The Best One Yet - Virgin Galactic’s space IPO, Beyond Meat’s 1st ever profit, and Tiffany’s $14.5B acqui-proposal

Episode Date: October 29, 2019

Sir Richard Branson’s Virgin Galactic just became the first ever space tourism IPO, but investors don’t have anything to compare this to. Beyond Meat enjoyed its 1st ever profit, but the stock still dropped 10%. And Tiffany’s received a $14.5B acquisition proposal by French luxury leader LVMH because they’re a complementary couple.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's Tuesday, October 29. It's T-Boy Tuesday. Very true. This is the best one yet. Best snack stocks jump.

Jack, are three wonderful stories. I love this mix. The first one is about this new category of tourism. Have you heard of this? What's going on here? We've talked about movie tourism, which is where you go to New Zealand and like check out the Hobbit Hall. We've talked about food tourism. We've talked about yoga tourism.

There's wellness tourism, too. This is space tourism. Tourism tourism. Virgin Galactic is the first publicly traded stock about space. Except we got to. categorize what category is this thing in. We'll do that. Second story. Beyond me. Second ever earnings report yesterday. It's like you grew up so fast beyond me. So quick. First ever profit. Interesting. What happened to the stock? Down. Drop 10%. Very curious situation. Jack

and I jumped into its snack style. Third and final story. Tiffany's. Oh, very shiny. Diamond rings. Okay. Here we go. First ever gift you got your girlfriend. A nice pendant necklace. Or she got you. Well, the stock is up 31% because it's getting offered for acquisition. by LVMH. Very true. I think we worded that one awkwardly. You know what we're talking about. You know what we're talking about.

I was speaking French because LVMH is a French, like really expensive company. T. Chique. It looks great on you, by the way. Now, before we jump into that, we mentioned it was T-Boy Tuesday because it is the best one yet Tuesday. Halloween's two days away. So you're welcome for some great business-themed Halloween costumes. We're about to give you. Snackers delivered these to us on Twitter.

We were blown away. Jack and I were laughing all weekend at these. Wonderful mix. What do we got? Nick and I interviewed the co-founder of Peloton a couple weeks ago. Very true. You could be a Peloton instructor. You just got to wear spandex and yell at people.

Yeah, just give them compliments. Julie, congrats on the 200th ride. All right, we also have got a sexy Spike Seltzer situation. Jack and I are going to do this two pack right there. That's a couple. That's a good couple. You could also just be Twitter. Very true.

They're jacking up the ads. So just wear a blue outfit and tape a bunch of ads all over your body with like one authentic tweet. Great one from Lauren over here. We work water dispenser except without the fancy fruit in it. You go as a fruitless, we work water dispensers. Because, you know, there's no more fun at WeWork. Not as much as much of time. Or if you want to get banned, you could be Winnie the Pooh in a Houston Rockets jersey with a basketball.

Or if you want to do a snack style takeaway, you could do bad retail is dead, dresses a zombie, and put a Kmart shirt on. Great idea, Chris. We don't have time to give credit to all of those snackers. But Nick and I didn't create any of those. It's like an injured unicorn situation. There were a lot of really good ones. Those were the ones that were just not safe for Twitter.

So we have four other ones on Twitter at Robin Hood Snacks. You can vote anytime today. The winner gets a free T-boy t-shirt. The greatest costume of all. But before we go, quick correction. In yesterday's pod, we mentioned that Netflix isn't a promo puppy. Not the case because T-Mobile's been offering Netflix for, like, actually a while back is like a potential option. The deal's been around so long I forgot it.

It's ancient. But a lot of T-Mobileistas. There are plenty of T-Mobile. Corrected us. If you have a T-Mobile account with at least two lines, you get Netflix for free. Snackers, remember to vote in the... the poll today. We got to pick a best costume. Happy T-Boy Tuesday. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal

out the way. The snacks about the hearing food is air candy. They don't reflect the views of the robberhood family. It's all informational just so. You know, 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 For our first story, Virgin Galactic is the first space company to ever go public after yesterday's idea. Virgin Galactic planetary. Take me to your leader. Leader actually is Richard Branson.

