The Best One Yet - “You, me, some guy, and Oprah” – Clubhouse hits $1B. Latch’s public key. WWE’s micro-stream fail.

Episode Date: January 26, 2021

Clubhouse has become the only unicorn you can’t see, only hear. Latch is going public to open your door (literally), but the money is in the software. And we’ve got the 2nd failure of the Streaming Wars (after Quibi): World Wrestling Entertainment.$TSIA $CMCSAGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn 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 is Tuesday, T-Boy Tuesday, January 26. Happy T-Boy Tuesday, Snackers. I'm potting right now from a brand new standing desk, by the way. So if my voice sounds better, you know why. Are you not using any books on this thing? What about our stack of books? I thought that was our thing. Nope, I've graduated beyond that, Nick. Okay, it's a new thing. Snackers, this is the best one yet. For our first story, Clubhouse, just hit a billion dollar valuation. The only unicorn you can hear, but you can't see. For our second story, Latch, is going public as a traded stock to open up some doors. Best part about this company, that is what they do.

That is their business. They open doors. They open doors, literally. Third and final story, we've got the very second failure of the streaming wars after Quibi. Jack, WWW World Wrestling Entertainment, 2014 through 2021. Before we hit those three fantastic stories, on this T-Boy Tuesday, we want to ask you a question. Jack, have you heard of Stalant? No, but apparently it's the merger of Fiat, Chrysler, and Peugeot. They decided to call themselves

collectively Stalantus. It sounds like a prescription drug that advertises on NPR and helps you with your sleep. If you can't sleep, try Stalantis. Well, Stalantis, Jack and I jumped in snack style. It's actually a Latin word that those three car companies completely made up to be their new name. It's a made-up Latin word because Stello apparently means to brighten with stars in Latin. So Jack and I have noticed a trend here. Apparently, whipping out the old Latin textbooks for your new corporate name is a new thing. Yes, Mondalise, the apparent company of Oreos cookies, also has a Latin textbook. Yes, it does. They came up with the name Mondalise because Monda from Latin for World and Deliz is Latin for a fanciful expression of delicious. Nick,

that's not it. Verizon. Yeah. Panera, check. Venmo. Okay. Axios. I'm following you. They're all friends of Aristotle. Jack, apparently all you got to do these days to make your company come to life is combine a couple prefixes from a dead language. Full disclosure, hackers, Nick and I never took Latin in college or high school. If so facto, if you did and you're a snacker who happened to be named Caesar, what other companies could we be renaming these days? On this T-Boy Tuesday, we are making a call to action. We want to know what company should change their name to something randomly Latin. At Robin and Snacks, tweet us, let us know we want to know today. Make this T-Boy Tuesday, TMD-Y.

The Maximus Diem yet. Let's hit our three stories. You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal out the way. The 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.

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 FINRA slash SIPC. For our first story, Clubhouse just reportedly hit a $1 billion valuation, freshest unicorn out there. Nick, they brought in a billion dollars of capital, but zero dollars of money.

Jack, they say your first dollar is the hardest dollar? Well, the first dollar of sales. Because for Clubhouse Snackers, we got to go back to May 2020. almost a year ago, when this social media product hit in a million dollar valuation with only 1500 users. 1,500 users is a generously sized college lunch cafeteria. Yes, it is. It's like the raddy or Jack, what would you say?

Buy Hall? Ross Dining Hall, but Nick, we covered it even back then on Snacks Daily. We did, and that's why there was this one particular quote from one of their investors at the time that was incredibly prescient. Clubhouse will either be dead in July, which was just two months away at the time, or it'll be something big. Well, Jack, it's January, so Clubhouse is, I guess, something big, two million users.

It is the audio-only social media company. It's basically a picture of live podcast meets a classroom. It's an awkward networking convention kind of a thing. When you open up this app, you'll see rooms that you can walk into and listen to out on conversations. For example, one room might be labeled how to get a job at Facebook. Yeah. Which Facebook people apparently tell you how you can work a job at Facebook.

