The Best One Yet - “Virtual Reality no-showed the corona-conomy” — MasterClass hits $800M. Williams-Sonoma’s pimp yo crib. Americans gained $$$ in Corona-conomy.

Episode Date: June 1, 2020

Williams-Sonoma isn’t just living the pimp yo’ crib megatrend — it’s revealing who’s enjoying it the most. Our “Almost Unicorn Of The Day” is MasterClass, which just hit an $800M valuation, but the fundraise highlighted that virtual reality is missing its moment. And you’re probably not shocked that consumer spending dropped last month, but you should be shocked how much Americans are suddenly saving up. 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, June 1st. April showers bring May flowers, which brings more staying at home every weekend in June. How was your weekend, by the way? Same as it was last weekend, Jack, I'm aware of this.

Nothing changed. Nothing different. We got three fantastic stories, though. I cannot wait to jump into. Snackers, Jack and I happen to make this one our best snacks daily ever. For our first story. Yeah, it was a nice little Saturday, actually. We might go to William Sonoma.

I'm not sure if we'll have time. William Sonoma stock jumped up, you know, casual 14% before the weekend. The fancy home goods icon has enough brand depth to furnish you from crib to nursing home cradle. And it's earnings reveal exactly who is pimping your crib. Pimping your crib, it's actually the white-collared employed people. Yeah, that's who's doing it. Second story check, who we got? Want to learn how to yell at people about salt? There is a Gordon Ramsey master class for that. Congratulations. Our almost unicorn of the day is masterclass, which just hit an $800 million value. after its latest fundraise.

But this is really an in-depth lesson on what's wrong with virtual reality. For our third and final story, not shocker, consumer spending is way down in the coronavirus. Actual shocker, consumer saving is absurdly up. This is actually the biggest surprise Nick and I have seen during the whole coronavirus. American incomes are actually growing. That's right. The average Snackers checking account is highly likely bigger than three months ago before. COVID-19. I'm Ron Birkin.

Now, Snackers, a lot happened after we recorded our last podcast on Thursday afternoon, which went out Friday morning. Yeah, before we jump into all that, protests turned into riots in Minneapolis and then a bunch of other cities late on Thursday night. And that led to an escalation of the Trump versus Twitter war, which we reported on in Friday morning's past. So Jack and I are recording this podcast actually on Friday, so the violent scenes, they're like, they are absurdly fresh in our minds. right now. We're hitting the mics, whipping up takeaways, but this is what we're also thinking about. We had to get this off our chest. We had to talk about it. This pod is digestible financial news,

but we couldn't jump into days recording without saying a few words. We hope that the Twitter feud and writing don't make us forget the original crime here. Right. The original crime, a person was murdered by someone who was supposed to protect him. And it was horrific to watch. It shook us, and we want to pause for a moment to acknowledge George Floyd, the victim. Snackers, thanks for doing that with us. I can't wait to hit our three stories. stories now. You're tuned in the snacks daily. We spoke to the lawyers. It's snacks about the rain food. It's 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. Right. Snacks is digestible. Business news for you. Robberhood Financial LLC. Member Fenra slash SIPC. For our first story, William Sonoma stock just jumped 14% on Friday. Nick, did you know West Elm has a mid-century modern stock? Jack, did you know Pottery Barn has a cast iron stock? Did you know neither of those stocks are called West Elm or Pottery Bar? That's because William Sonoma is the California king-sized furniture corporation that owns a whole bunch of huge end furniture brands.

William Sonoma has cornered the market of every corner of your apartment. They've also managed to whip up like the best gluten-free stuffing mix in the business. I can vouch for that. I don't know why I only have that once a year at Thanksgiving. That should be like a weekly thing. They've covered so much of the market. We're shocked they don't have like an extra gluten version. Now, William Sonoma isn't just ridiculously high-end and expensive kitchen aid mixers and cake pants. No, no, no. They basically sponsor your wedding registry. At the same time, they're also a furniture empire from crib to squib. That's right. crib to squib. We said at first, there is a great chart in their investor presentation, which will tweet out. Yes, Jack's at T-boy Jack. I'm at Nick of.

