The Best One Yet - “Twitter goes Work-From-Home…Forever” — Uber Eats acquirin’ Grubhub. Vroom’s ecommerce car IPO. Twitter’s WFH megatrend.

Episode Date: May 13, 2020

New work update from Twitter: You don’t have to come back. Ever. Grubhub stock jumped over 30% on word Uber Eats wants to buy it, calling a Delivery Wars mafia truce. And Vroom is our “Unicorn of the Day” as it plans to IPO its online car sales (aka ecomm cars).Learn 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, May 13th. Nick, this is a snacks packed snacks daily. Snacks, we have so many snacks in this one. It's way better than what we did yesterday. Well, we got Twitter working from home. We got Uber with the acquisition fantasy. And we got used car sales online. We're doing spoilers to the intro. This is a TBOY. By the way, the NASDAQ, six-day wind streak ended. For our first story, Twitter just announced when it's calling everybody to come back into the office for work. Uh, never. There is a permanent work-from-home situation at Twitter. Uh, forever.

And we think permanent work from home, which Twitter just announced, could be the newest megatrend. What one company does in the Bay Area, by the way, every other company in the Bay Area tends to follow. For our second story, Uber is in talks to acquire Grubhug. We're talking the first truce in the old mafia delivery war, Snaggers. Now, if this holy matrimony really happens, beautiful, it'll create a food delivery app monster. Say goodbye to those 10 bucks off your first chicken parm promo codes. You're paying full price. Third and final story is the unicorn of the day.

Nick, you're shopping for pajamas from your couch on your phone. Jack, why not shop for a Subaru while you're at it? Online used vehicle seller, Vroom, plans to IPO next month. Remember, beware the used car sales bots. Bram-v-v-Rum. Now, before we jump into all that, Snackers, we don't want to get too meta here, but have you gone to www. Snacks.com?

Snacks.com. Full disclosure, that's not us. We're Snacks.com. Extra disclosure, we have nothing to do with Snacks.com, although we like it. Snacks.com is owned by Pepsi for some reason, and they're doing nothing with Snacks.com. They basically, Jack and I checked on this every day for years, just out of curiosity, nothing. Until this week, Pepsi just turned Snacks.com into its own direct-to-consumer food business. That's right. Snacks.com is now a literal, actual business thing.

Good timing, because online food sales have jumped 66% last week compared to the year before. Oh, and by the way, check the nutrition facts on your stomach, because one-third of your corona diet is basically what's inventing machines. Potato chips or corn chips, those are the only questions we're asking every day. So instead of going through Amazon or Walmart, Pepsi's like, hey, let's hope you order the Doritos, Life cereal, and Chewy bars straight from us at Snacks.com. It's biting out the middleman. So Jack and I were both intrigued, kind of insulted. We got left out of this decision, so we had some thoughts on it. The direct-to-consumer trend is your friend, so good work, Pepsi.

But we think there are better uses for something. snacks.com, Pepsi. Pepsi, give us a call. We're at Snacks.com. Let's hit our three stories. You're tuned into Snacks Daily. We spoke to the lawyers and we got to get something legal out the way.

The snacks about the hair ain't 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. 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. The financial LLC member FINRA slash SIPC. For our first story, Twitter will let its workers work from home. Forever. Forever, ever, forever, ever? Now, our big question with this huge announcement from Twitter, what happens to the budget for the office perks and the free food that you get if you go to Twitter HQ?

Robin Hood, looking at you. Jason, same question we have for Robin Hood right here. Now, what we noticed when we heard this wild, wild news yesterday is that Twitter tend to be the first mover on a lot of things. It was the first social media company to ban edits on your posts. Delete it or deal with it. No joke, I dealt with this on Sunday. Jack knows exactly what I'm talking about. There is no editing something if you fudged up a tweet.

Trust me, you delete it. It's also the first company to allow its CEO on camera with an enormous Gandalf-like beard. Thou shalt not edit. Finally, it's the first company way back in early March to order workers to work from home because of this new thing at the time, which was COVID-19. Telegram in, we got an update for you. Now it's the first big company to make work from home permanent. That's right.

