This is Nick, this is Jack, and this is Snax Daily, it is Thursday, November 19th. These stories are too good to mess around. Nick, I got to get right into the best one yet. Jack's not standing. He's not a standing desk. I should point that out first pot in like six months that I've been seated like this is Jack.
Low energy situation story.
Jack, what do we get? You know, the baby boomers. Welcome to the baby busters snackers, Procter and Gamble. If they had to whip out a whole new diaper strategy, literally, that's actually a thing they're doing. For our second story, Tesla just got tapped to join the S&P. Five hundred shares are up nine percent because Jack and I heard the initiation ceremony. It's pretty, pretty, pretty good for our third and final story.
It's the unicorn of the day, Duolingo. So I got to say Glueck venture. Yep. Mabruk OK. And congratulate you, Jack. How do you translate two point four billion dollar valuations if these are forex? These are the questions. These are the questions that snackers.
Before we jump into that wonderful mix of stories, we've got a stage five sucking on Twitter just announced something called Fleet Stack. We're going to have to launch that hot line, one 800 Zakynthos.
Going to make that happen.
Fleet is a fleeting disappearing tweet and it exists on your profile at the top in a circle around your profile picture. Jack, where have we seen this before? Oh, yeah. Looks identical to Instagram stories, which looks identical to Snapchat, more specifically, Twitter, just Zuks, LinkedIn, which had Pinterest, who previously sucked Facebook, who sucked its very own Instagram, who originally sucked the original sucking of Snapchat, which means that the original sucking was just copying someone else's product.
It's basically plagiarism. This feels less like plagiarism, more like a contagious disease. Yeah.
So Snackers Jack and I are pleased to announce we are launching our very own Robin Hood Snax stories, Robin Hood snack stories.
All you got to do is let's in our three stores. Yet in this next day we spoke to the lawyers and we got to get some legal out of the way about the food here. Ray Giudice, they don't reflect the views of the her family. It's all informational. Just so you know, we're not recommending any securities. Nope.
It's not a research report or investment advice not to offer a sale of a security by Nexus Digestible Business for use by Nancy Pelosi, member Fembot ABC for our first story, Procter and Gamble is preparing for a shrinking pandemic birth rate, baby bust snackers.
We may have a massive surplus of diapers in twenty twenty one.
Beware, because we know you're thinking on this one. First of all, the bad news. Let's just get the bad news out of the way. They're going to be fewer cute babies in twenty, twenty one.
The good news, fewer baby shower gifts that you're obligated to buy. There's a good side to every coin on this thing. So Jack and I, we're looking at this story. And basically you got an opposite of the baby boomer situation going down. We're going through a straight up baby bust right now.
Experts estimate that five hundred thousand fewer births will happen in the United States in twenty twenty one. That is ten times a bigger drop than we saw from twenty eighteen to twenty. Nineteen babies born in twenty twenty one are conceived in twenty twenty five. Thank you, Dr. Kramer, on that one. That was helpful.
Now the president here because there is one happens to have happened a few times. Yes. Actually, it turns out birth rates in the United States, they tend to correlate with the labor market and the last big drop in the birth rate in the US was in 2009. Financial crisis, fewer babies, pandemic crisis, fewer babies.
Here's the thing. Moms, dads like to make sure that they can afford a crib and maybe even college someday. So Jack and I are looking at the numbers here. And you get five hundred thousand fewer births potentially next year. That would be a 14 percent drop from like the normal three point seven million babies born in a typical recent year.
That means there's going to be 14 percent fewer customers for diapers. Yes. Or on the flip side, 14 percent too many diapers in this country. You got a situation where one out of seven, your customers, boom, gone, disappeared. Twenty twenty one is going to be the best year ever for Captain Underpants. Yes, it is. He's going to win.
Now, this diaper palooza of next year is a huge problem for Procter and Gamble and Kimberly Clark, who own 80 percent of the US market for diapers.
They're basically the truly in the white cloth, the diaper industry right now.
Right, right. Procter Gamble and Kimberly Clark, they make Pampers and Huggies. So here's what Jack and I find fascinating. Since you're only having a kid now, if you can afford it, they're pivoting all their diapers to the era of the fancy diaper. That's what we're calling it now.
I'm having a kid snackers. I announced this a few months ago, so I feel like I'm the elephant in this room, that things must be going pretty nice over the Kramer household.
So Kimberly Clark recognizes that people having babies are probably upscale. They're coming out with a plant based diaper made partially of sugarcane, not a typo. This is like the beyond me to diapers because it's also five times the price of the cheapest. Out there, Procter and Gamble, though, is trying to one up them their new diapers, they basically come with an adjustable belt like pants, not the stretchy one size fits all situation. At these fancy new Panji diapers are more khakis than they are sweat pants.
You're kicking like go to the boardroom at age three. But Nick Procter and Gamble is stepping it up with diapers that are TACA five snackers Jaconi to sit down and stand back up when we heard this. Turns out Procter and Gamble has also partnered with Google Protech infused diaper systems. This diaper system includes monitors, sensors which can detect wetness and then alerts that will buzz on your phone when that wetness is detected. And because you got to show off a system to really have a system, you got to get the webcam to to confirm that wetness did, in fact, occur.