Or you can jump into, is Kevin Hart actually funny in which? which you can talk to Kevin Hart about whether or not he is actually funny. He tries to show by doing in that room. There are a lot of room options here. Basically, in any room, it's going to be you. It's going to be eight other people. One of them's going to be unemployed. One of them may be Oprah. Sounds like a hoot. And then the San Francisco AG pops in just to say hello. No big deal. Yeah. Issue here, though, apparently a lot of these rooms, some of them have had some questionable content, and they've had issues with this in the past. That's a big reason they're raising money right now to hire content moderators to shut down the rooms that shouldn't be going down.

Okay, so that's what's going on at Clubhouse right now. But here's what Jack and I find fascinating about Clubhouse. They've reached 2 million users the hardest possible way, basically while hopping on one foot with their hands behind their back blindfolded. First way, they made their lives incredibly harder to grow. They decided to go with the invite-only route. Forced exclusivity has driven demand. This reminds us of Facebook in the mid-2000s when you needed Middlebury.

EDU to finally sign up. Do your cousin have a friend who happens to go to University of Albany? Nick, I have this prom picture. I've been dying to upload to my fresh Facebook account. So exclusivity was like their first driver of growth, but also kind of a challenge. The second thing that's pretty wild here is that Clubhouse is iPhone only. Bear in mind Snackers, 80% of the world smartphones run on Android, which is not an iPhone. So despite being invite only, and despite being iPhone only, Clubhouse

has managed to hit 2 million users. So Jack, what's the takeaway for our buddies over at Clubhouse? Snapchat, TikTok, YouTube, and Instagram. They're all fighting for the same social media creators, but Clubhouse isn't. And remember, creators are the content. Content is the king. But Clubhouse, it isn't profitable. And Clubhouse hasn't even generated a single dollar of revenue yet.

There are testing ways to bring in their first buck, including a tip feature so that you can tip Kevin Hart for hosting that really funny room in which he proved on Clubhouse that he actually is funny. Kind of meta. But Jack and I have jumped in snack style to Clubhouse, and what we've noticed

is that the content is educational. So we think the answer is actually audio masterclasses. I love your humble brag that we're on Clubhouse. Can I second you with another humble brag? Jack, the floor is yours. Please take it away.

We believe Clubhouse should have a feature where creators can charge, like a dollar, to listen to a conversation called How to Launch a podcast, hosted by a couple of buddies who met in college that now co-hosted Daily Snacks podcast. These guys won't be the same creators as the ones you see on TikTok, Instagram, or Snapchat. Audio-only networks call for audio-only creators. The creators' Clubhouse can monetize off can be experts who can tell you the secret of their craft

without the need for visuals on Instagram or dance karaoke videos on TikTok. Clubhouse's future needs creators, but their success will be with a different type of creator. For our second story, Jack, we now have the first ever pure play smart door lock stock. Guy Ritchie over here. Don't call it a lockstock, though, Nick. Latch's real value is the thing you can't see. Jack, so this could be the first lock stock to see its stock pop, like game stock stop before that stock drop? My tongue is too tired to respond to what you just said. No, I know. My head hurts now. Five companies all announced major SPAC acquisitions on Monday morning. Jack and I, we're following them all. Snackers, do you want to know our opinion on SPACs? Jack, no one's asking,

but we may as well share. We got the microphones right now. Nick and I think they are great for one reason. They make private companies suddenly investable to you and me. Boom, fantastic. Now, we do have one criticism. So we just kind of got to get this out there. Spack companies don't share nearly as much information as IPO companies do before they go public. Right. They don't have an S-1, so it's hard to research the company before investing. But overall, this week, there are our five companies, retail investors can invest in, that last week were sumo stocks. We were straight up missing out. Jack, I love when you set me out for a transition like this. One of those five companies is named Latch, the first pure play lockstock. They're battling

against physical keys. That is their existential goal in this world to destroy that physical key you got cut at the hardware store. Now, Tishman Spire is a real estate giant company. They manage a SPAC called T.S Innovation Acquisition Corps. and that's the company that purchased for $1.5 billion latch on yesterday. The ticker symbol is T-S-I-A, but in a couple months when this deal becomes official official, the ticker symbol will change to latch, and so will the company name. So if you're curious about Latch, basically it's both a hardware and a software product. Jack, what's the hardware side of this thing?

