The Best One Yet - “You too, Tootsie?” — Tootsie Roll’s cyberbulling. Apple’s TBOY. Starbucks’ reimagining.

Episode Date: January 28, 2021

Fresh after cyberbulling (not cyberbullying) powered up GameStop’s stock, we’re looking at its moves on Tootsie Roll and AMC. Apple didn’t just have its best quarter ever… it had its best quarter in global capitalism history. And don’t call Starbucks a coffee chain anymore.$AMC $GME $TR $AAPL $SBUXGot 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 Thursday, January 28th. Nick, I'm going to start things off with the bad news. You ready? Jack, start it off. You got to do these. The S&P 500 dipped by nearly 3% yesterday, which is the worst drop since October. Jack, tough way to start a pod. Can I hit you with some good news over here? I need some. We're back to where we were just three weeks ago in early January. Yeah, January 6th. And stocks were feeling really good on January 6th, remember. Jack and I jumped in Snacks style. Looks like investors seemed a little nervous yesterday about the whole vaccine rollout slowdown situation. And Wall Street is genuinely uncomfortable about some wild cyberbullying on stocks like GameStop. Our takeaway, Jack, the thoughts, investing is a long-term game. And this pod is our best one yet. Jack, what's our first story today? GameStop and AMC kept getting cyber-bolled yesterday. Wild thing Jack and I noticed Tutsi-Roll, the latest to get Cyberbold yesterday. And Tutsi-Rolling, tells you everything you need to know about cyberbullying.

Second story check, what do we got? Apple didn't just have the best quarter in Apple's history yesterday. No, no, no, no, no. Apple just had the best quarter in global capitalism history with a capital C. For our third and final story, Starbucks stock just fell 5%. But don't call Starbucks a coffee shop. Don't, don't, don't call that. We're doing a Starbucks mind exercise here.

Starbucks, it's not a coffee shop. Before we hit those three fantastic stories, Netflix and Netflix, no chill. That's the new thing Jack and I have noticed. Netflix shows are changing your behavior and you don't even know it. Remember this funny line from Netflix's earnings report. Not only did 62 million households watch the Queen's Gambit on Netflix, but it also inspired the next generation of chess prodigies. Now, Jack and I don't typically see a line like that in an earnings report. So we jumped in snack style. Someone needs to get Beth Harmon a referral fee, Jack. Chess sales snackers were already up 25% in 2020 because of the pandemic. You're like, what are you doing? You're doing words of friends,

scrabble. What else are you going to do with your life? I bought like a high-end scrabble board. I didn't get a chess board. But in just the last three months, chess sales have searched 125% because of the Netflix show, The Queen's Gambit. I thought the Queen's Gambit was just another show about British royalty, by the way. I thought it was a prequel to the crown too, but it's not the case. On eBay, by the way, tripling of chessboard sales since October when the show came out. People are splurging on rare handcrafted, hand-wittled mahogany bishops. All right, this one's wild. Last month, the hours of chess games that were watched on Twitch, a video game network doubled to over four million hours. Oh, by the way, for the young Snackers out there,

chess is like Fortnite, but less everything. Think sensory underload on this thing. Takeaway Snackers. Netflix basically has pulled a Bobby Fisher on us. And we're all just ponds in Reed Hastings content game. Let's hit our three stories. tuned into snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about the hair ain't food is 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. Snacks is digestible.

Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Tootsyroll, just got cyberbolt. Tutsi Roll is actually a stock trading on Wall Street, and we could not find a reason why the stock jumped 53% yesterday. Except there was that one thing we did find. It was the 40 threads on Reddit. Right. That's what the story is about. Snackers, Cyberbullying, Jack, can you use the noun in a, actually just give us a definition? Cyberbullying, when a band of Redditors targets one company

in a mass bullish buying campaign. It's cyberbullying, not cyberbullying. First, it happened with GameStop. Then it happened with AMC theaters. Then it happened with Nokia, the Finnish phone company. And Jack, somewhere out there, there is one podcast listener right now who used their Bitcoin to buy a Tesla to drive to a GameStop next to the AMC to drop off their Nokia. All of these stocks that are getting cyber-bold, they experienced incredible stock price jumps yesterday. Now, Wall Street, honestly, Wall Street doesn't know what to do right now because stock trading had to be paused on some exchanges. Some brokerages decided to forbid trades of these stocks that are getting the insane attention from online chat rooms.

