The Best One Yet - “Work From Home” is our Trend of the Day, and Mega Merger Monday happened -- Salesforce, Tableau, Raytheon, United Tech

Episode Date: June 11, 2019

Suddenly, it happened. Mega Merger Monday. Salesforce acquired Tableau to create the corporate starter kit of software, while Raytheon merged with United Technology to become the #2 player in the defense and weapons industry. And Zoom’s latest earnings report has us jumping into our “Trend of the Day”: Work from Home.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. This is snacks daily. It is Tuesday, June 11th, and this is the best one we've ever done. It was merger Monday. Didn't know what was coming. A nice little merger Monday. Total surprise.

You start your Mondays, you don't know what's going to hit you, and then what happened? Out of nowhere, two wild and bananas mergers. We're covering both of them in the pod, plus one extra. Bananas. I mean, they weren't expected out of there were bananas. When you hear the story, you'll know. Merger Monday. What we got you at?

The first one is Salesforce. It made its biggest acquisition ever, acquiring Seattle-based Tablo. Fun fact. Seattle is unofficially officially sales course's new HQ2. We'll also help you understand a little bit of what Salesforce is. Great nice, Seattle. A tough one. And they're getting a hockey team.

Second big merger is defense. Raytheon and United Technologies just basically became another NASA. Fun fact, both are based outside of Boston, just like everyone who went to a Nescat college. Yes. This is a very fun pod, by the way. Third and final, Jack, is the trend of the day, which is work from home. Zoom.

Yes. Video conferencing is delivering hard with a test. first earnings based on that trend. And it says a lot about whether you're going in for that, you know, critical meeting or you're going to dial the 1866 number from home. We all know what that means. Now, yesterday, President Trump was actually bragging about Silicon Valley. He said it's way better than China because they have geniuses who wear undershirts. We weren't sure about that. And are worth billions of dollars of ideas. We do know about is t-shirts because we all have that friend who's still wearing that startup t-shirt. T-shirt is the dress code in Silicon Valley. If you're not wearing it,

what are you doing? Venac optional. But they're not wearing anything over these T-shirts. They're not, but Jack and I decided to jump in snack style to identify the next fashion trend. Not washing your clothes. This is key. There are a bunch of travel shirt-related startups out there that are focused on getting you gear that you'd never have to wash. Now, if you have ever worn a cotton shirt, which is most of us, you're going to wash this thing frequently.

Otherwise, you get the coloration. But they're going away from cotton, and they're using some high-tech fibers. We're talking about t-shirts made out of seaweed fiber. Seweed. We're talking about t-shirts made out of wool hair small enough to be half-eastern. of a micron size of a human hair. Whatever that is, it's above my pay grade. Sounds nice. What I do know is that 17% of home water use in the United States is through the washing machine. And FASC company estimates that 90% of the clothes that you are wearing throughout the week

probably don't have to be washed for another week, and yet you're washing them. We really probably waste lots of resources with washing clothes. This is the next fashion trend, not washing your clothes. We just want to keep you guys in the loop. Let's be part of the solution, not part of the problem with seaweed. Listen to these key words and then let's hear our stories. In the snacks daily, we spoke to the lawyers. It snacks about to hear ain't food. It's air candy. They don't reflect the views of the Robin Hood 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. Robohood Financial, LLC, member FINRA slash SIPC.

For our first story, we've got merger number one up here. Salesforce just acquired Tableau for a cool $16 billion. And that's Salesforce's biggest acquisition yet, which is saying a lot for Salesforce. They've acquired like a bajillion company. And we all know Salesforce. Everyone talks about Salesforce. Not everyone knows what Salesforce does. Nick, walk us through.

I've never used it before. I'm clearly. You used to use it in my old job. Basically, Salesforce is where you put all the information internally about your company, it's prospects, sales, connecting with people, meetings, all that stuff. Your contacts, the meeting notes, how the meeting went. The people like to say, if a meeting notes didn't go into Salesforce, then the meeting didn't happen.