Sir Richard Branson. He's listening and I'm sorry, Mr. Branson. Now, Richard Branson said yesterday, having closed a number of public companies. Must be nice, Mr. Branson. This is the most satisfying of them all because it's a space company. And because he just like tripled his money. Let's talk about the business model of Virgin Galactic. Okay, Q, what are you going to get when you book something on Virgin Galactic?

Yeah, let's do the customer experience. Okay, first, you're going to have to set aside 90 minutes out of your day. Because that's how long it takes to get to space and back. And then you get on a plane that's not just any plane. It's more like a spaceship than a plane. It's a hybrid. It's probably a very nice, like they've got a good, like a lounge situation. It's a hybrid.

And you go up for 45 minutes, and then you are so high, you're in like the upper stratosphere, right? We don't even know what that name is. But then guess what? You spend about three minutes in that stratosphere level where you get weightlessness. In a gravity-less situation. Do you know how much this is going to set you back that 90 minutes? One small step for my... IRA?

Like $250,000 for that thing. Okay. You could just like spend $300 and go to Epcot, fly down to Fort Lauderdale. So Richard Branson went to the New York Stock Exchange yesterday to make this business model a public company. It's the first space company on the public park. Didn't wear a suit, decided to go with the new, Under Armour space suit specifically designed by Under Armour for Virgin Galactic. But this guy gets to do whatever he wants because he founded Virgin Records in the 70s in the UK, which is music stores and a record later.

Also went out to Virgin Atlantic, the airline. Virgin Health Care is another company. And then Virgin Hotels and then come up with another noun and add Virgin in front of it. Yeah, that is just the beginning of the companies that Richard Branson has founded and become a billionaire with. Now Virgin Galactic was founded in 2004, raised a billion dollars, and Sir Richard has a pretty hefty amount. He's got 51%. Right. He pretty much spent a billion dollars on this company. Pretty much Richard's company. Now, as a publicly traded stock, if you take all of those shares, 51% of which Richard Branson owns, and put him in a bucket, that's a $2.3 billion bucket. Now, Jack and I

aren't rocket scientists, but we're pretty sure that's one fifth of a left. That's one fifth of a left. Now, here's the astonishing thing about Virgin Galactic. The losses are astonishing. This is pretty much a pre-revenue company. Like, when we talk about Uber, we talk about Lyft, We're talking about companies that don't make a profit, but they're bringing in a lot of cash. They just spend more of it. Somehow Virgin came up with $2.4 million of revenues last year. Probably those reservations, which are $250,000 each. But the costs were $140 million because they've got to get this thing off the ground.

So that's 58 times its revenues in losses. Losses are 58 times its revenues. We work is like one of the least profitable companies we ever saw. We know where. They had about a dollar of losses for every dollar of revenue. This is 58 losses for each dollar revenue. Now, next year, they're planning to, like, flip the switch and change things because they're going to start bringing people to space. And that's when they think the real money is going to come in.

They have 600 people who have already paid that $250,000 deposit. Includes Leonardo DiCaprio and Justin Bieber, both great snacks. So they have the front of the list for those space flights, which are taken off next year. The wild thing is that there are another 3,700 humans who are on the wait list for the wait list. Nick's right. They have registered with Virgin Galactics so that they can. be on the next set of reservations. Jack, do you even want to do this? I don't even know. I'm very happy with Earth, right? Well, Richard, if you're listening, we'll take a promo code.

So, Jack, what's the takeaway for our buddies over Virgin Galang? There is no company to compare this company to. That's the thing. Investors love comps, as in comparable companies, because it helps you determine if the share price or the stock valuation is really accurate. Yeah, if you hear a stock is $50, is that the right price? Is that the right price? What does that even mean? You need to compare it to something else. So if you, if you, you know, you can determine it to something else. So if you're thinking about a lift stock and you know how much Uber costs. Very true. Then you can start to figure out how much lift should be worth.

Because the comparables are ride-sharing companies. So what is Virgin Galactics comparable? Is it Tesla? You know, a company that started out focused on the rich and now is making its cars more accessible? Well, it also has a wait list like Tesla. Very true. Or is Virgin Galactic more like an airline or a cruise ship? Yeah, because it's a tourism company.

