same birthday, same favorite pod. And congrats to Chris and Bailey,

who got married in Portland on the 40th anniversary of Chris's parents getting married. Whoa! And happy birthday to Nathan McCann in Phoenix, Arizona. And Bestie, Stevenson. Sebastian, happy birthday in Sarasota, Florida. Happy 33rd to Ben Azizbacov in Los Angeles, California. And Keros Yolkin, turning 28 in Boulder, Colorado. And happy 24th to Van Chica in Los Angeles, California. And a happy birthday to Sebastian, Megan Sater, upstate in Rochester, New York.

And a happy independent state to the country of India. To all our Indian Yetis, congrats on 75 years of independence. And to anyone else, celebrating something today, make it a T-Buy. Celebrate the Wins. This is Jack. stock of Levi and Ford and Nick and I both own stock of Robin Hood. Now, a word about our sponsor, Robin Hood. A lot of you listen to our show while you're driving. Two hands on the wheel. Keep it 10 and 2. You might be cruising, Chris, no rush, stay in the right lane.

Or you might be doll lane from Duncan, dotting from lane to lane. And there are different drivers on the road. They're different investors too. Maybe you're cruising down the long-term lane with stock investing, or maybe you're a more advanced full speed trader. Well, the Robin Hood app helps put you in the driver's seat wherever you're at in your investing journey. If you're not investing on Robin Hood yet, to get started, go to robinood.com slash t-boy and choose your free stock. That's Robinhood.com slash T-B-O-Y. Limitations apply.

Robin Hood Financial LLC, member SIPC, all investments involve risk. By the way, this podcast is not owned by or part of Robin Hood, and we are not employees of Robin Hood. And a happy birthday to Sebastian, Megan Sater, Upstate in Rochester, New York. Upstate. Upstate. I was hoping you would say it. I was really hoping you would say it.

Is that why you've repeated it? I really did it. I was like, I'm wondering. I was hoping you would say it.