And that is the worst thing to hear. Because that means their whole afternoon is putting in notes. Employees who use Salesforce hate it because you are spending your whole afternoon putting notes. Companies love it, though. Because if you ditch and go to another company, they have like your entire brain's artifacts. Salesforce users out there know exactly what we're talking about. Jack, can you walk us through the acquiree though?

Yes, the little tab below worth $16 billion. It is a data visualization company. Sounds fancy. Do I put this on the Christmas list? Well, let's bring a little context here. companies are creating like an insane amount. We're talking mountains of data these days. Yeah, every day you're filling up like three Amazon Web Services servers full of data.

So what's Tableau doing? Tablo will make you feel like your Gandalf. Okay. If your boss comes to your office, Nick, it's like, hey, Nick, can you crunch the numbers from the Pacific Northwest region? Yeah, boom, get me my stick magic in like a eight ball situation. Or you can grab Tableau. Take like the data set you got, upload it into Tablo, and it converts it.

transforms it into nice looking charts, beautiful graphs, super sexy. Maybe a map with colors that actually mean something. Not like a browns and dark blues and grays. We're talking like bright colors people actually want to look at. You're going to impress with these tableau charts. Magic. Fake it till you make it. People are going to say, wow, Joe in accounting is analytical and an artist when it comes

to this table. Tableau will make you look smarter. So the stock of Tableau rose 34% yesterday because it was valued at $12 billion last week. But now Salesforce is paying $6.000. 16 billion. Now, when we saw this, we decided to research a little further, and we've noticed a trend here, Jack and I, which is that corporations have a corporate starter kit these days. The starter kit is a bunch of SaaS companies, software as a service. These are tech companies that offer monthly subscriptions. You sign up for them. They make your company run smoothly.

You pay every month. You forget about it. So basically corporations are like, you know what, I need these SaaS companies. They're staples. They're like a staple in your wardrobe. Think like little black dress or like Oxford shirt. Yes. Penny loafers. Oh, yeah. Sneakers, you know, everyone has the sneakers they run in. And then the sneakers that like, you know, they wear to look cool in.

Staple number one is Slack, which is trying to replace email. Staple number two is Google Docs, which is trying to replace calendars, word, Excel, and basically meetings. Everything. Now, you might think to yourself, I still use Microsoft Office at my job. You might, but Google is coming. It's aiming at you. The third staple is Amazon Web Services, which is replacing computer servers. And then Salesforce is coming and saying, hey, I want to replace your notebooks, your old

X and your brain and your salespeople. So, Jack, what's the takeaway for our buddies over at Salesforce and Tabelo now merged? When every company is a tech company, data is king. Rule number one of acting like a tech company is dropping the line data-driven decision-making as much as possible. We came up with the idea because the data backed it up. Yeah. What did the data say over there?

Can we make a data decision based on this? Rule number two, drop in the phrase TLDR. Let's TLDR this after the meeting. Now, two data-com. companies have been acquired in the past two weeks in a big way. Tabloe yesterday and Looker got acquired by Google last week, which is also a data analytics company. The reason these data analytics companies are so attractive to non-tech companies is because they take care of all the data in a sexy way. Non-tech companies need help if they're going to act like a tech company. And when every company

wants to become a techish kind of company, data is king. For our second story, let's jump into merger number two. It just created a freakish Terminator company out of what two companies. Raytheon and United Technologies. Now, not two. creative on the name here? Well, if you've never heard of these companies, it's basically Stark Industries and Wayne Enterprises getting together. Meeting up. And the new company is going to be called Raytheon Technologies. They just took one of the other. The old hyphenated last name situation. Like your friend like Jonathan Taylor-Tonis, right? Legend. From Boy Meetswell. Mia Leoplapp. And you just add those names together. So the headquarters

are going to remain in Boston, which is where Raytheon is based. Now, slight asterisk here is that the government has to approve this merger. It's a really big one between a couple publicly traded companies. Yeah, but the two companies are getting ready to lobby hard. Their PR teams are working at it already. Yeah, they've clearly been thinking about this. They set up a website called Future of Aerospace Defense.com, which tries to convince us all why this will be so good for society. Now, in terms of who we're covering here, these are two defense companies. Yeah, aerospace and defense, not companies we typically cover on this podcast. No, we hit a lot of the Lou Lemon Sweatwicking gear, you know, but not companies. Not many of our listeners are buying Tomahawk missiles. No, but these two companies, we're not. But these two