New York. Follow us. We'll get that out to you, Snackers. William Sonoma has brands for you from expecting a baby to empty nester like 50 years later. This is borderline creepy. It is like they are stalking you as you grow older. Okay, Nick, William Sonoma, you might have to sit down for this, Nick. William Snowma, you might have to sit down in a really nice love seat. William Sonoma has pottery buying. It has West Elm for babies, teens, college kids, post college. They got ad old furniture for when you finally have real money to buy, you know, real wooden furniture. Oh yeah. We've all had that

post-college apartment dilemma. Do you get the cheap fake IKEA furniture or the fancy, chic, West Endowment expensive furniture? If it's less than three years, you're going to be living there, you go with the IKEA like Schmurgendiburganza. More than three years, get the West Elm, that's the calculation we're offered. Or if you're our buddy Timmy, you just go with the IKEA because it's just easier. It's Timmy. He likes that more. We don't make investment advice. We do make Scons advice. Yes, we do. Now, here is the financial information you're going to want to know, Snackers. William Sinobas's total sales for all these home furnishing brands, barely slipped just 0.5% from February to March to April.

Right. That was the quarter. February to March to April. That is an incredible revenue performance when you consider that this is mid-coron economy. Which means Jack and I got to go to our tack bar and take off our COVID-19 questionnaire for retail companies. That's right. The six questions which determine your stock fortunes in COVID-19. The six questions that determineth thy COVID fate. All right, question number one, was William Sonoma wearing the cloak of essentiality. The answer is no, this was not considered an essential business. But question two, had William Sonoma invested big in e-commerce before COVID-19 hit? Oh yeah, it did. It invested big. We jumped into their investor presentation, and they said, and again, this is before COVID-19.

They called themselves a digital first company with retail stores as a competitive advantage. Bold move, let's see if it pays off for them, Codd. This sounds more like Caspur than restoration hardware. Casper's Digital First's got a few stores. Restoration's like physical first hardcore. But you know what? We were shocked they put on their millennial hat to act all like us, but online sales jumped 30% even though in-store sales got hammered for William Sonoma. The result is a 14% stock jump because investors were impressed on Friday. So Jack, what's the takeaway for our feng shuied buddies over at William Sonoma? Pimp yo Cribs is especially strong with white collar work from homers. Snackers, Pimpio Cribs, the mega trend we're predicting of people.

spending way more money on their home right now. Because you're spending way more time in your home during COVID-19 and way less time outside your home at work or going out. You're working from the couch, you start noticing, you know what, always kind of hated that CB2 Media Console over in the corner. So you upgrade it because you're spending like 300 hours a week at home instead of the 100 hours you used to spend. But the reality is not everyone has a luxury to pimp your crib.

Like if you got laid off or you're just trying to survive right now. But think about William Sonoma shoppers. Let's be honest, they're high end. They're still making money because they're just working from home and their income hasn't been disrupted. You need a second mortgage if you want the extra large size kitchen aid. Nick, charging billable hours is a very work from home-friendly way to make a living. So true, Jack. And William Sonoma customers, they are pimping your crib. They are Uber focused on their homes and apartments right now. Hence, the William Sonoma stock almost tripling from the low it hit on March 18th.

For our second story, Jack, debit or credit? Credit. Credit. Get those points, baby? Consumer spending is down, but savings are. shockingly up in April. And extra shockingly, the average American has more money today than before COVID-19. No joke. I kind of love this concept of extra shockingly. I think that should be the only type of shockingly, Jack. Webster's Dictionary, just unsubscribe from this podcast. Speaking of extra shocking, consumer spending is kind of like those, you know, snackers, you know the brown M&Ms of the economy. Open up the economic bag. There are more brown M&Ms than any other color. Early snack fact of the day. You're expecting to see blues. Maybe you want some

yellows, you're seeing mostly Browns. Now here's the issue. Spending by you and me, aka the Brown M&Ms, consumer spending, makes up two-thirds of all spending in the U.S. economy and therefore pays for two-thirds of our paychecks. Unfortunately, one thing here, Snackers, brown M&Ms kind of disappeared last month. Consumer spending in April dropped by 13.6%. There was a plummet in medical expenses because, you know, root canal or a coronavirus. Yeah, doctors weren't doing the root canals. They were kind of focused on coronavirus. of ours preparedness. Oh, and then of course you had your drop in spending at hotels and travel and haircuts and clothing at Cirque de Soleil, all that good stuff. And since consumer spending is