Nobody is allowed back in the office at Twitter in San Francisco any time before September. After that, it's optional forever. Say goodbye to Cupcake birthdays. Company birthdays are going to stink. You need to like bake a cake in order to have a Zoom birthday party. Everyone has to bake a cake. And there's also always one person in every office in area who's doing all the cupcake ordering from like Susie Kakes. So Nick and I see this story and we're thinking, if other white collar companies where people pretty much work at their desk on their computer follow Twitter's lead for permanent work from home, it could reshape America.

That's why we whipped out the old whiteboard. Although these days, Jack and I have two different whiteboards going on. And we chatted about the winners with Twitter's decision. First, Twitter employees. Finally, you can live where you want instead of in the Bay Area only. The Golden Gate Bridge, it's beautiful, it's gorgeous. but the traffic is horrible. The rent also crushes souls. It really does. Second, Twitter is a winner from this because it gets to pay less rent. It's probably going to downsize their office base to a fraction of what it was before. Plus, they may end up benefiting from paying employees less because they don't need to finance like a $3,500 a month closet in the Mission District. No, instead they could hire somebody who lives in Kansas and finance their $800 a month like $300 trueplex. And that means they may be able to get more diverse workers, not just like 25-year-old Ivy Leaguers who are doing intermittent fast. down in the marina. Another potential winner is cities. San Francisco has an affordable housing problem.

This decision by Twitter could alleviate the housing crunch. And it also benefits not cities because this could slow the brain drain in rural and small town America. Kansas's finest could stay in Kansas now. But even though Twitter CEO Jack Dorsey got super excited about this, we got to point out this is not such a clear no-brainer to go full-on work from home full time. First of all, permanent work from home from a big organization like Twitter has never been tested. A lot of of Snackers are probably doing this right now. How is that going with reserving office space in the house with your significant office? It's not easy. Everybody turn off the Wi-Fi. Everybody disconnect. Second, Twitter hasn't tried launching any new products since they've been full-on work from home during

the corona economy. And full-on work from home may boost productivity because people don't need to commute, but it could potentially hurt creativity and collaboration among employees. And interestingly, this also could create some like disparity in inequality of opportunities for people who are working from home. and those who may have shown up to the office every now and that. Twitter said people can come to the office. They're just not required to. So who's more likely to get the promotion? The guy who comes in every day or the remote worker living in Kansas

who nobody's ever seen in real life. Carrie in Kansas, we forgot your birthday again. We'll get you next week. So Jack, what's the takeaway for our buddies over Twitter who are not in the office? We could be seeing the start of a megatrend. Trickle out economics. Trickle out economics.

Snacker, since the financial crisis, high-paying jobs have been really concentrated more and more in America's cities. But if other companies do what Twitter is doing, wealth and income and jobs could trickle out from the coastal cities to the rest of America. For Twitter, that means some key positions, some income and some opportunities could be trickling out from San Francisco to Kansas. Trickle out economics. For our second story, Grubhub stock just jumped 30% on where Uber is in talks to buy the company this month.

This story sounds like yesterday's story when we covered Amazon and AMC's acquisition fantasy. But this one's a little more believable. Yeah, we got this one from Bloomberg, got the other one from Daily Mail in the UK. Bloomberg's right here, Daily Mail's right here. Jack's hands, by the way, are in very different spaces in case you couldn't see that.

Now Grubhub, we announced in January, it was looking for a long-term relationship. It was rumored to be looking for an acquisition. Well, boom, Uber just showed up in a tuxedo with a bouquet, a five-carat rock, and a camera guy. Quick context, Uber is worth 10 times as much as Grubhubhub. Grubb's kind of desperate. Uber's got more of a position of power right now.

But keep in mind, Snackers, there's no receipt for this thing yet. The deal hasn't gone through, hasn't even been confirmed. The greater context here is that the delivery apps are like the five families splitting up New York City mafia style. You got the Luigi-Giani family taking the Bronx. You got the Gambinos taking Queens, and we're going to split Manhattan as I say when I say. Now, at the head of the pack, you got DoorDash, which controls 42% of the U.S. market, but it dominates the west of the United States.

