The Best One Yet - 🕹️ “Video games are social media now” — WeWork’s $3B is cancelled. Google’s Big Data rebrand. Sony’s PS4 seesaw situation.

Episode Date: April 6, 2020

WeWork was supposed to get a $3B lifeline from its biggest investor this month, but that just got cancelled because its core business model is a public health risk. The surge in video game demand from companies like Sony in the corona-conomy actually marks an evolution in the term “social media.” And Google’s latest Big Data project could help rebrand the whole Big Tech industry.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. Welcome back. It is Monday, April 6th. Snackers, we're bringing the best one yet this Monday. Exactly. It's a straight-up T-boy. No joke. We have a wonderful mix of stories. Jack, story number one, what have we got? For our first story, Sony is facing a seesaw situation in this corona economy. Video game demand is up, but PlayStation coolness is way down. But we noticed something interesting about the state of video gaming. Yeah, technically, they're part of the social. media industry now. Going to have to regroup them. For our second story, WeWork was supposed to get a critical $3 billion bell out this week. That just got canceled. Maybe because it's fundamental business model of WeWork is a public health risk right now.

The CDC is like no touching of the face, the mouth, or the WeWork help desk. For our third and final story, wherever you're listening to this podcast right now, Google is aware of it and is saving it on a file. Google's like, hey, you look great today. I love your shirt. But its latest move is tracking social distancing, and this is a special opportunity for big data.

We're talking about rebranding big data. From big bad data to big good data. Now, Snackers, before we jump into all that, we all know we are in a wild moment right now. And Snacker Ken from Chicago pointed out something pretty interesting we decided to jump on. The last time our economy was doing horribly was 2008 and 2009. And Ken from Chicago points out that quite a few unbelievable companies, were founded during those dark days. We're talking companies you're clicking, clacking on right now on your phone. We mean Uber, Airbnb. How about Pinterest? Also, Square, Slack, Venmo, Instagram. And because Jack and I like to

balance things out, we should point out also WeWork. Yeah, WeWork was founded then too, and that's not such a great company anymore. Now, Jack and I threw on our T-boy t-shirts, dove in snack style and didn't stop with just the last financial crisis. Remember the panic of 1893? Jack, do I remember the panic of 1893? We're talking to and Thomas Edison, he founded General Electric in that evacked moment. Incredible. Ebenezer Kramer once wrote a story about the 13-month panic of 1907. They really got to rename that one, the 13-month panic of 1907 through 1908, but it's a little wordy. Well, guess what? During that economic financial crisis, General Motors was founded. Jack, how about a few decades later? Let's

talk the Great Depression. My favorite building, the Empire State Building in New York City, was built in 13 months during the Great Depression. I con. And in case you were wondering about the recession of 1958, that's what brought us Trader Joe's. Last quick reminder here, Isaac Newton, Sir Isaac Newton. Great guy. He founded the theory of gravity while in quarantine in England in the 1600s. Isaac would have been a snacker. Snackers yourselves. Remember, hard times are when great ideas are born. We are already excited to report on snack someday the companies that are getting launched right now. In the meantime, let's hit our three stores.

You're tuned in the snacks daily. We spoke to the lawyers. It snacks about the hair ain't 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.

Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Sony is facing its own seesaw situation with the coronavirus right now. Here's the thing. Video gaming is huge right now. Yep, but its PlayStation is a lame duck. All right, before we jump into this on three, and we're going to do it on three. We're going to do it together on three. Favorite video game, one, two, three. Sonic the Hedgehog. I have a traumatic reaction when I see banana peels anywhere. I don't care if it's just in it, like around a cereal. We should really start comparing companies to Mario Kart characters. Thinking AT&T is a Bowser.