companies kind of specialize in that area of expertise. And this is a fascinating story. So Raytheon is the Defense Company and United is the aerospace company. Right. Raytheon makes Tomahawk cruise missiles, which are the first weapons typically fired by the Navy on like aircraft carriers during conflict. And United is pumping out basically the engines to planes like on the F-35, which is considered like the stealthiest of fighter jets out there. Yeah. And they also produce engines for airbus as non-fighter jets as well. And those engines are called Pratt and Whitt. So if you're looking at the defense industry, what's interesting and unique about it is that it tends to have a very particular type of customer. Its main customer is the United States government. So the health and stability

in the sector is kind of dependent on what's going on with global affairs. And global affairs are looking a little rocky. People aren't inviting each other to their weddings right now, so to speak. Which for defense companies could mean more sales. Yeah. The interesting thing that makes this relatable to you and me, defense innovations can end up in your home. Let's jump it to Raytheon for a second. It is the company that received the first ever GPS signal in the world. We haven't used the word GPS since we had like an actual big, dungly GPS thing in our car. And you know what we're talking about. Global positioning systems.

It started in defense and then it became mainstream. It was also the first company to like send a photo via satellite, which we're now doing all the time all day. That began with Raytheon. And United Technologies actually invented the microwave. Very nice. Which GE then took and put in everybody's kitchen in the world. To make annoying noises and kind of make your food feel not as fully cooked. So, Jack, what's the takeaway for our buddies over at Raytheon United?

This deal could actually impact Boeing. Boeing. Boeing. The leader in the aerospace business, it's enjoying like $101 billion in annual revenue. It's head and shoulders ahead of the competition, but if United and Raytheon merge, they'll have $74 billion, which is not that far behind as number two. And number three is pretty far behind. It's Lockheed Martin, which has about half as much as Boeing in annual revenue.

So together, Raytheon and United Tech can keep Boeing honest because they're like just as good as Boeing. Let's say the Belgian government is acquiring fighter jets and it needs to turn to a contractor. It's not going to just have Boeing at the table. It'll have another big company. Another hefty one. Now, this is pretty counterintuitive because consolidation actually can create more competition in this case. Usually it doesn't. Usually consolidation hurts competition, but it could create a real competitor to Boeing. Our third and final story here, our trend of the day, and it's the work from home future. I love this trend. Jack's not even wearing pants for this thing. Don't have to brush my hair. Don't have to wash my face.

Zoom. Zoom, the teleconferencing company, it's embracing this thing hard. Zoom video conferencing stock is up 30% since last week when it's had its first earnings report as a publicly traded company. Quick reminder here, Zoom is like video conferencing that's trying to just do it better than a lot of people. And apparently it is because its stock's been performing so well. What I think is most interesting here is the kicker here is that what they got on their website. The way they described this.

Human proof conferencing? We all know what that means. I like that. It means humans mess up video conferencing. A lot. Zoom fixes that for you. Debbie, we can hear. you crunching on the hard tacos there. Please move yourself? Yeah, and we noticed you already turned off

your video, so we didn't see your tacos. Shocker. Oh, and by the way, the 12-digit passcode situation, no one can remember those things. You've got to use the pound in England. They call it a hash. Now let's go to John for the key part. We can't hear you, John. You're going to have to turn up the volume. So Zoom is fixing this despite some heavy, heavy tech competition. You got WebEx from Cisco. You got Hangouts from Google. You got Skype from Microsoft. That's a pretty serious competition. What a lineup. So how did Zoom do in its first earnings report? It crushed it. Revenues jumped by 109% in the first quarter. To what number? 122 million. Now that's a big number. A smaller number, but very adorable number is the profit.