They have an actual lock for your door that deadbolts the thing closed, but then atop that there is a sensor, looks high-tech, that recognizes your smartphone, recognizes you and unlocks the deadbolt. Beautiful, beautiful thing. Then you've got the software side of things. It's called Latch OS. If your apartment building as a super, he can change the locks and give you access

through the software. It's pretty convenient. So Latch is like a really tiny company right now, but what Jack and I see is there's both a huge opportunity in that size and a giant risk from big tech. The opportunity, according to Latch, just 1% of America's 47 million apartments have smart locks unlock unlocked.

by the phone. That is it. Imagine your Airbnb host. They could just grant you access through an Airbnb account. No rusty key lock situation outside the front door they usually deal with. Right. There's a lot of room to grow. And any apartment owner with a pet would love to grant access to their apartment through Wag and Rover, the dog walker app, instead of like stashing the key under the mask. Seems like an opportunity, but then you got the downside here. Big Tech is already in your home with a smart speaker and they could easily launch a smart lock business. Amazon, has already launched something like this to let you open up the doors through just an Alexa comment. So Little Latch can't really compete against Big Tech's ecosystems and their scale. Google, Apple, and Amazon, they are a threat to zucking what Latch does.

So Jack, what's the takeaway for our buddies over at Latch? When you see hardware, start seeing software behind it. Latch, it is a physical, hard, metal, lock company, you see it, you feel, you touch it, it has mass and densely.

You buy a latch lock. It comes in a box just like any other lock, and it's heavy because it's made of metal. But Jack, I noticed something fascinating in the financials. When we look at what Latch told us, their revenue grew 50% in 2020. They brought in like $167 million of money. But less than half of that revenue was from physically selling the locks to people. The other majority amount was actually from subscription software. And that is because after you buy a latch lock, you sign a six-year contract.

on average to use their software to actually open that lock. Without a subscription, you're just going to hold your iPhone next to the lock and it's not going to do anything. So we're thinking the business model for Latch isn't even home security. It's really just software as a service. That's why when you see a tech hardware product, you've got to start thinking about the software subscriptions getting sold behind. When you see hardware, look for the software.

For our third and final story, WWE Networks, World Wrestling Entertainment. it's getting taken over. The second victim of the streaming wars tells us about the future of the streaming wars. Okay, so here's the situation. The first post-quibby failure era of the streaming wars, in this case, it's WWE Networks. 1.6 million Americans have been paying $10 a month for WWE Network, which is just World Wrestling Entertainment streamed online. It is just body slams, just tall wrestling boots, just the hairless men engaged in combat theater. That is it. It is just this unique American art form. So Jack and I were following the story.

Then we also noticed that WWE stock fell 4% yesterday. Oh, and by the way, where is it compared to last year, Jack? Or 2019? It is half. And that is because yesterday NBC's Peacock announced it was the new exclusive place to stream WWE. That is right, Snackers. WWE Network will shut down in March existing subscribers. Congratulations.

You will now be like auto-joined into Peacock. You can find WWA network, but on Peacock. You can find it on demand. There's going to be a new 24-hour channel. And live premium events like WrestleMania will be on Peacock at no extra charge. But here is the funny thing about this situation. WWE framed this whole thing as a victory. We don't think this is a WWE victory news.

