The Best One Yet - 🍸 “What happens at Cosmo” — Merck’s Covid pill. Vegas’ $5.7B Cosmopolitan. Ozy’s Fyre Fest.

Episode Date: October 4, 2021

Merck jumped 16% on word it may have created a Covid-crushing pill, then its stock created a Corporate Conga Line. The Cosmopolitan Hotel in Vegas sold for $5.7B and the winners are bach parties and Blackstone Private Equity. And Ozy is the media startup getting all the attention right now for all the wrong reasons.$BX $GS $MRKGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn 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, October 40. Today's pod. Yes. Is the best one yet.

Wait, Jack, don't you're not going to get out of this. How is the apple picking? How did the apple picking go? I'll tell you, we transformed those apples into an apple crisp. I hear you don't pick the apple. The apple picks you. It's actually early season for apple picking. So I did pick the low-hanging fruit.

There we. When you're wearing flannel, the apples jump off the tree. For our first star, Snackers. Merck. Stock jumped 10% on word they have a COVID pill. Not a COVID vaccine, a pill. And then Merck stock created a corporate conga line across the entire stock market. For our second story, the Cosmopolitan Hotel in Las Vegas. Just sold for nearly $6 billion. So the winners we're seeing our bachelor parties, vodka Red Bull and Blackstone private equity. For our third and final story, Ozzie is a news media startup that's getting a lot of press for all the wrong reasons. Yeah,

Ozzie, they just, they pulled the level three fire festival. But before we hit that fantastic mix of stories, honestly, Jack, a fantastic mix to start the week. I'm opening it up to the hoarder's almanac week 81. Yeah, great page, Jack. Horters Almanac, things were running out of because of the pandemic. We've been keeping track. The latest item is mail, the stuff in your mailbox. Technically, we're not running out of mail, but mail is getting slower, like a lot slower.

It's week 81 in the Harder's Almanac. Nick and I have to reach for. Actually, it's officially getting slower. That's what we noticed. True. Whether it's letters, magazines, or random coupons to overstock.com you didn't ask for. You know who you are. And all this mail, it's going to take twice as long to get to you, like starting this week.

That's right. Starting this week, the U.S. Postal Service, four out of ten items they deliver will take twice as long to get to you. Yeah. So like your pen pal's postcard, that three-day trip it usually takes is now a six-day journey. Love requires patience. It does. So do love letters now.

You may want to text the person is what we're thinking. Now, this is controversial because it actually slows the average male down to levels we haven't seen since 1972. True story. The mail now, it's at 1972 speeds. Used to be snail mail. Now it's slug mail. And according to the postmaster general, this is actually a good thing according to him. He says slower mail means more accurate delivery.

Can we get a translation in aisle six? This problem is actually a solution because it fixes a problem. I actually didn't know inaccurate delivery was a problem. That makes so little sense. It almost makes too much sense. It's also a money thing. They're trying to save some cash because Newman's asking for a rain. So Snackers, the way we see it, we're running out a fast mail, which was already slow.

But it's better than no mail. And to quote Newman, there is no such thing as junk mail. Let's hit our three stories. You're tuned in to snacks daily. We spoke to the lawyers and we got to go. It's something legal out the way. It snacks about to hear 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. Right. Snacks is digestible. Business news for you.

Robahood Financial, LLC, member Fenra slash SIPC. For our first story, Merck, it stock just jumped 10% Because they whipped up a COVID pill. We repeat, a COVID pill. It's not what Merck stock did. It's who danced with Merck's stock. Sounds like a lot of fun. But Merck, founded in 1668.

Yeah, that's 1668. We're talking 17th century. M-E-R-C-K. And Nick, you should say, 16008-Zexi. I thought that's what I said. Isn't that what I just said? Because this was founded by a man named Merck,

a German pharmacist. World War I happened. and then the United States. Yeah, that made things awkward. The USA expropriated. That's the T's over here. Google that word. Expropriated the U.S. business of Merck,

the German-based multinational pharmaceutical company. Now the U.S. part of Merck is worth a hefty $200 billion. That's like 10 lists. And they're based in lovely New Jersey. That's right. They've been operating as two companies ever since. But there's a problem for Merck going on, Jack. The stock hasn't moved all year, even though this is the year of the vaccine.

They've been left out of the vaccine. party. Boom. Merck apparently heard that, got upset, and showed up to play on Friday before the weekend. They missed out on the Vax, but they started working on a pill instead. And Merck stock jumped 16% Friday on quote unquote positive results from their groundbreaking COVID pill. The new Merck pill. It's called Molna Perivar. And it's named that because all drugs apparently have to sound like a Latin crossword puzzle. This new pill could be authorized by the FDA in just weeks. And the U.S. has already pre-ordered like a Tesla, 2 million doses. There we go.

