__Treat yo' self...__ __[PayPal's](https://robinhood.com/stocks/pypl)__ __Venmo__ is [launching](https://www.cnbc.com/2019/10/17/paypals-venmo-is-launching-a-credit-card.html) a physical credit card. Details on perks and rewards are light (cashback for brunch, taxi, and pizza, please @Venmo), but technically PayPal isn't a bank — so it isn't flying solo to launch this thing:

- __What you don't see:__ __[Synchrony](https://robinhood.com/stocks/SYF)__ — The Utah-based *bank* covers the behind-the-scenes elements of credit card transactions.
- __What you do see:__ __Venmo__ — your monthly payments and daily latté splurges all appear in the Venmo app, even if you swipe the Venmo-branded plastic.

__PayPal should request $$$ from Venmo...__ It's owned the peer-payment app since 2013. Now Venmo boasts 40M users who publicly/charmingly shame friends to pay them back. But Venmo's $300M annual revenues still aren't profitable, despite 3 consistent money-makers:

1. __Cash-just-sitting-there:__ The cash you leave in your Venmo account is invested by Venmo, so it earns money off your money.
2. __Debit card fees:__ Since launching a debit card, Venmo takes a small fee from the merchant each time you swipe (aka an "interchange fee").
3. __Impatient humans:__ You can pay extra for Venmo to transfer money into your bank account faster.

_That new Venmo card feeling_

Swiped

__Venmo's kinda like football legend Tim Tebow...__ People love it, but it's not conventionally business successful. QB Tebow won a Heisman, yet hasn’t really found success as a pro in the NFL, MLB, or on TV. Like those NFL teams, PayPal's a fan of Venmo’s raw talent, but hasn't found the best use for it yet. By launching a debit card, merchant payments, and (now) a credit card, Venmo's hoping to finally find its profitable role on the team.

Venmo launches a credit card... because it's the Tim Tebow of PayPal

__*Corporate codenames are sweet*...__ "Team Edison" is the group of Fordies trying to take America's oldest car company into the future with electric. They've been busy:

1. Last year, __[Ford](https://robinhood.com/stocks/F)__ committed $11B to electric car development, pledging to sell a __majority of electric cars by the end of 2022__ (bold goal considering it's mostly gas-powered F-150 trucks now). 
2. Next month it's unveiling a __Mustang-inspired electric SUV__ (our hearts are RPM-ing with excitement).
3. Yesterday it introduced __North America's largest electric vehicle charging network__ (more on that below).  

__Nana lives 250 miles away...__ and your e-car only has battery for 200. That's one of the main concerns of would-be electric car buyers, [according to Ford](https://media.ford.com/content/fordmedia/fna/us/en/news/2019/10/17/ford-introduces-north-americas-largest-electric-vehicle-charting-network.html). *Range anxiety.* So it's giving Ford drivers a ton of new charging stations to soothe the worries.

- __The network:__ 12K charging stations and 35K charge plugs. 
- __The pass:__ FordPass is an app that shows drivers the many places they can charge up in the network.
- __The price:__ Free for 2 years. After that you'll have to pay up to fill up.

_It's Christmas for electric Ford drivers_

Charge

__Ford's not a company, it's a *modern family*...__ To survive against tech-endowed __[Tesla](https://robinhood.com/stocks/TSLA)__ and catch up in the race for electrification, it's partnering up — hard. Most of this charging network is handled by others:

- __[Volkswagen's](https://robinhood.com/stocks/VWAGY)__ subsidiary "Electrify America" will [build out](https://www.electrifyamerica.com/) thousands of the public charging stations for FordPass members.
- __[Amazon](https://robinhood.com/stocks/AMZN)__ is side-hustling to install home-charging setups for electric cars, and Ford's collaborating. 