Then you got Grubhub taken 28% of the U.S. delivery market, and they've got the Amtrak Corps, Philadelphia, to Boston. Uber Eats comes in at number three because it took its towns to South Beach and dominates Atlanta to Miami. That's 20% of the market, but then we're left at number four with Postmates with just 9% of the market. Pretty much just L.A. And of course, L.A. just does their own thing a little differently.

Now, fun fact, all four of these companies are losing money because they are beating up each other so relentlessly. Which leads us Snackers to the reason why Uber and Grubhubb want this merger. They're proposing the first ever Wall Street Mafia Truce. Let's go. We're going to sit down at Wales. You're going to get the Carbonara.

I'm going to make you an offer. You're going to not refuse. Now, Grubhub spent $91 million on marketing last quarter, desperately dishing out promo codes to get you to use their app. Uber's got iPhones too, so they're like, They're doing promo codes. We're doing promo codes. 10 bucks off your first order because we don't want you ordering on seamless.

The CEO of Grubhub is so frustrated. He famously complained on an earnings call a while ago that customers are promiscuous, jumping from app to app, whichever fees lowest, whichever promo code is best. You know who you are. And yes, Grubhub is judging you. Now, we think that consolidation is the path to profitability for these delivery apps. Jack, that sounds like a religion. The path to profitability is consolidation.

It's a self-help. group, but reducing the number of apps that you and I can order from will force customer monogamy. We'll have to just kind of like pick an app and stay with it. Also, let's do a little addition here, Snackers, with Uber Eats having 20% of the U.S. market and grow up having 28%, they now would be the market leader with 48% of the U.S. delivery market. And a company that big with such little competition could probably dictate prices and say, no more promo codes like Twitter's got no more edit buds. So, Jack, can you cut out the $20 worth of fees and whip up? the takeaway for our buddies over at Grubhub and Uber.

Grubhub would be the first to fall in the delivery wars. So we got to ask, who's next? Consolidation is coming. It's like a winner. So what we're thinking over at Snackjack and I took a lot of time on this, we're eyeing Postmates next. We think Postmates might be the next to get acquired because it's the smallest of the big four by far.

Plus, it's got a stranglehold on an entire market, Southern California. Also, it was supposed to IPO last year. It, like, filed to do so. It canceled it. And it has no intention. to do so soon because of COVID night. That's what we think. We want to hear what you think.

So who should merge, who should be acquired in the delivery app wars? Tweet us or Instapost us at Robinhead Snacks. Attention Snackers on the Snacks challenge. It's a little halfway over

of the pod. So if you're running out, time to run back. For our third and final story, we got our unicorn of the day, Vroom, just filed confidentially to go public a rare

quarantine IPO. The company's called Vroom, like Vroom, which is kind of discriminatory. against electric cars, which don't make any sound at all. Also reminds us of the old Mazda commercial, Zoom Zoom, Zoom, with like that creepy kid who came out of nowhere. Zoom, Zoom, who are you and why are you hissing at the cars?

Vroom is an online used car dealership that's filed confidentially to IPO, according to PFWIP. PFWIP, not PFWTM. People familiar with its plans. The Wall Street Journal, which did the original reporting, is twitching it up on. Sometimes those journalists over there really mess with us. Now, Vroom's website says it simply, buy a car entirely online and have it safely delivered, contact-free. They're like, we promise there's nothing physical about this. Yeah, no more haggling on price with the sales guy on the lot.

What do I have to do to get you to click here and throw that Mitsubishi in the shopping car? The company is bragging so much that it's contact-free. They literally provide instructions on how the handoff goes. It's wild. The salesperson will leave the keys and the paperwork in the car and then walk away from the vehicle. It's like a creepy drug deal. We have no idea where the salesperson goes after that. Yeah, it's like Enterprise rent a car.