two-thirds of our economy, 13.6% drop means our economy got a lot smaller. But for every ying, there tends to be a yang, and there was a huge flip side here that fascinated Jack and I over the weekend. Savings in the United States rose by a giant record amount in the month of April. Americans are historically terrible savers. We're terrible savers, snackers. We are just awful at saving, the Germans are laughing at us. You've probably loaded up on 12 streaming services over the last week, and you don't even know what a 401k is. But in April, the savings rate in the U.S. actually hit 33%, which is by far a record. The translation for that is that for every buck of disposable income we get, we're saving 33 cents. Now, it makes sense. With such

insane uncertainty in the coronavirus, you might want to make a rainy day fund and save some few bucks. But when everyone's saving it like the exact same time, awkwardly not a great thing for the economy. It's great you canceled your Miami vacation to save some money, but Miami kind of needs your tourist dollars. Yeah, a lot of assaibo places wanted you getting assayebo. So Jack, what's the takeaway for our buddies over who are everybody in the economy? Shockingly, Americans' incomes have grown in the coronavirus. Snackers, 40 million Americans have been laid off, but the good news here, six million have been rehired in the last few weeks. But still, We have 34 million people still officially unemployed collecting checks because of COVID-19.

But get these numbers. The Commerce Department just announced that personal income surged by 10.5% in April. That's right. April, people were making more money on average than April the year before. So technically wages and salaries, those fell 8%. But government support, like way more than made up for that 8% drop. We're talking about the CARES Act, which is an acronym Nick and I don't know what it's doing. ends for. But it jacked up unemployment benefits to like 900 bucks a week and gave most of us $1,200 check. Oh, and then Snackers, we'll let you take a moment to digest here, but we want to throw one more fact right at you to serve up and eat up. This is an unbelievable stat. It's like the most tangible of them all. The Bank of America's CEO just announced that checking accounts at his bank

have 30 to 40% more money in them than they did 12 weeks ago. We're talking about like 100 million checking accounts that have more money, your money. I think in biology they call this reverse osmosis jack. Congress has done a good job so far, making sure that people don't go bankrupt because of this COVID-19 crisis. But now we just need a vaccine, some more testing and rehiring to be the final pieces in this recovery puzzle. For our third and final story, we got our almost unicorn of the day, masterclass, just raised $100 million to hit an $800 million valuation. words, learn from celebrities. Yes. Regardless of whether those celebrities can actually teach.

So true. I mean, why learn Greek philosophy from a professor? Masterclass is going to get Zeus to teach the thing. Masterclass is going to get Daniel Day Lewis to act like Zeus to teach it. Snackers, we're talking about the company that was started five years ago with a simple concept. Celebrities teach their craft via streaming video for a price. Now, there's nothing Jack and I like more. And this goes all the way back to our freshman college days than a good vendor. Diagram. Masterclass spans two beautiful ovals with a nice little overlap in there. One of them is entertainment. The other one, education. Kick it off with entertainment. Combine the Scorsese quality video production with celebrities who you probably have posters of on your wall. That's one key. The other

side is the education element. They then form these celebrities' teachings into pseudo-classes with a lesson plan, so you kind of feel academic and studious. And that nice overlap sweet spot is Masterclass. There's Nothing I love more than describing on a podcast, something that is much easier visual. And there is nothing more in love right now by consumers than ed tech and entertainment. Now, Masterclass has one revenue stream. It's the only profit poppy. On $180 a year membership, that pays for everything they're doing. This is like tuition so you can get unlimited lectures from celebrities streaming on your computer.

Love how they make it unlimited because you're probably not watching these toys. Very good point. The basic kind of lessons you're going to get Snackers with Masterclass is. It's like Christina Aguilera is going to teach you how to hit a high scene now. Samuel L. Jackson has a 21 chapter course on acting. And then Sarah Blakely, who is a legend, teaches entrepreneurship. She invented Spanx. Spoiler. Identify a problem, create a solution.

It's lessons one through six, basically. That's the master class. But the funny thing about master class is they also weave in some lessons that are a little bit more in the entertainment side because you kind of need to have these lessons in person. Serena Williams, can she really teach you tennis through a screen? Are you really bringing that iPad out to the tennis courts? So the Serena Williams Masterclass is more just like a YouTube video. You watch it for entertainment.