Ford partners with Amazon & VW to tackle electric's biggest problem: charging stations

__Clean sheets, charming view, easy to find wifi password...__ __Airbnb__ wasn't planning on hosting you to view its financial information. But it is. Tech website *The Information* got [the scoop](https://www.theinformation.com/articles/airbnbs-q1-loss-more-than-doubled-new-data-shows) on the private company — here are the numbers to know from its 1st quarter:

- __Revenue__ rose 31%
- __Expenses__ jumped 47%
- __*Its loss more than doubled*__

__Stick this last number up on a billboard...__ Marketing expenses saw the biggest jump — a 58% increase to pay for some creative stuff. Airbnb now boasts its own physical [magazine](https://www.airbnb.com/magazine) (like, real paper) and [video documentaries](https://www.theverge.com/2019/4/24/18514907/airbnb-original-video-tv-studio-travel-marketing). But the Marketing Dept is getting more money for 2 reasons:

1. __Big spenders:__ Travel rivals __[Booking](https://robinhood.com/stocks/BKNG)__ and __[Expedia](https://robinhood.com/stocks/EXPE)__ dropped $10B combined last year to market themselves — Airbnb is on track to spend $1.5B or more.
2. __Pre-IPO:__ Airbnb plans to IPO in 2020, and if its ad campaigns work, then its user numbers will grow. It really wants to look good day #1 on public markets. 

_"Run the numbers again until it shows a profit"_

Pre-IPO

__Airbnb now looks like Obi-Wan Kenobi...__ *It’s the unicorns’ only hope*. For all of 2019's horned stallions IPO'ing, __Uber__, __Lyft__, __Peloton__, __Slack__, and more have all underperformed. Airbnb is the last large elder unicorn left to go public — and investors hope it can reverse the under-performing IPO trend (ideally by showing some profits).

Airbnb's financial information was just revealed — and it's giving 5 stars to Marketing

Dow Jones

S&P 500

Nasdaq

Bitcoin

10-Yr US Treasury

Venmo is PayPal's Tim Tebow

__100% of investors should have liked this...__ __[Netflix](https://robinhood.com/stocks/NFLX)__ shares surged 10% after releasing its 3rd quarter earnings report. That's better than the previous quarter, when the stock *dropped by the same amount*. Get a comfy seat on the couch and let's compare: 

- __Q2 (Apr – Jun):__ 2.7M new subscribers.
- __Q3 (July – Oct):__ 6.8M new subscribers.  

__The reason's in the seasons...__ CEO Reed Hastings explained away Q2's weakness by blaming the new shows, which were duds. But in Q3, all eyeballs were on Netflix's seasons on seasons of new content. 

- __Bingeable in the USA:__ "Stranger Things" Season 3 set a Netflix record [64M households](https://s22.q4cdn.com/959853165/files/doc_financials/quarterly_reports/2019/q3/FINAL-Q3-19-Shareholder-Letter.pdf) tuning in the first 4 weeks after its July launch. And 32M checked out "Unbelievable." 
- __Bingeable abroad:__ Since __98% of subscriber growth the past 6 months has been international__, Netflix invested in non-English hits like "The House of Paper" (about a Spanish heist) and "The Naked Director" (about a Japanese porn director). *"Terrace House" is our personal fave.* __130 seasons of non-English content__ hit in 2020. 

_Just another Netflix guy "fixing" the TV set_

Rebound

__Netflix is above the streaming wars...__ A "benchmark" is the standard you compare your performance to (for LeBron, it's Jordan. For Beyoncé, it's Madonna). Netflix prefers to benchmark itself against old-school cable TV. 

- __Netflix has over twice as many__ paying subscribers (158M) as rival Hulu (76M).
- But it gets __just 10% as much viewing__ as old school American TV. 
- So although it's miles ahead of streaming competition, it's miles *behind* TV — and it thinks all this __streaming competition will just [accelerate](https://www.cnbc.com/2019/10/16/netflix-to-competition-welcome-your-success-will-be-our-success.html) cord-cutting__. 

Netflix added almost 7M subscribers last quarter (and is targeting your TV time)

__You're gonna have to fix that carburetor solo...__ 48K car-crafting __[General Motors](https://robinhood.com/stocks/GM)__ employees spent the last 30 days on strike — GM's longest walkout since 1970. The union and the car giant [reached](https://www.cnbc.com/2019/10/16/gm-uaw-agree-on-tentative-labor-contract-that-could-end-strike.html) a tentative labor contract after CEO Mary Barra finally intervened last weekend. But here are the key $$$ numbers:

- __$2B:__ That's the estimated hit GM's business suffered while employees picketed.
- __$800M:__ That's the size of the United Automobile Workers union's “[strike and defense fund](https://www.cnbc.com/2019/10/14/jonas-investors-ok-with-gm-strike-despite-potential-multibillion-cost.html)” — it's been paying out-of-work union humans $275/week during the strike.