Early results so far, they were strong. They were so strong for this new Merck pill. That Merck actually canceled the test early. They stopped it early. I can't think of the right analogy for what that's like. Bold strategy cotton. Let's see if it works out for it. Here's what happened.

775 unvaccinated people who caught COVID and were high risk of complications volunteered to participate in this test. So we're talking about like the most vulnerable of the most vulnerable who got COVID doing this test of a COVID pill. And this is how scientific experiments work. Half got the real pill that Merck was testing out. And half got something that looked like the real pill, but was really just a sugar pill. Well, Jack, can you whip up the results for us over there? Those who took the fake pill, they ended up hospitalized or dying 14% of the time.

Those who took the real pill, only 7% ended up in the hospital. or perish. Ipso facto, this new Merck COVID pill, reduce the chances you go to the hospital or die because of COVID by a whopping 50%. Now, to be clear, vaccines are still critical. Vaccines are the preventive care, which is key to health care efficiency. Preventive care is how you stop disease. This Merck pill is kind of like a last lifeline with Regis thing.

Preventive care like vaccines is how you don't get sick. Yeah. This pill is how you don't die if you. already got sick. So Jack, what's the takeaway for our buddies kicking over three centuries over at Merck? Merck stock just created a corporate conglom. Snackers, Merck's life-saving results, they kicked off a conga line because everyone started dancing right after Merck made one single news announcement. That's right. It wasn't just Merck stock that jumped 16%. Stalks all over the market went up, up, up. We're talking Delta Airlines up 7%. Norwegian cruises up like 7%. It's not just the

reopening stocks that are hoping for the end of the pandemic. The overall market jumped by over 1% on Friday. Hilton hotel stock jumped 5%. Live nation concerts surged you on Friday. Now, this was an outlier. Vaccine stocks like Moderna, they fell. I guess on thoughts that like this could end the pandemic quicker. Yeah, kind of interesting, but kind of strange too.

Moderna fell 12% because potentially people may take fewer vaccines if they have this option, even though they shouldn't. Not totally clear. But Merck set off a wave of Dan. that spanned stock market industries. Merck, it kicked off a corporate conga line. For our second story, the Cosmopolitan Hotel in Las Vegas, it just sold this single hotel for $5.7 billion with a B dollars.

Deutsche Bank lost, Blackstone won. Congratulations. And Las Vegas gets a vote of confidence. Yeah, and this story, I mean, is this spot on repeat or something? We're going back to 1999 now to Deutsche Bank. Which is German for German bank. It's a highly creative group over that. Seriously.

Yeah. Well, 1999 is when Deutsche Bank reached out to America and entered the U.S. market. And just like any German tourist, Deutsche Bank, they went to Vegas. That's what they did first. So Deutsche started by financing casinos. And some of the casinos they financed went belly up, including the cosmopolitan, which Deutsche seized in foreclosure because they had like more nightclubs than they had rooms, basically. So suddenly Deutsche Bank is in America and they're not banking a casino like they initially planned.

They're running a Las Vegas hotel casino. Literally pulled cash out of their fanny packs to pay for the thing. So Deutsche Bank figures out how to open the hotel that was under construction in 2009 at a total cost of $3.9 billion. Okay. So they spent $3.9 billion. But then five years later, Deutsche Bank sold this hotel for $1.7 billion. So just like other German tourists in Vegas, They lost money.

They did. They lost at least $2 billion on a single hotel in Vegas. What happens in Vegas affects you for the rest of your life. So with every seller, there's a buyer. And the buyer of the cosmopolitan in 2014 was Blackstone, a publicly traded investment company. And this is where things get kicked up a notch. In 2014, Blackstone, they're looking around the table.

They're hanging out with their buddies. And they're like, hey, wait a second. This Cosmo Hotel, it's got some good bones. So they dropped $1.7 billion thinking they could turn it into something even more. So now that they own the hotel, Blackstone goes a little crazy on the new drapes. They invested $500 million to build out 67 new rooms and sweets and renovate all 3,000 rooms in this one hotel. That's quite a big Home Depot bill, Nick. It is.

They had like 12-star restaurants and a dessert-only bar, the birthday truffles. Do you remember the birthday travels? They're fantastic. Oh, from milk bar? How do you stop eating them after three? That wasn't it, though. It wasn't just fixing things up with hammers and nails and milk bar desserts. Uh-uh.