Or is it most accurately like SpaceX and Blue Origin? because those are identically space tourism companies. The answer, yes, it is more like SpaceX and Blue Origin, which are owned by Elon Musk and Jeff Bezos. But small issue there, those are both private companies. They're not public yet. So Virgin Galactic stock on the public markets, good luck. It's going to be a wild ride.

In the meantime, we'll take those comp tickets. For our second story, Beyond Meat just served itself its first ever profit. We know what you're thinking. We know what you're thinking. Where was the celebration? What did they hand out? What was that? Nope.

Nope. The stock fell. Opposite. By like nine, as much as 15%. It actually fell a lot. It was significant. Now, the earnings report crushed expectations. Kind of like the burgers.

You know when you see those videos? Yeah. They're like, sir, how was your burger? And he's like, it was incredible. They're like, it was all peas. It was made out of peace. Full disclosure, Nick and I are both beyond meat shareholders. It seemed like a good time to mention that.

But sales more than tripled last quarter to $92 million. Let that settle in. That's a huge number. We're not talking about like a tech company here. It's also increased. increasing sales while keeping costs under control. Now, the profit that came in, it was a little profit. It was like a quarter pounder.

Yeah, but any first profit is a good profit. You never forget your first profit. Now, we did the math. It had about a 4% profit margin. So for every $6, two pack of quarter pound plant-based burgers, that's your standard Beyond Meat right there. I bought a couple of those before. Beyond Meat makes 26 cents of profit.

Plus, they decided to boost the revenue forecast for the second quarter in a row. So they're expecting even more Beyond Meat on plates, But then the stock price fell, and the reason why is anyone's guess. Now, we know what you're thinking right now. You've got two questions. One, yes, Jack and I do take avocado on our burgers. Two, why did the stock price drop so much, given what we just told you about the earnings report? Nick, that is anyone's guess.

But we think it's psychological. Very true, because Tuesday, today is a very particular day. It is the end of the lockup period. The lockup period is a rule for any new publicly traded stock that existing shareholders, who are shareholders at the IPO, people who are like early investors in the company. They need to wait six months after the IPO before they can sell their stock. Now, the reason for that is because regulators don't want early investors in a company to suddenly all dump their shares and sell them on an IPO day, which is already a chaotic day.

They don't want the old dump and ditch. So they want you waiting six months before you're allowed to sell. And guess what? That day is today when they're allowed to sell. So investors are kind of nervous. Like, I don't know what's going to happen now that new investors can sell, but I'm out of here. So, Jack, what's the takeaway for our buddies? over it beyond meat. The growth for beyond is in restaurants, not the grocery aisle.

In the grocery aisle, the competition is insane. You've got... Fake me real competition. Kellogg's, Tyson, Nestle, Hormel, these giant, like, food globo, globo brands. And those big food companies, Nick's talking about, they have decades of experience in grocery store. They have firsthand, first-name relationships with the stock boys, the ones who decide who's going to be at eye level in the, you know, the northeast corner. They, like, hang out on the shelves, they've got like a favorite shelf space that they know is like right where you're looking. So Beyondmead's like the new kid disruptor in the grocery store, that's going to be tough.

Meanwhile, in the restaurant sector, Jack and I have noticed the competition is very different. It's pretty much just one company. Impossible foods. Impossible Foods. Beyond is hooked up with McDonald's Taco Bell and Duncan in restaurants. Impossible has Burger King, Little Caesar's Red Robin. In the meantime, Beyond's restaurant sales, they're up five times what they were last year. Quintupled, whereas the grocery aisle is still growing, but only three.

three times. For our third and final story, Jackie, getting down on one knee over here, what? Tiffany. Tiffany's just got an acquisition bid from LVMH. Tiffany, I remember the first time that I saw your face. Let's see the hardware here, Tiffany. Well, it's been $14.5 billion. That's the acquisition offer. Is this a cushion cut, emerald cut, pear cut? We've got the four Cs here. I don't know. Tiffany is all class. Founded in 1837 in New York City. Not too shabby. And, uh, Pretty impressive stock jump 32% after this acquisition offer. Yeah, so Tiffany's is now worth about one lift.