__So what's in the trunk?...__ Details aren't public yet (and Union members still have to vote in favor of the deal). But early reports show the month-long strike got the union 3%-4% annual raises/bonuses for workers, a $9B investment by GM in American factories, and thousands of new jobs. And temp workers will have a path to become full-time ones.

_"Back to work at GM... for more pay!"_

Deal

__GM’s stock price during the strike shows that markets are rational...__ Investors punished GM shares by almost the perfect amount — *the same amount as the lost profits caused by the strike.* Here's how the numbers break down:


- __Losses to GM: $2B__. We mentioned that the strike cost the company an estimated $2B in losses while cars weren't being produced.
- __Losses to GM's stock: $2.5B__. GM's stock price dipped 5% during the strike, meaning the company lost $2.5B in market value (5% of GM's $52B [market cap](https://learn.robinhood.com/articles/GByCbiOluG2kcWs1AF6m5/what-is-market-capitalization/) = $2.5B)

Stock markets often seem emotional and erratic, but they can be rational, too.

GM's longest strike in 49 years is about to end — and markets reacted rationally

_"Back to work for more pay"_

Netflix wants to defeat TV

__A chair that reads your Gmail and orders new pencils...__ Not a thing yet, but __[Google's](https://robinhood.com/stocks/goog)__ getting close. At its annual product unveil day in New York, Google did its best turtleneck-free Steve Jobs impression and [revealed](https://gizmodo.com/everything-google-announced-today-1839062480) its newest gadgets — the focus was to ensconce your life in Pixel-branded tech. The 2 highlights:

1. __Pixel 4 phone ($800)__ features a radar technology that lets you interact with the screen without touching it.
2. __Pixel Buds 2 ($179)__ to take on Apple AirPods cord-free.

__But the real highlight is what's gone...__ Daydream — Google's virtual reality platform is designed so you can "Dream with your eyes open." Its headset though will be [discontinued](https://www.theverge.com/2019/10/15/20915609/google-pixel-4-no-daydream-support-view-vr-headset-discontinued) because (per a company spokesman) *“there hasn’t been the broad consumer or developer adoption we had hoped.”* Google's definitely been trying, having unveiled Google Glass twice and also $15 cardboard VR headsets for the masses.

_When you're the only person who bought VR gear_

De-launched

__Virtual reality has been a disappointment...__ but that doesn’t mean Google's given up on it. Instead, Google is “Androiding” this thing — it's applying the strategy it uses with its Android phones to the early stages of virtual reality: It'll focus on the software, but let someone else make the hardware (like the VR headsets).

Google's kills VR headset on same day it unveils Pixel 4 smartphone

__The OG Bay Area disrupter...__ Charles Schwab (real guy) is a Stanford MBA who founded the 1st discount brokerage in 1971 to disrupt the NYC ones. It just cut stock-trading commission fees to $0 — and Fidelity, TD Ameritrade, and E-Trade followed ASAP. But yesterday __[Schwab](https://robinhood.com/stocks/SCHW)__ announced record 3rd quarter profits, which don't look that threatened by its fee-less future.

__It's kind of like going on a no-éclair diet...__ when you don't eat many éclairs. Here's [how](https://www.wsj.com/articles/schwabs-growing-cash-absorbs-interest-rate-impact-11571161752) Schwab made $2.7B in revenue last quarter:

- __Trading revenue:__ That's just 6.3% of the total — it's from the $5 Chuck charged for each buy/sell stock trade. *That will drop next quarter*.
- __Asset management:__ Schwab manages your money for a fee. And sets up retirement funds... for a fee. It made 30% of its revenues on those fees.  
- __Interest revenue (its secret profit puppy):__ When you place money in a Schwab account and don't invest,  it's open season for Schwab to invest the cash for you on its own behalf. Chuck made a whopping 60% of its revenue by investing and lending out customers' uninvested cash, which was just sitting there.