Those 1.6 million subscribers to WWE, they were paying a hefty 10 bucks a month. just for WWE. And now those same 1.6 million subscribers, they're going to be auto-converted to Peacock where they will be paying half of that to Peacock. Half of that. And WWE will probably get a fraction of that $5 a month. So if you're a subscriber, you're getting twice as much content for half the price, but if you're a WWE shareholder, you're embarrassed. It's like jumping off the turnbuckle to do a major elbow slam and then the guy moves out of the way last second and you just land on the ring. So, Jack, what's the takeaway for our buddies?

Over in all of streaming. The mega streamers are thriving. In the future, so could the micro-streamers. Micro-streamers, new think-snackers. You got Netflix, Disney Plus, HBO Max. Those are the mega-streamers. And people are apparently paying $7 to $15 a month for their huge catalogs of stuff.

But WWE Network was one of the first streaming services that didn't even try to offer you any variety whatsoever. You got wrestling, you got wrestling. The menu shows wrestling and then more wrestling. This was a pure play spandex situation. This is an all-you-can-eat buffet of meat, meat, and meat-based meat. Jack, you sound like you just snapped into a slim gym over there. Now, we think that WWE Network could have survived on its own, but here's the kicker.

Not at $10 a month. The WWE Network doesn't offer that much streaming service, so it should have been a micro-streamer charging just $1 to $4 a month, somewhere in between. there. So we think microstreamers at the right price could earn America's streaming loyalty. If you have a fraction of Netflix's content, you should charge a fraction of Netflix. Jack, can you whip up the takeaways for us over there? Clubhouse is already worth a billion bucks, even though it hasn't made a single buck yet. Clubhouse, let the host charge. Just see where it goes. Run with that. Second story, latch sells heavy-duty metal hardware door locks.

But here's the thing. It's making more money. More than half its revenue off the side. software behind those locks. Or our third and final story, the WWE. Its stock fell on news that their streaming service couldn't survive on its own. Hey, at the right price, they probably could have proved that micro streamers are a thing. I think micro streamers could be a thing. I think micro streamers could be a thing, Jack. I think they could. Now, time for our snack fact of the day. This one tweeted in by Scott Snowden from lovely Little Rock, Arkansas. As no one, including Scott, has ever argued with, Chicago does logistics. It's just like one of those facts,

but apparently Arkansas also kind of does logistics. As Scott points out, Arkansas is home to the second biggest truckload carrier called J.B. Hunt. It's also home to the seventh biggest less than truckload carrier called ABF. These technical details are going over my head. It's also the home of Walmart,

the third largest private fleet of trucks, in the United States. Which has led to our new, slogan for Arkansas, Arkansas, the safety school of logistics. I actually think the only place that definitely doesn't do logistics is like Hawaii. Snackers, before we go, Nick and I messed up on a couple things in yesterday's pod. We want to make a correction or two. We appreciate you pointing out. First of all, a bunch of people noticed, we said the wrong ticker for climate change crisis, the SPAC for the GoEV. It's C-L-I-I-I, not C-R-I-S. Also, Paul Obie, like Obi-1,

from the DMV area pointed out, EVGos are not faster than Tesla superchargers. He has personal experience. Yeah, from Paul himself, he can charge his Model 3, no big deal, 200 plus miles in 30 to 45 minutes on an EVGO. Snackers, you look fantastic for T-Boy Tuesday. Remember, if you've got a Latin name for a company

that should switch to a Latin name, tweet us at Robinette Snacks, but we want to hear it. Carpe Diem. Yes, we'll see you tomorrow. Can't wait. And before we go, congrats to Jennifer Marcello Finn, a snacker whose business just turned 20 in New Jersey. Awesome news. Also, happy birthday to Naz from Sydney, Australia. And Jamie Campos in Pembroke Pines, Florida.

And Derek Haas in Granbury, Texas. And Olivia, happy birthday in Tallahassee, Florida. This is Jack. I own stock of Amazon and Netflix. Nick own stock of Apple. 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 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.