Wall-to-wall tiger carpeting. Blackstone also invested a bunch of time and effort to settle a dispute with the labor union. Yeah, 2,000 bartenders, hotel staff. They wanted better paying benefits for dealing with all the hotel guests who were complaining about their mojitos. And it all paid off for Blackstone. Seven years after their initial $1.7 billion investment and spending another half billion in upgrades and spending a bunch of time on labor negotiations. Yeah, Jack, I like where you go.

I feel like you're building momentum here. I think you should carry this. Blackstone just last week sold the Cosmopolitan Hotel for $5.7 billion. We got ourselves a winner. Jack, can you whip up the scoreboard for us going on over in Vegas? Deutsche Bank lost at least $2 billion with their involvement with a Cosmopolitan hotel. But on the other side of the same coin, the exact same property, Blackstone made over three billion dollars in profit. This is every home flipper's dream. So Jack, what's the, this is bigger than any

home flipper's dream. This is where the home flipper goes after they flip their home. So Jack, what's the takeaway for our buddies over at Blackstone? Big money is giving Las Vegas a vote of confidence. All right, Snackers, let's think about the gambling situation these days. Ads for betting apps, they are dominating your Sunday NFL ritual watching. And you might also see ads for iCasinos, a bold new industry of casino-style gambling games, but all within your app. And conventions, which were also a huge source of business for Las Vegas casinos and hotels, they are at total risk of disappearing from work from home and Zoom. Maurice doesn't need to fly to the Sales Rep Expo on the Las Vegas Strip anymore.

But despite everything we just said, which works against Vegas, MGM International just splurged nearly $6 billion to buy another hotel in Vegas. Vegas. And that hotel was the cosmopolitan. There we go. And maybe the reason why MGM is buying that hotel, 3.3 million tourists went to Vegas this July, just two months ago. They're not all German, and that's just 10% lower than the amount of tourists who went in July right before the pandemic in 2019. That's why big money is betting on the betting capital of the world. For our third and final story, digital news media startup, Ozzy. They just pulled a level three fire festival. in all of us. Ozzy rhymes with Theranos and journalism outed both of those financial scandals.

First, we should sprinkle on a little context here, Jack. Big tech has caused the age of mini-media. That's right. As newspapers lost out on readership and ad revenue to Facebook, new media news startups have emerged. Yeah, you got Axios and Vox. You got the athletic and the information. Another couple mini-media startups out there. Those mini-media startups hired journalists and changed the business model of news for the digital age. Well, just like those other mini-media startups, along came Ozzy, which basically trying to do the same thing. Lean, small, mini-media, big impact. That's right.

They launched YouTube videos, podcasts, and email newsletters starting in 2013. The trajectory of Ozzy, it kind of totally changed on a single conference call in February. Right. The C-O-O-O-O-O-Sie and the co-founder, Samir Rao, was on a conference call. Or was he? Yeah, he was chatting with potential investors because Ozzy, you know, they want to raise money. They're trying to raise $40 million. And they're talking to Goldman Sachs because they want to further their growth,

pump out more videos. And Goldman Sachs was interested in Ozzy's video future because video is a lucrative area. So, Ozzie was keen to highlight their relationship with YouTube. On YouTube, Ozzy, they claimed was making millions of views, getting millions of ad dollars, pretty important to hear if an investor is on the other side of the table. Put that in the pitch deck. So Goldman Sachs is sitting on their seats waiting to hear details about YouTube. And then last second, Samir Ravis.

Rove, cough, cough. Decides to change the meeting from the Zoom, which everyone was already logged into. And they said, can you hang up? I'm struggling to log in. Can we make this a conference call instead? Yeah, the classic, everyone's got their resting Zoom faces going on. But now, great. Everyone's like, all right, all I have to do is talk.

I don't even have to be wearing a shirt right now. And the reason, apparently, that Mr. Rau wanted to switch from Zoom to a phone call is that he needed to pretend to be someone else. Which is a whole lot easier if they can't see your face on the Zoom call. So Samir Rao proceeded to pretend to be a YouTube executive. And with his fake voice, he claimed that Ozzy is a star when it comes to YouTube videos. This is Todd. This is definitely not Samir.

That conference call was in February. And YouTube found out that someone was impersonating their executive and did an investigation. Basically, the head of this company, Ozzie, pulled to Jamie Kennedy. I don't know that reference. Oh, he had like this show a few years ago where he would like wear masks with someone else. Trick people. Nice. It's called the Jamie Kennedy experiment.

So seven months later was last week. And we got a bombshell report from New York Times reporter Ben Smith, highlighting all the details that we just told you. Yeah, Jack and I'm looking at this. And here's what everyone's wondering. If Ozzy's co-founder lied in that meeting, that conference call, what else has he been untruthful about over like years? And it's not just us thinking that.