_Cash is king for Chuck_

Nothing

__That profit puppy is under threat...__ Econ textbooks suggest that banks should pay you for the privilege of holding your money, because that's the same money banks use to make loans. But the national average interest rate is just 0.01% for bank accounts. Schwab offers 0.2% to customers for giving it their cash. Now some publicly traded banks offer higher-yield accounts to win those bucks away from Schwab:

- __[Citizens Bank](https://robinhood.com/stocks/CFG)__: 2%
- __[Goldman Sachs](https://robinhood.com/stocks/GS)__' __"Marcus"__: 1.9%
- __[Ally Financial](https://robinhood.com/stocks/ALLY)__: 1.8%


Schwab enjoys record Q3 profits because of cash you're doing nothing with

__The very 1st electric fans in the US...__ were sold by St. Louis-based __[Emerson Electric](https://robinhood.com/stocks/emr)__. Founded by a Civil War vet in 1890, Emerson's grown to become a $42B maker of electric motors and storage systems. But there's a problem: Over the last 10 years, the stock market has performed twice as well as Emerson's shares — and its competitors were 3 times better.

__“Change is needed at Emerson Electric”...__ That's one of the opening slides in the aggressive pitch deck created by hedge fund __D.E. Shaw__. The firm now owns 1% of Emerson, but is trolling the company to make major adjustments. So it crafted a Burn Book-style slideshow and open letter [calling out](https://www.deshawmaterials.com/) Emerson's flaws. Lots of them.

- Emerson treated itself to __8 private jets and 1 helicopter__ so execs don't have to go through TSA.
- It splurges on a __staff of 40__ to run that aerial fleet — supported by an entire summer internship program.
- There are __a whopping 18 Emerson facilities__ in just the city of Houston alone.
- The fund also got personal, claiming a recent acquisition __"destroyed value"__ and caused __"extreme shareholder dissatisfaction."__

"_Emerson, you're going to want to sit down before reading this_"

Trolled

*__We’re doing this to help you, not hurt you...__* The activist hedge fund isn't just hating on Emerson — it wants to “work together to unlock value for all shareholders” (their words). Emerson's stock rose because investors now see the sickness, along with D.E. Shaw's prescription:

- __Get frugal__ (slash annual spending by $1B)
- __Keep leadership hungry__ (force board members to run for re-election every year)

Emerson Electric gets called out in a hedge fund's Burn Book

Google quits virtual reality in real life

__Everyone gets a trophy...__ including __[SmileDirectClub](https://robinhood.com/stocks/sdc)__. The worst new stock of 2019 is now down 53% from its IPO day. SmileDirectClub embraces "telemedicine" to straighten your teeth, using clear aligners and online video chats to replace painful in-person ortho appointments. But the stroke of a governor's pen just made its life a bit harder.

__AB-1519 will see you now...__ That's the California bill just [signed](https://www.marketwatch.com/story/smiledirectclub-stock-slides-10-as-california-gov-newsom-signs-law-to-change-teledentistry-rules-2019-10-14) into law. It adds additional regulation for SmileDirect to deal with while providing additional protection to aspiring grinners. Now the state Dental Board will oversee all things teeth-fixing — this doesn't ban SmileDirect's business, but investors are still unhappy.

- __Your neighborhood orthodontist:__ She's getting disrupted by SmileDirect's straighten-from-home biz model. She also thinks braces deserve in-person, un-rushed attention.
- __The dental lobbyists:__ They represent that community of concerned orthodontists, so they encouraged California's government to make the move.
- __Your canines:__ They're not affected. Yet. SmileDirect [said](https://www.prnewswire.com/news-releases/smile-direct-club-statement-on-california-assembly-bill-1519-300937847.html) it will keep operating in California, but the bill “will create unnecessary hurdles and costs."

_Revenge of the braces_

Lobbied

__SmileDirectClub predicted this...__ A company's IPO filing paperwork (aka its "[S-1](https://www.sec.gov/Archives/edgar/data/1775625/000104746919004785/a2239489zs-1.htm)") is released before its stock first begins trading, highlighting the business' risks and opportunities. SmileDirectClub's S-1 mentioned this exact concern: “*Adverse changes in, or interpretations of, laws and regulations governing remote healthcare and the practice of dentistry.*"

The dental pros resisting SmileDirect are better-funded and organized than the taxis that resisted Uber...

SmileDirectClub plummets (another) 13% on California's new ortho-regulation

__You overpaid for your iPhone by like $400...__ On the same day __[Apple](https://robinhood.com/stocks/aapl)__ inched past Microsoft to return to the #1 most valuable US company (iPhone 11 is apparently selling [well](https://www.imore.com/new-iphones-are-almost-selling-better-even-apple-hoped)), we get this shocker from a research analyst with a very particular set of skills:
- The legendary Ming-Chi Kou __studies Apple's supply chain for clues__ about the number of iPhones produced and the next model coming.
- He __just [reported](https://www.macrumors.com/2019/10/13/kuo-iphone-se-2-to-launch-in-q1-2020-at-399-price/)__ that an "iPhone SE 2" will be unveiled in Q1 2020.
- The new creation boasts an iPhone 8 body with an iPhone 11 brain — *for $399*.