So true. They're definitely snacker browsers. Now we notice something interesting about Sony's situation right now, because Apple is really the new Sony. Actually, Sony is really the new Apple. And that's because Apple has iPod, iPhone, iPad, AirPods. We're going to rewind to the 70s, 80s, and 90s, Sony launched Walkman. 1979. Discment. 84. PlayStation. And then the camcorder that Kevin McAllister had in Home Alone. But 1995 feels like a throwback, kind of feel like we grew up with it. It's kind of like a sibling to us. That is an incredible lineup of tech gadgets. But today, Sony is only worth $73 billion.

And that's basically 10 lifts in case you're calculating it. Yeah, but it's also like less than a 10th the size of Apple. And that's because it suffered from a bunch of competition in video games going on in the past two decades. It also suffered badly from the Japanese earthquake of 2011. Oh, and then it also suffered again after the North Koreans hacked them for the movie, the interview about Kim Jong-un. Yeah, that was a tough moment. But Sony could be having a good moment right now because of video gaming. Video games in the corona economy. And our buddy, Timmy, just happened to be splurging on one. We noticed on social media. He just bought a PS4. I can vouch for Timmy. He was an All Madden Madden player in college. Sounds like he's playing

all Madden again now that he's working from home. And we'll say it again. Now, right now, state-at-home orders are affecting 90% of the U.S. population. And there's a third, 30-day recommendation that you stay away from people from the White House for everybody. So video games have become your like post eight-minute abs pre-eight-packs of Doritos activity binge go-to. It's a perfect thing while everyone's stuck at home. But investors don't seem to be sure if Sony is going to benefit from this work-from-home situation. We checked out Sony's stock and it's down 21% since its peak while the rest of the market is down 27%. So Sony's doing a little bit better than the rest of the market in terms of how bad the stock's moving. But we think the one

issue here that's preventing the stock from going up, PlayStation 4 is a lame duck. Right. It's core product right now isn't something drawing a lot of interest. And it's PS5 doesn't come out until this fall. Exactly. Who's going to buy a PS4 right now when it's about to become obsolete because the PS5 comes out this holiday season? Actually, our buddy Jimmy just did that. So Jack, what's the takeaway for our buddies over at Sony? Video games are social media. So is Peloton. So is HQ trivia. Snackers, it's not just Facebook, Snapchat, or Twitter where people are connecting with other people online these days. Live interaction with friends is being built into everything from fitness apps to video games. So if you can connect something to the internet, you should be able to connect that thing with the internet with your friends.

Exactly. Companies embracing their social media element during the stay-at-home period will have an advantage. Video games are social media. our second story, 0101-1-1-1. Google is using big data for good. Jack knows what I'm saying there. Nick, could this be the start of the great big tech rebrand? It's a great question. I'm glad you asked it, but first, we're going to begin with a spoiler. Google is tracking everything you're doing right now. Everything you do, Google knows where you are. They're probably building an artificial intelligence voiced version of this pod as we speak. And there's nothing Jack and I can do about this. I don't even know what that means, man.

Those of us who use Android phones, we're telling Google everything because Android is Google. And iPhone users, we tend to be a lot more smug, and yet we're still telling Google everything about us via Gmail, Google Maps, and YouTube at this moment. Or anytime you Google something with Safari browser on iPhone, you're telling Google where you are. Which brings us to the COVID-19 community mobility report, which sounds like the climax part of like a Michael Bay movie. No, this is actually like great public data, public health data. from Google that came out on Friday, they tried to answer the question, Yep. Are we social distancing properly?

It's a robust summary of human movements from 131 countries, all in one convenient location. That's right. Google took the data from your Android or from your iPhone, aggregated it up into a giant report and broke it down into 131 countries, basically a report card for the CDC's recommendation. So Jack and I whipped up some waffles, decided to jump into this thing over breakfast, and decided to make it a little bit more digestible, turns out here's the core theme. We are going out less, but we're not going out that much less.