Now, while everyone was focused on those stocks that we just mentioned, Jack and I noticed something going on with Tootsie Roll. Tutsi Roll stock popped by 53% at one point yesterday, ultimately finishing up a robust 11% higher. It looks like a herd of retail investors has a sweet tooth for your great-uncle's go-to confectionery. Nick and I had to look into this. So we went to Wall Street Betts, where the number of subscribers on Reddit jumped from 2.4 million, that's what we saw yesterday,

to 3.5 million today. We're talking more than a million people joining this Reddit. So we figured it was worth our time to look through some posts and get deep into this subreddit. And we saw some, honestly, some straightforward, some really rational arguments about the stocks we just mentioned and why people are buying them. We saw a persuasive argument that GameStop could become chewy.com but for video games. Yeah, they got a whole new board. They're basically turning GameStop from a blockbuster-style brick and mortar chain to like more of an Amazon-ish e-commerce experience. Now, Nick and I used to work on Wall Street, and we know that pro investors jump on their Bloomberg terminal at 200 West Street, Manhattan, and share hot takes just like this with their buddy who's a trader, who they happen to use to play college sports with. Don't they all? The little guys here, though, the ones on Reddit, they're just doing the same exact thing. They're doing it, though, on Reddit. and TikTok and Discord, it's really no different. They're doing it way less expensive than the $250,000

Bloomberg Termo. So what we're saying is that there is thoughtful analysis that can and does go on on Wall Street Betts on Reddit. But there's also some pure cyberbullying, and that's what we're focused on right now. It's a lot of fueled Reddit posts that are shaming anyone who sells the stocks that people are buying. Nick and I saw some hyper-passionate and unforgiving emotions on Wall Street Betts. All right, so you're either with us or you're a pawn of the hedge funds. We also saw labels of heroes and labels of villain. So you're either a martyr or you're one of the enemies. Now, when you're using the open internet, which Reddit is, where there's no content moderation, which Reddit is, where everyone is posting anonymously, Jack, which Reddit is? Of course you're going to see some

toxicity, which we saw on Wall Street Betts. So Jack, what's the takeaway for our buddies who are getting Cyberbolt? Tutsi Roll's stock jump proves that some Wall Street Betts campaign are completely hollow. Yeah, Snackers, there is no news right now that could justify TutsiRoll's 53% stock surge yesterday morning. In fact, we went to TutsiRoll's investor relations page. No news announcements have been made since May of 2018. I honestly, Jack, I can't believe I'm saying this because I'm kind of not surprised, but the CEO of TutsiRoll is an 89-year-old who owns half the company. Did they recently announce good earnings? No. The last earnings they announced was in November and sales were down 14% from the year before. The website for this company literally looks

like a MySpace page. The only event that can explain Tootsie Roll's stock price jump yesterday is the handful of posts we saw on Wall Street bets. They recognize that there are a large number of short bets by hedge funds about Tootsie Roll hoping that Tootsie Roll stock would fall. So they tried to make the opposite happen with 40 dedicated threads about Tootsie Roll, hundreds of comments about it, and thousands of views, all dedicated to buying Tutsi Roll. stock. And that online chatter is what drove Tutsi-Role stock up Wednesday, not some kind of long-term investment in a candy future. Momentum investing like this without a profit foundation eventually loses its momentum. For our second story, Apple stock jumped over the last week in

anticipation of everything that was going to happen yesterday. Nick, you ready for this? Yesterday they announced the C-note B-note, a hundred billion dollars in one quarter of revenue. There is no precedent for that, baby. Tesla reported earnings also yesterday. They made $10 billion last quarter. Facebook also reported earnings yesterday. They brought in $28 billion in revenues. Apple just brought in $111 billion of sales last quarter.