__Going down-market, Apple?...__ This could finally compel frugal Apple buyers to upgrade. It may even convert some of the Android flock to Apple's ecosystem.

- __Upgrades:__ An estimated [200M](https://www.cnbc.com/2019/10/14/apple-iphone-se2-will-cost-399-and-launch-in-q1-2020-kuo-says.html) humans stubbornly still use the iPhone 6 or 6s (can't believe that model is 5 years old).
- __New converts:__ Over [80%](https://www.benzinga.com/news/18/09/12404475/10-years-of-android-how-the-operating-system-reached-86-market-share) of the world's smartphone users and [51%](https://www.statista.com/statistics/266572/market-share-held-by-smartphone-platforms-in-the-united-states/) in the US are on Android, __[Alphabet's](https://robinhood.com/stocks/goog)__ operating system. And most Android phones are much cheaper than iPhone.

"_What's this? The plans for Apple's next iPhone?_"

Discount

__Phone profits aren't the priority anymore...__ The last Apple budget phone was iPhone SE (great for [her](https://pudding.cool/2018/08/pockets/) jeans pockets). It annoyingly stole sales from higher-end iPhone 7s, hurting Apple's profits. But now Apple just wants more Earthlings with iPhones in their hands so it can make money monthly on recurring "services." More phones = more potential iEverything customers (iCloud, Apple Music, Apple TV+, Apple News+, Arcade...).

Apple is reportedly going down-market with a $399 iPhone in Q1 2020

_The revenge of the braces_

Apple's $399 iPhone for the other 80%

__Please RSVP no later than Friday...__ Visa, eBay, Mastercard, and Stripe all [sent](https://arstechnica.com/tech-policy/2019/10/visa-mastercard-stripe-and-ebay-all-quit-facebooks-libra-in-one-day/) their regrets to __[Facebook's](https://robinhood.com/stocks/FB)__ inaugural meeting in Geneva today about the global cryptocurrency (it's very jedi council-y). PayPal ditched a week before. Now the "Libra" project is raising questions from the business partners who would've governed its dollars without borders. Next, Zuckerberg chats with Congress about it this month.

__Add ad problems to the crypto problems...__ 2020 could be worse than 2016. Zuck decided this past week that political ads won't be subject to [fact-checks](https://www.cnn.com/2019/10/10/tech/facebook-false-trump-ads-analysis/index.html) like other content — he thinks people should decide themselves. Then this happened:

- __On the right:__ President Trump paid Facebook for a campaign ad that included false statements. CNN isn't airing it — Facebook and other networks [are](https://www.vox.com/policy-and-politics/2019/10/9/20906612/trump-campaign-ad-joe-biden-ukraine-facebook). 
- __On the left:__ Elizabeth Warren falsely claimed in an ad that Zuck endorsed Trump for president — just to troll him/prove a point. 
- __Across the spectrum:__ Both ads got [approved](https://www.reuters.com/article/us-usa-election-facebook/warren-campaign-challenges-facebook-ad-policy-with-false-zuckerberg-ad-idUSKBN1WR0NU), showing FB's political ad revenue will be salt-and-peppered with instense controversy.

_Train for Facebook crypto meeting, you must_

Anti-social

__Politics haven't bruised profits...__ Just look at [these slides](https://s21.q4cdn.com/399680738/files/doc_financials/2019/Q2/Q2-2019-Earnings-Presentation-07.24.2019.pdf) from Facebook's last earnings report. *The graphs still point up and to the right*. It paid a $5B fine for the Cambridge Analytica scandal, but investors who friended Facebook at its IPO have watched its value rise from $100B then to over $500B today (and it's the #5 biggest public company on Earth). Unless the next prez breaks Facebook up, it'll keep selling more ads for higher prices in your FB/Insta/Whatsapp feeds.