This is a profitable tech company. Profitable tech company is always good. It was a small profit. $200,000. And guess what? Zoom is doing way better than its freshman IPO buddy Lyft, which I payout around the same time. It's worth about 50% more. If you want to jump into this work from home trend, it's really interesting because according to a recent Gallup poll, the proportion of Americans doing some are all work from home, it's almost half. Now, that's either depressing because people can't unplug from work, or it's awesome because they're letting you work from home. And you can unplug from work. So another anecdote here, 58% of Dell's employees in Texas already work one day a week from home. And then you got companies like WordPress, which is like 500 employees in 50 countries.

Clearly they're working from home. Those aren't like WordPress offices. Now, the company gets some benefits by letting their employees work from home. First, more access to talent wherever they live. You can retain talent because work from home is awesome. You know, they're pants. And your office can be like smaller and you don't have to spend as much on desks. Yeah, you're not going to give people free Greek yogurts that they're not in the office. Now, employees benefit too because you're more productive, again, with the pants, you've got a better schedule and there's no commute. You're not stuck in traffic. Now, top cities where most of the jobs are these days are incredibly expensive. So work from home can alleviate that as well. But it's not perfect.

It's not perfect. You get less team morale. You get less, you know, office cakes for so-and-so's birthday. Fewer office parties. And you're never going to meet Debbie from logistics. Also, the company's softball team will suffer with more work from home. This is a key problem. Now, Zoom is focused on that problem because it's solving the core issue, which is before you can let anyone work from home, you need the technology to do it. And it is providing that technology. Last quarter, the number of customers with 10 or more people logging into Zoom hit 58,000. That's a lot of paying costs. It's double from the same period last year. So, Jack, what's the takeaway for our buddies over at Zoom who are enabling work-from-home trends? Yeah, this trend we're talking about, it doesn't just affect one thing. No, video conferencing is step number one in order to make work from home possible, but the trend involves a lot more influences.

Yeah, what else could benefit from work from home? Well, if you're working from home, you're not only not wearing pants, you're dressing more casually. Yeah. Goldman just relax their standards for working at work. If you're working from home, you don't need a suit. And you're not jumping in the company lunch line. you got to get some food. Maybe Uber Eats could benefit for this thing. And so that's on the food delivery side. And then if you're working from home, you're going to have to connect in to everything. That means you're going to be business quality Wi-Fi.

True. You need good internet. Think creatively people. How about comfortable work chairs? Very true. House remodeling? Maybe you have to build out one of those kind of spaces so you can actually work in a section of the home. The work from home trend can affect more than just Zoom. And you got to look for that in any trend. Jack, can you whip out the takeaways for us over here? I'm on it. Raytheon Technologies is the new Boeing. consolidation could create like a red socks to Boeing's Yankees. Nicely done, Northeast trend there. Salesforce acquired tableau so it can make every company feel like a tech company. And now you're going to start noticing this software, corporate, like wardrobe staplesing situation. Third and final story, Zoom is loving your company's flexible work from home policy. And snackers know that you don't just identify the trend. You'll look at what else it's affecting.

Now, time for our snack fact of the day. This one tweeted in by Monta Thigpin. Yeah, it was triggered by yesterday's. story about Aldi's, the German grocery chain, and he noted that the Aldi family, known as the Albrecht. And most people don't realize this, even though you're probably there yesterday, they own Trader Joe's, the American also discount chain. Trader Joe's isn't living its own separate life. It's got a little connection. Nicely done. Also, quick correction from the Aldi story. We got to mention this. A couple of snackers reached out to us, Kim Gonzalez and Manuel Zavala,

that Aldi actually does carry LaCroi. We had said Aldi doesn't carry LeCroy. They're like mid-Lacroy correcting us and we appreciate you guys letting us now. LaCroy gets a lot of airtime on this. It's getting a little too much airtime. A couple of the great stories yesterday. Check out our snacks newsletter to learn about Quivie, which stands for quick bites. It just announced new details on its streaming video service. And then we got Starbucks, which is testing out reusable cups at a specific location. In England. So, I know. I wish I could try. Give us a shout at this Starbucks. We're right here for you. Merger Monday was great. Be back with us tomorrow to see Terrible Tuesday. Who knows? We have no idea. Probably not as many mergers. We will be with you.

with you tomorrow morning on it. 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.