We'll pick you up. Then what? Then what happens? Where do you go, Enterprise? Do I have to drive you home? Like, that's a little too intimate. We'll pay to have you not pick us up, actually. I'll take an Uber.

Now, what you can do if you go in room is you can buy or you can sell, and they're also offering like financing, warranties, and insurance products. It's used cars only, but it actually only does half of its sales online. True. The other half is with like old school used car dealerships. A little sneaky. So they're kind of too. Besides this, they're just emphasizing more of the online stuff. It's like George Costanza,

importing exporting, but focusing on the exporting. Your uncle shows off the Apple Watch, but they have no idea how to use the internet. Vroom has a more famous rival, Carvana, which has seen its share price jump seven times since IPOing back in 2017. We repeat, its rival Carvana publicly traded, share price jumped seven times. Vroom is also competing with CarMax, which has been doing something similar for years. But what's fascinating us about this moment right now, is that the IPO drought is real and it's depressing. It is depressing. Listing stock publicly amid volatility and a damaged stock market like we have right now, not fun.

It's like having a wedding on a dangerously rainy day. If there's an 110% chance of hurricane, you postpone the thing. Only one tech company has gone public in all of 2020. So if Vroom actually does this, it'll be brave. We're not even going to mention their name. So, Jack, what's the takeaway for our buddies over at Vroom? Vroom thinks its S-1 document could be COVID-proof. Snackers, we're talking about Room's S-1, which is like the Tinder dating app kind of financial regulatory

filing. You got to file when you IPO and tells potential investors everything about your company. Now, Vroom, we can't see it to S-1 yet because it only filed confidentially to IPO. But when this is available publicly, we expect to jump in snack style and expect to see many features about Vroom that'll be COVID-19 friendly. For example, online car buying. Test driving and checking out a dealership bathroom isn't exactly social distance friendly. And then they're used cars only, which in a recession people may want to buy if they're trying to save money. Finally, a lot of people might be scared of taking public transit because of germs. So some people might be buying a used car who didn't have a car before. But keep in

mind that Carvana is 10 times bigger, growing twice as fast and more profitable. Plus, who's ready to buy a car online? I mean, that's kind of a big purchase to do on your couch. How are you going to kick the tires and then make that face being like, oh yeah, this feels about right. I think this is about right. I can see myself in this car. Yeah. No one's ever kicked the guys be like, oh, this doesn't feel as what I thought it would feel like. We'll find out if this works for Vroom when an IPO is hopefully in June. Jack, and you'll whip up the takeaways for us over there. Twitter is letting its employees work from home as long as they want.

Forever with an F and it could start trickle out economics megatrends. Uber and Grubhub might hook up, according to reporting by Bloomberg. Confolidation is the path to profits. It's a family thing. Our third and final story, Vroom is trying to IPO next month. a brave move in such a volatile market. But Vroom thinks it's e-commerce for cars company could be COVID-proof-ish. Ish. For our snack fact, we got like three people and two species here.

We got Ranger the Dog, Matt the Human, and Brett the Human who are sending this in from Menlo Park. Now, Matt, Brett, and their dog Ranger point out that Apple's headquarters, which looks like a spaceship, by the way. Beautiful. Cost $5 billion to construct. They crunch the math on that, and that's equal to the price of about 5 million iPhones. Now, Apple can sell enough iPhones, $5 billion, in six days to pay for its entire headquarters. And it would have just a little bit of extra time left where they could listen to eight full Snacks Daily episodes before they seal the deal. That's right. Apple's headquarters cost six days plus eight episodes of Snacks Day.

We love it when math involves multiple units of measurement like this. By the way, Matt and Brett, twin brothers, celebrating their 21st birthday at home right now. We wish you could celebrate in a bar. We're glad you can celebrate with a snack day. I guess it's like safer. It's definitely safer. Also, Matt, go blue. And Brett, I don't know what college you're at, but go that college, too. Go that color. Snackers, tell us what part of the pod today you like most post on your Instagram story, tag us a Robin Hoodin's snack. And also, HY, HYSD. Have you had your snacks daily? We'll see it tomorrow. If you know, you know. 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.