It's crypto and political season for Facebook — both make the 'Book look bad

__Carb battles...__ __[Domino's](https://robinhood.com/stocks/dpz)__ is stuck in two food-armed conflicts: the Pizza Wars and the Delivery Wars. Rival __[Papa John's](https://robinhood.com/stocks/PZZA)__ stock is up 35% this year, while __[Uber](https://robinhood.com/stocks/uber)__ Eats steals more of Dom's delivery market. But Domino's shares rebounded last week as its new CEO focuses on a secret weapon — takeout. He [mentioned](https://snacks.robinhood.com/newsletters/7wBPV7IgQpuA3lehApHBJ4/articles/5QzldFFlPVNLFTRaEzrhVH) "carryout" 17 times on the earnings call, since it makes up 40% of Dom's sales and is more profitable because it doesn't require paying a delivery guy.

__If you can't beat 'em...__ hire their best person. __[Target's](https://robinhood.com/stocks/tgt)__ stock is up 80% in the last 5 years, while __[Bed Bath & Beyond's](https://robinhood.com/stocks/bbby)__ is down the same amount. So the bathroom go-to is snagging Target's Chief Merchandising Officer to be its new CEO. Bed Bath shares surged 21% on word offline retail legend Mark Tritton will bring his Target gameplan with him: He [launched](https://snacks.robinhood.com/newsletters/27KAHDR5Hxi6JhhY7vMwsU/articles/4kfex7ffesvVMyopvKVjwR) 30 new brands that looked just like Millennial startups you want to try out, but they were actually owned by Target.

Highs

Who's up...

__Tattoos only get you so far...__ __[Harley's](https://robinhood.com/stocks/hog)__ core customer sticks its logo on their biceps, but sales have shrunk in the US each year since 2014. So Harley sliced some avocado and released a $30K electric bike this year called "LiveWire". But *Reuters* research [revealed](https://www.reuters.com/article/us-harley-davidson-electricbike-focus/harley-struggles-to-fire-up-new-generation-of-riders-with-electric-bike-debut-idUSKBN1WM10N) that pre-orders are low and mainly going to existing customers — the “young, green, affluent 1st-time motorcyclists" Harley was targetting don't really exist (and you could almost get a whole Tesla for that price instead).

__Because, profits...__ __[Walmart](https://robinhood.com/stocks/wmt)__ spent years investing in innovative ecommerce to take on Amazon: it spent $3.3B on Jet.com in 2016 and acquired khaki king Bonobos a year later. Now it's [trying](https://snacks.robinhood.com/newsletters/15sPMFXheeWjp1Ul2gXXug/articles/5dfYgZuw7GwL04dCeNAQis) to refund those unprofitable pursuits. Walmart's seeking outside investors for its private concierge app JetBlack that loses $15K per customer, it's firing dozens of Bonobos employees, and just sold its femme online clothing brand ModCloth. Old school Walmartians won't waste time on these unprofitables.

Lows

...and who's down

"_Train for next Facebook crypto meeting, you must_"

Facebook's 1st big ZuckBucks meeting 

__The bottom of the Trick-or-Treat hierarchy...__ Somewhere between apple slices and candy corn, you get __[Tootsie Roll](https://robinhood.com/stocks/tr)__. Its sales fell to $515M last year and have barely budged in 2019 — that's because it's fighting nearly every trend we talk about at Snacks.

- __It's pro-sugar:__ Tootsie is doubling-down on dessert. Indulge in this portfolio of brands: Blow Pop, Charleston Chew, Junior Mints, and many more movie theater faves.
- __It's anti-diversifying its biz lines:__ Hershey's just bought a popcorn company. Mars acquired a pet food one and invested in Kind Bar. Tootsie is still just Wonka-esque candy.
- __But it's found an audience:__ The [latest](https://www.axios.com/obesity-overweight-oecd-countries-health-outcomes-607f0553-1934-4f34-8ccc-809bc0d57ce7.html) OECD report on developed countries found 60% of citizens are overweight and 25% are obese.

__When you've been around this long...__ you do things your own way. We noticed the 123-year-old company handles a few things differently.
- The Gordon Family has owned a majority of Tootsie Roll __for 60 years__.
- After its 95-year-old CEO passed away in 2015, his now 87-year-old wife Ellen __charmingly took over__ (she’s 87 and running the show).
- But they __don't do earnings calls__ (they just release the reports) and __no analysts__ cover the company (because it literally only does candy).