No, we're looking at like the retail and recreation sector, which is the non-essential economy. It's down 47% overall when it comes to physical human movement. Yeah, yeah, we're talking shopping, entertainment, gyms, the places you shouldn't be going right now. We're doing it 47% less. Then we can look at the essential economy, like grocery stores and pharmacies,

which we're physically moving around to 20. 22% less. 22% less isn't that big a duckline, but it's understandable because we need food and we need our drugs. And then there's like the outdoors, aka everywhere where you're not inside, which we're down surprisingly 19% while remaining socially distanced. Now the number that we found fascinating was that the amount of people who are moving around and going to work, it's only 38% less, even though 90% of us are supposed to be at home indoors. Yeah, you might be like me working from home or Nick. working from home. Turns out most people are not working from home. They're still heading into work. And thanks to this fancy Google report, this data is now broken down by states, zip codes, and income brackets, so then you can get some more interesting takeaways out of this single

takeaway. Somewhat unsurprisingly, jobs like cook, cleaning, bagging groceries, shipping Amazon packages, those can't be done working from home so people are still going into work in those professions. And a lot of the people in those professions also can't stop taking public transit, which then makes them susceptible to being around other people like commuters, which then puts them more at risk. And this leads us to a big unpleasant truth about the way this economy is dealing with the COVID-19 crisis. Social distancing is a luxury that the poor cannot afford. So, Jack, what's the takeaway for our buddies in this Google project of big data? This crisis is a big chance for tech to rebrand.

Data is good. Snackers, that's something the tech community has been preaching and academics have been believing. for years. Yeah, long story short, data teaches us things and we can improve people's lives with those insights. Case in point, if you know everyone in population X is doing blank, then you can predict trend blank out of that initial blank. These variables are confusing, Nick. But then, with all that insight that Nick just confusingly described, you can implement policy Z to make things better for people J. Blank to blank equals blank. Now, however, personal data, is almost always followed by selling my personal data or exploiting personal data when it comes to public

discourse. Honestly, it's become a word that's almost offensive. You could call someone data if you didn't like them. In order to rebrand, Nick, instead of just using data to maximize online ads like Facebook, Google, and Amazon are doing, they could use it for public good. And Snackers, this Google project is an ideal example. Public health officials can change COVID-19 policies because of this incredible data and insights. And maybe rebrand big data. For our third and final story, WeWork was supposed to get a $3 billion with a B private bailout this week. Well, that just got canceled. Pretty much. Now, last fall snackers, you may have been enjoying season one of the epic docudrama that was the $47 billion WeWork what was happening. Adam pretended real estate was taxed. Then Adam spoke to pot. Then the

business model started falling apart. Then the IPO got canceled. It was insane. It was insane. while to watch. And then we got the critical season finale, which was a bailout by its biggest investor, Japanese venture capital firm, SoftBank last fall. This was a big deal. SoftBank, which has already invested billions into WeWork, agreed to invest billions more to make sure it didn't go bankrupt. They've literally invested $14.5 billion so far, which is double what WeWork is worth right now. It's been a horrible investment for SoftBank. Now, interestingly, a key part of that deal was a $3 billion tender offer that was supposed to go down this month. And that money was going to two places. Half of the $3 billion was going to WeWork because WeWork desperately needs cash to continue

operate. And the other half was going to existing WeWork shareholders who would be selling SoftBank their shares. And of that second part, the $1.5 billion going to existing WeWork shareholders. Pretty hefty amount. One billion of that was going straight into the pocket of Adam Newman, the controversial pot smoking founder of WeWork. But then in a wild twist, at the end of last week, SoftBank completely reneged on the offer, won't pay, won't shut up. That means Adam Newman has to throw away his I'm a billionaire t-shirt. We're sure a lot of WeWork workers were not happy that he had that t-shirt to begin with.

SoftBank basically played the old shareholder responsibility card. Oh, this is a classic card to play. Basically, here's how the old shareholder card goes down. Jack, you want to take the, do the honors over here? I said, we have a fiduciary responsibility to maximize the value for our soft bank shareholders, and giving WeWork $3 billion more dollars that it'll probably destroy is irresponsible. FYI, the shareholders of SoftBank, which is publicly traded, agreed, and its stock rose 2.5% right after that news. They're like, oh, thank God.