Last week, report after report of the fallout at Ozzie. And then Ozzy basically fell apart like a venture-backed Firefest. First, advertisers froze their spending on Ozzy's platforms. Yeah. And then respected Aussie journalists, they had to bounce. They resigned. They left. And then investors in Ozzy, the private stock, tried to sell out like, I want out.

I mean, have you ever seen this? I've never heard of that happening in venture. And then as Nick and I were preparing for this story. Five minutes ago. This happened five minutes ago live on this podcast. Nick gets a buzz on his phone from the New York Times. Ozzie is shutting down. So, Jack, what's the takeaway for our buddies over at Ozzy?

Journalism is the other regulator. Yeah, Snackers, the way we're seeing this, the SEC, they're the police of the stock market. The SEC forces companies to be honest and transparent and punishes companies that aren't. Well, the SEC, the Securities and Exchange Commission, their regulation forced WeWork to expose who We Work really was when We Work filed to IPO back in 2018. And the SEC's regulation results. in WeWork canceling their IPO back then, which probably saved a bunch of retail investors, a bunch of huge losses on WeWork stock.

Well, as Jack and I were researching the story, this is what came to us. Journalism, it acts like the other regulator in the same situations. It's such a good call because sometimes journalism catches stuff before the SEC does. For example, Theranos and now Ozzy, both startups crumbled thanks to the Wall Street Journal in New York Times Journalism. Especially for private companies, journalism can act. act like the early police. So look, many people have sadly suffered over at Ozzy, but many more may have avoided suffering thanks to this reporting, which accelerated Aussie's demise

like five minutes ago. Journalism is the other regulator. Jack, can you whip up the Granny Smith takeaways for us over there? Merck invented a pill that appears to reduce death and hospitalization after getting COVID by 50%. The real winter here, it triggered a conga dance stock market-wide. For our second story, Deutsche Bank lost in Blackstone One with the Cosmopolitan Hotel. And MGM, they're bedding on Vegas. For our third and final story, Ozzy is over after some highly untruthful shenanigans. Journalism, it's the other regulator. Now, time for our snack fact of the day.

This one sent in by an attackman with a fierce right arm who can also go to his left. Aidan Lazarus, aka the Wolf of Skybrook from lovely Charlotte, North Carolina. Aden, Nick's AOL screen name was Faceoff Guy 20. So he knows what he's talking about. Don't know why he's past tense, Jack. Still got it. Now, this snack fact is about the origin of the sport lacrosse, America's oldest sport going all the way back to the Iroquois tribes.

Snacks fact of the day, the Urquois are the originators of the modern day of lacrosse. The Urquois names for themselves as a haunted, which means people of the Longhouse. The Longhouse symbolizes a way to fly for the six nations, Confederacy, live under one common law. Think with one mind to speak with one voice. Did you also know that baseball copied one of the original lacrosse balls from the Six Nations? And the lacrosse is the most popular sport in Canada. Bonus snack fact, Aiden is the MVS of this Snacks Daily.

Absolutely. Aidan, waball all day. Wawball all day. Most valuable snackers. Snackers, you look fantastic today, Jack. The apple pies travel in the mail. That's all I'm going to say. Cortland's my favorite. I'll take care of you, Nick.

I'll take care of you. I appreciate you taking care. We'll see you tomorrow, Snackers. H-Y-H-Y-Y-Y-S-D. And before we go, happy birthday to Damani Douglas from West Hartford, Connecticut. And Taylor Martinez,

happy 24th in San Ramo. Melissa Hong, happy birthday down in Los Angeles. Randy Yeager in beautiful Norman, Oklahoma. Happy birthday. Delzzie, celebrate that birthday down in Miramar. Okay, Chesa is just

snacking fanatically. In New York City, we wanted to give her a shout. Across the entire city, apparently, Jack. Anybody else celebrate. something today, make it a T-Poy. Celebrate the wins.

Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors who are associated persons of Robin Hood Financial LLC and do not reflect the views of Robin Hood Markets, or any of its subsidiaries or affiliates. They are meant for informational purposes only and are not a recommendation to buy or sell any security, cryptocurrency, or investment strategy in any account. This is not an offer or sale of a security, not a research report and is not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinood Markets Inc.,

Robintov Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk, including loss of principle and past performance, does not guarantee future results. Robin Hood Financial LLC, member FINRA, SIPC. Is that an all-time T-boy? Ch-ching! That was a T-boy. Wow.

That was really good. That was something. That was something.