The webcam confirms the baby hasn't just taken off the diaper, Stewie Griffin style. So Procter and Gamble is looking at this situation. They have had to come out with so many fancy diapers that they previously had a category called super premium diapers. They now have a category called super super premium. No, Joe, I hope you can finance these diapers because this is like the mock eight from Gillette of diapers. So, Jack, what's the takeaway for our buddies making diapers over at Procter and Gamble?
If you're losing customers, test how much the remaining ones are willing to pay snackers. Let's look at the iPhone. First iPhone came out. Twenty seven was just four hundred and ninety nine dollars.
Back then, Apple didn't really jack up prices and test the limits of price on an iPhone until the sales numbers started to fall.
Twenty nineteen they come out with an iPhone. That's one thousand four hundred and fifty dollars, their most expensive ever. How do you make up for a drop in customers, Jack? You raise prices. How do you make sure they'll pay those higher prices? Jack, you off scale the product to a silly degree.
Diapers and iPhones. Same thing for our second story. Tesla finally gets the green light to join the S&P. Five hundred. They've been hoping for this.
That means, Nick, overnight, hundreds of billions of dollars worth of funds will dump money into Tesla stock. All right. So before we talk about Tesla, I mean, we just got to talk about this wild week for Elon. Why don't we? Well, he started off by testing positive for covid-19. Yes, he did.
That's that's a tough way to begin. We keep tested positive and then negative than positive again.
So going around up to positive. He is recovering well, though. So good for him.
And then his second favorite company, SpaceX, said four Americans and one baby Yoda to go out into outer space.
And then yesterday, he passed Mark Zuckerberg on the list of world's richest people being number three, trailing now only Jeff Bezos and Bill Gates technically not as hucking, but kind of azuki.
I think about now the reason for that last one, his favorite number one company is Tesla, and Elon owns twenty one percent of Tesla stock. And guess what? Tesla just finally got the invitation to join the S&P 500 Club. The initiation for this should be Elon has to read every single tweet he's ever sent out ever. Now, the S&P 500 snackers, as a reminder, is a stock index that includes the 500 most valuable U.S. stocks. And if you're Tesla, you've had to wait for this invitation to the S&P 500 because they happen to have an inconvenient profitability requirement.
Some clubs have a dress code. Other clubs have a profitability code. Mr Kramer, you're going to have to wear the blazer in the dining room at all times.
Now, Tesla, finally, after 10 years as a publicly traded company, has reached four consecutive quarters of profitability. They actually just hit five and the S&P 500 index. It's weighted based on how valuable all those five hundred big companies are.
So Apple's the most valuable company in the index, worth two trillion dollars. It carries the most of all the other companies, six point five percent of the whole index. So Tesla jumping in with its profitable blazer. It's joining the S&P five as like the tenth most valuable company in the index based on today's stock price. And starting December. Twenty first, Tesla's in the club. So, Jack, what's the takeaway for our buddies over Tesla? This isn't just a vanity win for Elon Musk, not it literally increases demand for Tesla stock snackers.
You may have noticed Tesla stock jumped 10 percent yesterday, and that is because of stock funds like ETFs or mutual funds. They're basically huge stocks. Moody's and S&P.
Five Hundred Fund is like a huge stocks movie that include bits and tons of five hundred other stocks. You think of those companies like the blueberries, the strawberries that cheer the cash, you the whole nut situation, the S&P 500 index fund.
It's one of the most popular retirement funds out there. And the ingredients are perfectly proportional to the S&P 500. So the S&P 500 index fund is six point five percent Apple stock, it's four point eight percent Amazon and a little of the other four hundred and ninety eight.
That's because the S&P 500 index is six point five percent, Apple four point eight percent, Amazon and a little of the other four hundred ninety eight. And on December twenty first, that stock smoothie is going to include a dash of Tesla to think of it like the bee pollen. This means on December twenty first a bunch of heavy hitting fund managers who are like slinging around billions of dollars. They're going to buy a ton of Tesla stock to update their in.
Basically, they have to buy a ton of Tesla stock because they have to reflect the S&P 500 index, this is like imagine you have a textbook written as a professor and suddenly your textbook just got added to the Econ 101 required reading list that has like seven thousand students. So in anticipation of all these buy orders, driving up the stock on twelve twenty one, Tesla is up 20 percent since Monday for our third and final storage activities and or even their throats does Schleck didn't vector's.
That's the genitive the hardest of all the figures of speech.
Trick question. The answer is both unicorn of the day. Duolingo just raised thirty four million dollars to hit a two point four billion dollar valuation. But Duolingo is no Spotify.
No, it's not. But stackers. We are talking about the biggest thing out of Pittsburgh since. What do you think, Jerome Bettis? I was thinking Bain, because, you know, Batman three, it's all in Pittsburgh. It's it's a lot of Pittsburgh, but also maybe the biggest thing since Pittsburgh black Pittsburgh Black is underrated.
Black steak on the outside, red on the inside. Yeah.
If you know you know, Duolingo is a learning app that teaches you how to speak like 40 different languages.