LVMH, as in Louis Vuitton, Moennec, is founded in 1857, worth a cool $214 billion. 17 lifts. That's a pretty significant size. It's because it owns 75 luxury brands for everything from, like, fancy alcohol to fancy, fancy, fancy, to fancy clothes. And LVMH is led by Bernard Arnault, who is the richest non-American in the world. Very true. Now, the strategy here for LVMH makes a lot of sense because jewelry is only 9% of LVMH's sales. Yeah, the other stuff is handbags, shoes, luxury clothing, and handbags that you can't afford.

Turns out LVMH wants more jewelry and there's no better acquisition target than Tiffany. This is pretty complimentary. Tiffany jewelry, 92% of Tiffany sales are jewelry. Now, the deal isn't official. Tiffany can either accept or reject this offer and we'll see what happens. But in the meantime, we're going to cut right to the takeaway because the takeaway makes a lot of sense here. Jack, what's the takeaway for our buddies over Tiffany? This acquisition comes down to TLC.

Who wrote these lines? Timing, location, and customer. Very true. The first T here is timing. Tiffany's stock is basically on sale right now. Tiffany's depends a lot on Chinese tourists buying jewelry in America, and that's been slowing down. As a trade war. As a result, sales at Tiffany's are down 3%.

They've got a new CEO. Things just aren't working out. And the stock price of Tiffany's is down by a third from its all-time high. it's basically on sale. All right, the L and TLC, location. The U.S. is the new focus of LVMH. It has a factory in Texas. It just signed a deal with Rihanna.

And guess what? There are 19 million American millionaires. Think about that. That's more than France, Germany, the UK, China, and Japan's millionaires combined. It's a lot of luxury dollars. And then the final part of TLC, the C, it's the customer. The new generation Lux jeweler, that's what Tiffany wants to be. Tiffany's got Lady Gaga.

Dakota Fanning all up in their commercials. Yeah, they just throw out someone who's our age and they're like, boom, you guys are going to buy it. So what? We'll update you if Tiffany accepts this proposal. Beautiful. Jack, can you whip up the takeaways for us over there? Nick, Virgin Galactic is one of the least profitable publicly traded companies I've ever seen. There's no other company to compare this to tourism, tourism.

Beyond meat stock fell, despite its first ever profit, so rude. The lockup period ends. Today, calendars are marked. Third and final story, Tiffany's just got proposed to by a French, luxury giant with very deep pocket. Tiffany was in the right timing, location, and customer. TLC for LVMH.

Congrats the lovely couple, by the way. Potential couple. We know it's not official yet. Snaggers, time for our snack factor today. This one sent in after doing a little bit of homework by Michael Carpovich, who grew up in La Paz, Bolivia, but went to college in Iowa.

And now lives in Tucson, Arizona. He's all over the place. He gave us his full bio. I love this passport he sent us. So we've asked Snackers, what is subscription? Right. It's when you have

so many subscriptions, you hit peak subscription, and it's saturated your whole subscription. And you're just freaking out, man. You can't do any more so you call someone. Well, Michael actually jumped into, like, the census data and figured it out for us. Basically, the average American household has 75,000 income neck. And after the essentials, like food, alcohol, housing, transportation, you got about 7,000 left. But that means you've got about $571 a month that you could be spending on, you know,

subscriptions. And if the average subscription is $10 a month, that's $57,000. So that means the peak subscription for the average American household is probably around 57 subscriptions. I've got like five, so apparently I need to sign up for a bunch of things. I think you're not getting enough direct-to-consumer everyday razor thing over that, over that. Michael, thank you for that great quasi-fact of the day.

We appreciate you doing all the math. Now, Snackers, remember to vote today for T-Boy Tuesday on the best Halloween costume. At Robin Hood Snacks on Twitter. We'll catch you tomorrow. By the way, this is Nick and both Jack and I own shares of Tesla. 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, 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.