Sweet

__So why's the stock up 28% in the last year?...__ [Dividends](https://learn.robinhood.com/articles/6jGOO5O2YvyoZzlEUtIq0F/what-is-a-dividend/?utm_source=snacks&utm_campaign=email_Daily&utm_content=Dividend%20%28Tootsie%20Roll%29&utm_term=What%20is%20a%20Dividend). Those are the payouts some profitable companies make to their shareholders when they're mature enough to have a steady stream of profits. And Tootsie Roll pays them, because its bare bones candy biz is profitable. It has actually raised its dividend every year for the last 50 years. Investors don't mind Tootsie's kale aversion, because it reliably pays them dividends.

Tootsie Roll is 100% all-in on candy — but its profits and stock price may surprise you

__Police in 0.4 miles...__ Ease off that accelerator. __Waze__ gives its users the handy heads-up via emoji-ish car icons. Google dropped $966M in 2013 to acquire the Israeli app, and now it's Alphabet's *other* navigation app. Last month, a bank analyst knighted Waze a "[buried treasure](https://www.barrons.com/articles/google-maps-waze-are-buried-treasure-for-alphabet-51569632230)" for Google-parent __[Alphabet](https://robinhood.com/stocks/GOOG)__. Here's why.

- __Network effects:__ The more people wazing, the more data Waze has on traffic and your ETA. *More users ➡️ better product ➡️ more users ➡️ better product.* Repeat (infinitely).  
- __Daily habit:__ 75% of smartphone users regularly use a navigation app.
- __Near-monopoly status:__ Google Maps and Waze combined capture over 80% of the navigation app market — It's a shocker (and mistake in our opinion) that Google was allowed to acquire its main competitor. 

__"You can let me out right here"...__ Now that it's pretty much as good as Google Maps, Waze is differentiating itself with a carpool feature. If you're heading to work, you can use Waze to pick up fellow commuters. A 5-minute detour could earn you $5 driving Katie to that 9am all-hands meeting. Waze hopes that [steals](https://qz.com/1724170/waze-carpool-puts-google-back-into-the-ride-hailing-business/) business from the ride hailers.

_Still trying to make "wazing" a thing_

Upside

__High engagement = High profit potential...__ Google Maps and Waze are some of Alphabet's least-monetized assets — so the analyst thinks Waze will start packing in ads to become a profit puppy for the parent company. Picture this:

- Take exit 13 to pick up your Waze carpool. 
- Continue East on Hudson Parkway for 2 miles.
- *There's a Starbucks just 0.1 miles away offering a refresher for this 98-degree sweltering summer day*.

Waze, the driver-powered carpool app, is one of Alphabet's secret weapons

Waze is a "buried treasure"

__Just sign here, here, and here...__ and you can run __[Bed Bath & Beyond](https://robinhood.com/stocks/bbby)__. Mark Tritton will become its new CEO — he tied on his apron and plans to [revitalize](https://www.cnbc.com/2019/10/09/bed-bath-beyond-names-mark-tritton-as-president-and-ceo-stock-soars.html) the chain that sponsored your dorm room starting in November. He was previously Chief Merchandising Officer at __[Target](https://robinhood.com/stocks/TGT)__, which is living the opposite life of Bed Bath over the last 5 years:

- Target stock is __up 80%.__
- Bed Bath & Beyond is __down 84%__ — that's punctuated by 10 straight quarters of falling sales and new plans to close 60 stores.
- *But* __the stock surged 20%__ on word it's got a new leader.

__Retail ninja-ness...__ While everyone is *online this* and *ecommerce that* lately, Mark boldly revolutionized Target's physical stores:

1. __Whisperer of Digitally Native Brands:__ Millennial-fueled __Harry's__ razors, __Casper__ mattresses, or __Quip__ toothbrushes you can only get online? Mark convinced these startups to sell exclusive stuff in Target stores, which got you *in Target stores*.
2. __Creator of Innovative Private Labels:__ Inspired by all those above startups, Mark launched Goodfellow guys' apparel, Sun Squad party furniture, and Everspring sustainable home-cleaning products — all brands subtly owned by Target.

_Just a small welcome gift for the new Bed Bath & Beyond CEO_

Hired

__If you want to see where Bed Bath & Beyond is going...__ look at what Mark's been up to. Leadership changes like this aren't just about new business cards and a fancy parking spot — every new exec represents their own vision and strategy. Mark could bring the same tricks that worked at Target over to his new office (it's just got more towels).