You're not going to actually play tennis in your living room. Masterclass is basically YouTube that put on some nice clothes. The most watched master class right now? Chris Voss. Yes, former FBI negotiator. He's doing a class. You can steal his negotiation strategies. So you know, you can gain leverage in life.

Before you know it, you're paying 25%. Your buddy's paying 75% of those two beers. You just got it at the box. Jack and I jumped in snack style. We tested a few of these out. We could use these negotiation tactics when dealing with their customer service. Masterclass has huge costs, but also a hugely growing revenue base. Sales doubled last year, but Jack, can you please tell us all what the user growth looks like in the coronavirus?

Masterclass's user growth has decoupled. Yes. Like whatever it used to be, it's 10 times more in the Corona economy. Ten times more. You're stuck at home? You're going to learn to play a violin like Yo-Yo Ma Masterclass. And according to people familiar with the matter, PFWTM, Yo-Yo Ma gets $100,000 up front from Masterclass for making these videos, plus 30% of all revenues it generates for perpetuity. Not too shabby. So, Jack, what's the takeaway for our buddies over at Masterclass? Masterclass's fundraise is for virtual reality masterclass, which is way behind schedule. Snackers, part of that $100 million master class just raised is to invest in augmented reality and virtual reality. Steph Curry teaching a crossover, it's going to work better if you have

huge VR goggles on your face. True. And you know what? Jack and I were thinking about it. There is no better moment for virtual reality than right now in the corona economy while you're at home. You just finish your sixth Zoom meeting of your day. The fourth Google hangout of the day, somebody's still got a Skype account. Do you really want to open up a video and watch another? No, you want a virtual reality version of whatever you're watching, whatever is teaching you. So virtual reality should be thriving right now. But sadly, the tech just isn't there. If the virtual reality was here, you'd be way more enjoying watching the Yankees versus Sox 2003 game 7 through a VR headset.

You could be in the bleacher seats with the bleacher creatures. Or you could go on virtual Airbnb vacates to the Sistine Chapel, but virtual reality isn't ready yet. VR, it's the ultimate fomo of Corona Economy. Jack, and you'll whip up the takeaways force to start the five-day work week. William Sonoma stock is a duvet cover away from an all-time high. White collar work from homers are pimping their own cribs. Consumer spending is way down in able to. but consumer savings are way up.

Americans have more money on average than before the crisis started. That is an incredible stat. I still can't believe. Insane. Third and final takeaway, Jack? Virtual reality will come to Masterclass in a year or two. Yeah, not too shabby about a year or too late for the Corona Economy moment. Now, time for our snack fact of the day.

This one messed with our heads. It's from Caleb Pierce in Lovely Longview, Texas. Andy's Mintz. You know those little things you get with the check whenever you dine out at the Olive Garden? You love them, and then you play with the green paper. You just kind of rub it around. It's really cool. They're quite pleasing.

They're like a peppermint paddy smushed into a little rectangular square. It's like the go-to dessert at Olive Garden, basically. Now, the company was created by a guy named Andy. Yeah, like Woody's owner and Toy Story. Yeah, like, and the name was Andy's, A&D-Y, apostrophe S, possessive because they were Andy's mitts. Then they did some research, and it turns out men are uncomfortable eating desserts named after another man. Doesn't make any sense. Jack and I eat candy and dessert from anyone. Nick and I will share a piece of pie any day. Susie's cakes? It could have been Sam's cakes. We will eat that dessert. So Andy's, to get men comfortable with his dessert, change the name to make it sound like the South American mountain range, the Andes. Spelled a little differently. Spelt a little differently. Sounds the same, Andes.

So the name is a complete fraud, just like Hogandau's ice cream, which is not a Dutch company. And we don't appreciate fraud. We appreciate sweets. If I go back to working at the Olive Garden, I'm not giving these out anymore. You're calling it Andes with an apostrophe. I know your style, Jack. Now, quick birthday shout out to Hillary. Your fiance, mani, great snacker. We love that you snack together. And also, happy birthday to John Parker.

We heard you and Clarissa, your wife, are having a baby due in July. That's beautiful. Rumor on the streets, the kid is already kicking the belly to the snacks intro. Early takeaway, we like this kid. Straight up, T-Boy. Thanks for kicking off June with Snacks Daily. If you have any buddies, which we hope you do, You better. Ask them HY HYSD.

Get them to have you had your snacks daily daily today. 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.