In the meantime, just to back itself up, SoftBank also played the old Frank Costanza card and whipped up like a list of grievances on WeWork. Not only would it be irresponsible to shareholders, WeWork also has ongoing criminal and civil investigations going on. That shocker could have been a problem. Also, really interesting, awkward thing that we noticed is what's going on with WeWork locations around the world. Jack and I dove in snack style to see which ones are open where,

and you're going to be blown away by this. Milan, the epicenter of the COVID-19 outbreak in Italy. It's in northern Italy. The WeWork offices are still open, so people can still go in there, contact other people, and, you know, that's pretty irresponsible to spread the disease. In fact, if you check the link we looked at, most of the European offices for WeWork are open. So, Jack, what's the takeaway for our buddies over at WeWork?

WeWork's core business model would basically make Dr. Fauci of the CDC throwout. Snackers, WeWork unfortunately didn't IPO last fall. But it does have publicly traded bonds, which are debts or IOUs. And those publicly traded bonds are about $0 each right now because investors have no confidence that WeWork can repay them. Look at what WeWork's business model is right now. Entrepreneurs can't go into its offices and therefore aren't paying WeWork worldwide to use its space. But WeWork still has to pay its rent worldwide because WeWork doesn't own the buildings that it's souped up to be really nice offices for startup. So Jack and I were talking about WeWork prepping for this and we're wondering if WeWork had IPO last fall,

its stock, which would have been publicly traded, would probably be around zero right now because of this situation. Guess what, though, Nick? WeWork has stock. It's private. but we bet it's probably sadly close to zero. Oh, and by the way, another thing Jack and I thought about, WeWorks made a lot of acquisitions in the last decade probably should have bought Slack or Zoom along the way.

That would have boosted the value of WeWork shares. Jack, can you whip up the takeaways to start our week, please? Sony used to dish out showstopper new product unveils, kind of like Apple does today. Now it's Profit Puppie. Should be PlayStation, but everyone's waiting for PS5 except for Timmy. Second story, Google determined that many people are staying at home during this COVID-19 crisis, but that's a luxury many can't afford.

And they could use this moment instead to rebrand big tech. Third and final story, WeWork is banking on a $3 billion check coming from its biggest investor, SoftBank. But SoftBank's kind of pulling out because COVID-19 could be WeWork's Ku deGra. Now, Snackers, time for our snack fact of the day. This one sent in by Grace and Doll. in lovely McLean, Virginia, which, Jack, I believe McLean is for lovers from what I've heard. Virginia is for lovers, but I think West Virginia claims that they're for lovers do. But McLean is like, no, we're really for lovers.

So this one's about the Panama Canal, which was finished in 1914. Turns out the lowest toll ever paid to pass through the Panama Canal was 36 cents in 1928 by a guy named Richard Hallibur. The 36 cents back then is pretty cheap considering the average toll right now for a ship is 54. $1,000. It's pretty cheap because Richard Halliburton didn't have a ship. Nope. He was swimming.

Yeah. He swam the 48 miles from the Caribbean Sea. Not bad. To the Pacific Ocean through the Panama Canal. Took 50 hours spread out over 10 days. Not too shabby. Would have been a snacker. Are you thinking what I'm thinking, Nick?

I'm thinking what you're thinking. A man, a plan, a canal, Panama. I'm thinking the same thing, but I'm thinking it backwards, Jack, if you know what I mean. Snackers, a belated birthday shout-out to John John and I, and I, I'm Irishman who now lives in New York. Your younger sister Kara thanks you. She always asks you HY HY HY H-D, and you always ask her HY HYSD. If you know, you know.

We'll talk to you guys tomorrow. Thank you for snack. Can't wait. This is Jack. I own stock of Sony. The Robin Hood Snacks podcast you just heard reflects the opinions of only the host 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.