Full disclosure, I'm doing this on The Daily with Italian Parlo Italiana on you journal.
If you open up the app like Nick does every morning, you see a little owl who's going to guide you through conjugating verbs into the subjunctive to guide you.
Honestly, can we just use the past and perfect every time it's the worst.
What if you need to say, I would have wanted to if I could have wanted to? Can I just say I did?
But this is actually a company in the ED tech industry, which is education technology. And it turns out, Ed Tech is just having like a total treat yourself moment right now. Your eyes are tired of Netflix, your legs are exhausted of palletize there, and you're still trying to cross off your list. One of those CORNTON resolutions you pledged back in April, which is probably getting back on the board with your Italian language skills, which is why people are jumping into Duolingo.
Duolingo revenue has doubled to two hundred million in the past year, and it's now the highest grossing app in EdTech. Congratulations, BoJack.
And I find most fascinating about Duolingo is how it used to make money.
Its first customers were companies that needed something translated like, say, G.E. needed their washing machine user manual translated into another language. So basically, here's how it go down that GE manual would be given to Duolingo. Who would feed it as text into the app, which you would translate as part of your lesson, which they would then crowdsource all the answers to, to deliver to GE what they think the correct translation for that text was.
So GE gets their washing machine user guide translated into Arabic. Yes, they do, based on ten thousand homework assignments for students trying to learn Arabic on the Duolingo app.
So that's awesome. But they don't do that anymore. Now it's got a pretty standard freemium model. Yeah. So basically some people are paying for premium courses on Duolingo. Others are getting Duolingo for free. But you're seeing a mattress ad and Duolingo.
See, they're simply following Spotify trajectory. But we see one problem with that. So, Jack, what's the takeaway? Matches, matches, matches for our buddies over at Duolingo. Spotify is the gold standard of freemium conversion snackers.
Converting users from free to paid is an art form that Spotify has master and Duolingo. Those numbers, they show how important it is to convert people from free to premium and just how far away they are from Spotify is gold. Standard snackers here do lingoes numbers. Four percent of Duolingo is language learners are paying for the service and yet they make up eighty five percent of Duolingo total revenue. So that tiny subset that's paying for Duolingo, they are way more valuable to the company than the ones that are just like creating some ad revenue.
But the problem is there are just so few of Spotify. On the other hand, they have one hundred forty four million paid users who pay ten bucks a month and that's out of three hundred twenty million total users. So Spotify has managed to convert, get this, forty five percent of its listeners to pay for the service. Meanwhile, Duolingo is only converted four percent. True financial fluency for Duolingo requires figuring out how to better monetize users.
Jack, can you whip up the takeaways for us over there? Five hundred thousand fewer babies are expected next year in the United States. So the diaper giants are adding bells and whistles to test your willingness to pay for a second story. Tesla stock is a required ingredient to all S&P 500 index funds starting December twenty first. So the stock price bounced twenty percent higher. Make an Elon Earth number three richest man for a thirty five story.
Duolingo claims their business model is just like Spotify. Is the freemium model only issue here? Spotify is the freemium model way better than Duolingo or anyone else in the entire world. Now time for a snack.
Back to the day this one tweeted in by Nate Evans in lovely Santa Barbara, California. They heard us mention a couple of days ago that Sonus, the speaker company, is based in Santa Barbara, California. I think that's considered a competitive advantage for the company, it turns out. I totally agree. The hottest temperature ever recorded on planet Earth was in Santa Barbara. One hundred thirty three degrees way back in the 50s. They got to enjoy that record until 1913 when Death Valley nearby hit one hundred and thirty four degrees.
By the way, you may have heard that Death Valley hit one hundred twenty nine degrees this summer. That is hot, but not even close to one hundred thirty four degree record.
Jack Ma and I had a dinner in Santa Barbara a few months ago.
It was so hot. It was the hottest way that I've ever felt. Shocking because it's on the ocean.
Yeah, people look at each other.
We were concerned, Nick, I'm going to take this home by asking the Snackers to acquire Twisties today. Giacomino walking into the living room with a have you had your snacks daily? Spread it far spread it wide snackers. This was great. We'll see you tomorrow. Can't wait if you know. You know. And before we go, snackers, what is congratulations for Th1 win a new Jeopardy! Contestant from Pomona, California. Also a snack. What is matchers?
Mattress, mattress, Derek and Flo. Congrats on the anniversary over in Nairobi, Kenya. And happy anniversary to Ian and Teresa in Virginia Beach. And happy birthday, Aaron. Rick in Parma, Ohio, and Christine Lee in Toronto, Canada. And Nairo McGeary in you and Gloria Pillow's in Edison, New Jersey, and Ashar and Gaits Mills, Ohio. And Patrick McGlaughlin in Garland, Texas. And happy birthday, Zach Samsa over in Atlanta. And congratulations to Mark and Lonnie for getting engaged in Lawrence, Kansas.
This is Jack, I own stock of Amazon and Spotify and beyond me, Nick also owns me and Apple. The Robinhood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robinhood Financial LLC and does not reflect the views of Robinhood 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.