Jack, I'm whipping out the whiteboard here, a little back of the envelope math. Tesla's revenues plus Facebook revenues and then triple that, that was Apple's revenues. Apple's profit last quarter was more than Facebook's revenue last quarter. Let's just take a pause, Jack. Let that sink in. Sit down and don't even stand up. And get back up again. This was Apple's most profitable quarter in its history. Twenty-eight billion dollars of profits in one quarter is insane. But passing the $100 billion sales is a really nice round milestone. It's really a round number. And we broke it down. I mean, services, their services revenues, that jumped 24%. Jennifer Anniston, when are we going to see season two of the morning show? We know you're listening, Jennifer. Second, the iPad sales.

Those searched like 41% last quarter. Nothing like your parents taking photos on a vacation, embarrassing you with that giant tablet. Baby boomers love that giant screen. By the way, despite all that, the one thing that everyone cared about, that everyone was focused on, was iPhone.

That was it. That's because we officially entered an iPhone super cycle last quarter. All right, Snackers, get up close here. Dirty secret about Apple that no one really talks about, it is an Apple. it's really iPhone Inc. Half of revenues come from iPhones. That's why the number one fear at Apple

is iPhone sales slowing, which has happened in the past recently. And those fears were squashed because Apple just announced 17% higher revenues on iPhone. They made $6 billion more of money on just the iPhone last quarter than they expected.

This is wild. They sold 6 million more iPhones, individual iPhones, than they thought they were going to sell. And the driver here is iPhone 12 was the first 5G iPhone. That's why we got a super cycle. It's a super cycle.

It's a mass upgrade. Everyone's upgrading. Everyone's getting this new version of the iPhone. It's an Oprah situation. You get an iPhone. You get an iPhone. Except it's not free. It's really expensive.

That's a great clarification, Jack. So Jack, what's the takeaway for our buddies over at Apple? Every new iPhone sale is a profit today for Apple, but it's also a bonus profit tomorrow. Yeah, Apple makes market-leading profit margins on its hardware sales, the stuff you're touching. A thousand dollar iPhone sold today makes about $380 of pure raw cold profit for Apple. But if you're Apple, that's just the start.

Because once someone splurges for the iPhone, then they're in Club Apple for three more years. You're going to be tempted by the Apple bundle, ICloud, Apple Music, Apple Fitness Plus. Yeah, you're not really an Apple person unless you're air potting as well. Then get ready for future temptations like Apple glasses, Apple jewelry, Apple car. The iPhone is the anchor product. that's making the money today, but really bringing in money for the next three years. That's why Apple is the most profitable company ever. In the history of capitalism.

For our third and final story, Starbucks stock dropped again after its earnings. That's what happened. We got a new rule. Don't call Starbucks a coffee chain anymore. Don't call it a coffee chain. More than that in a second. In the meantime, no surprise here, Starbucks sales fell in the U.S. Because of lockdown, stock fell 7%.

When you're not commuting to work, you're not stock. at Starbucks to get that foamy latte. Here is the big headline that everyone saw that's a big deal. Starbucks's C-O, the chief operating officer, has left and will join Walgreens on March 15th as the CEO chief executive officer. Big deal because that woman, Roz Brewer, is now the only black woman CEO of an S&P 500 company. Congratulations to Rosalind Brewer, but she's got a big task ahead of her at Walgreens. Yeah, you're going to have to get rid of those five-foot-long receipts.

That's job number one. You bought some shampoo and you're walking out with some. shampoo and 37 coupons that expire at the end of the month for random stuff at Walgrain. Jack, it's like a paper rug. It's really rough. Now, Ross Brewer is actually a master of digital payments paying with an app. So this makes sense because people's heightened germ awareness means Walgreens need Starbucks's digital prowess right now. Speaking of Starbucks's digital prowess, we noticed a big milestone they announced yesterday with their fourth quarter earnings. This is what Jack and I found fascinating about Starbucks's earnings for the first time ever.

over half of Starbucks's U.S. sales were Starbucks reward members. 21.8 million people used the Starbucks app last quarter, which is up 15% from last year pre-COVID. All right, get this. If those Starbucks rewards members were like their own U.S. state, Starbucks rewards would be the third biggest state in the United States. Starbucks would be Florida, or as we like to call it, Starbucks, Mississippi. Also, funny thing that Jack and I noticed here, if you're part of the Starbucks like loyalty, reward program. If you got the app, you're probably more hungry than other Starbucks customers. It's proven by Starbucks's sales because the average order that transacts on an app is 20% bigger

than your average credit card or cash order. You're using the loyalty app, five Irish cream co-brews, you may as well splurge on the sixth. Must be nice. Starbucks recipients must be nice. So Jack, what's the takeaway for our buddies over at Starbucks? Starbucks isn't a coffee chain. It is a digital club. All right, Snackers. Jack and I checked out, the board members over at Starbucks. There are 13 of them. You're not going to believe this. One of them is the Microsoft CEO. Impressive. One of them is an Apple VP. Very impressive. One of them helped build out Domino's famous pizza delivery app. And Domino's has a great app. That's why we think lattes are just a front business for Starbucks's real biz running an app.

Snackers, Jack and I want you to reframe your mindset around Starbucks. It is an app company with the number one food chain app in the world. Starbucks app is a virtual club that gets you fast access to physical coffee across the globe. That's how you got to think of Starbucks. And once you rethink of Starbucks as a digital club, then you start noticing new opportunities for Starbucks. For example, Starbucks could license out its loyalty app technology to other restaurant or food chains that need one.

Taco Bell probably hired engineers, designers, and invested five years in their own loyalty app. Or they could have just paid Starbucks to use theirs, replace the logo with this Taco Bell logo and updated the menu with tacos. It's a powerful exercise. Reimagined Starbucks as a digital club, not a physical chain. Jack, can you whip up the takeaways for us over there? Tutsi Roll stock got mixed up at some cyberbullying yesterday. And Tutsi's cyberbullying tells us even more than GameStop did about cyberbullying.

For our second story, Apple's profit power, it's unprecedented, baby. No precedent, Jack. iPhone profit today, everything else profits for the next three years. For our third and final story, Starbucks for the first time ever had over-house. half its sales come from loyalty members. Don't think physical chain. Think Digital Club. It's Starbucks, Mississippi. Have you seen their snowman cookies, by the way? New PSL. I haven't been to Starbucks a month. It's a great cookie. Now, time for our snack fact of the day. This one tweeted in by Parth from lovely Jersey City, New Jersey. Nick, you and I mentioned on Monday's pod, if every snacker refers one buddy to listen to snacks, our size would double. Now, if everyone listening to the podcast

referred it to a friend every single week, Parth points out that that would cover the entire Earth's population in just 12 weeks. That's some fancy arithmetic, Parth, and he's basing it off of today's 2 million monthly listeners, which he found on the web. Snackers, let's cover the Earth's population in Snackers. H.Y. H.Y.S.D.

Have you had your snacks daily? Ask a friend. And we'll see you tomorrow. If you know, you know. And before we go, Snackers, congrats to Jared Miller, who's graduating down in Perth, And happy birthday to Juan Correz Zelese in the Czech Republic. And congrats to Malia, who just got a job at Tesla over in Toronto.

And happy birthday to Eric Flores in Woodstock, Illinois. And to Isaiah Gomer in Pasobley's California. And to Neda in Pittsburgh, Pennsylvania. And Davy Tan in Vancouver. And Rema Nassif in Northville, Michigan. And Heather Goriaka in Agorahills, California. And Tim Ryan in Carl's Bad California. And happy birthday, Riley Renfro in Blackfoot, Idaho.

And congrats to Jose and Angela. up Mejia, who just got their first home in Lauderhill, Florida. And Koschik aduzimili, whose parents just had their 33rd anniversary in Georgetown, Kentucky. This is Jack. I own stock of Amazon and Netflix, Nick on 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, 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.