Bed Bath & Beyond doesn't know if it has enough time

__*Our hypothesis*: These 3 are why you have a smartphone...__ *The Results*: Confirmed. John B. Goodenough, M. Stanley Whittingham, and Akira Yoshino were just awarded some Swedish kroner (almost $1M worth total) and the Nobel Prize in chemistry. They [invented](https://www.theguardian.com/science/2019/oct/09/nobel-prize-in-chemistry-awarded-for-work-on-lithium-ion-batteries) the Lithium-ion Battery — in the 1980s — and it's still used today. We'll let The Academy [explain](https://www.nobelprize.org/prizes/chemistry/2019/press-release/): 

*“They have laid the foundation of a wireless, fossil fuel-free society, and are of the greatest benefit to humankind."*

__Unplug...__ The Li-ion battery allowed electronic things to be portable — it was way lighter, more durable, and held greater energy than earlier battery options that were the size of your foot. It was also less likely to ignite and explode, which is a major plus. This single battery powers whatever you're reading this on, along with all the following:

- __Wireless tech:__ iPhone, Amazon Ring cameras, laptop computers. Anything with a battery icon and a charging cord probably uses them.
- __Electric cars:__ Without the Lithium-ion battery relaxing in the chassis, a Tesla's range would only extend as far as your longest extension cord.
- __Renewable energy:__ The wind and sun generate electricity, but we need batteries to store it for when they're MIA.

_"This Lithium-ion battery is legit"_

Charged

__Who made money?...__ Goodenough and his university decided [not to patent](https://www.theguardian.com/science/2019/oct/09/nobel-prize-in-chemistry-awarded-for-work-on-lithium-ion-batteries) Lithium-ion tech. Mr. Yoshino commercialized it at __[Sony](https://robinhood.com/stocks/SNE)__ in 1991, where it made Walkman and video camcorders a thing. Sony's batteries also powered the 1st gen of laptop computers. But no one company controls the tech, so the batteries are all up in our lives today, keeping us glued constantly to devices.

Lithium-ion Battery inventors snag Nobel Prizes for enabling the mobile revolution

The tech industry has these 3 chemists to thank

__Toss some mozzarella on the wounds...__ __[Domino's](https://robinhood.com/stocks/dpz)__ shares ended the day up 5%, but it's stuck in the middle of 2 wars right now: #1 is the "The Pizza Wars." They [caused](https://www.cnn.com/2019/10/08/investing/dominos-pizza-earnings/index.html) the carb-packed chain's quarterly sales to slow to just 2.4% growth. Here's how the competition and their stocks are doing this year:

- __[YUM Brands](https://robinhood.com/stocks/YUM)__ — up 24%: The owner of __Pizza Hut__ has the deal with the NFL to cover your Sundays in pepperoni.
- __[Papa John’s](https://robinhood.com/stocks/PZZA)__ — up 35%: There's a new CEO, and investor Shaq is even opening up his own-branded Papa locations (size 22 shoe-prints [included](https://atlanta.eater.com/2019/6/18/18683453/shaq-owned-papa-johns-pizza-restaurants-midtown-atlanta)).
- __Domino’s__ — down 1%.

__#2 is The Delivery Wars...__ Domino's is stuck in them too. Postmates, DoorDash, GrubHub, and Uber Eats are delivering pizza — and gyros. And quinoa salads. And late-night grilled cheese. The optionality of 3rd party delivery apps are snagging loyalty from hangry 20-somethings. The Domino's faithful like to mix up dinner every now and then.

_The pizza legend is kinda ignoring delivery_

Sliced

__Search for your profit puppy...__ Domino's profit-driving revenue source is “carryout.” That's the same thing as takeout or pickup, but Domino's CEO dropped the term 17 times on the earnings call. Carryout makes up 45% of Dom's sales and is more profitable than delivery because they don't have to pay a delivery driver. The CEO's plan for more carryout is why investors bought up Domino's shares Tuesday.

Domino's jumps 5% thanks to its secret weapon: carryout (don't call it takeout)

__The tweet heard 'round the C-suite...__ Heading into the weekend, the Houston Rockets basketball team's GM [tweeted support](https://www.npr.org/2019/10/07/767805936/houston-rockets-gm-apologizes-for-tweet-supporting-hong-kong-protesters) for Hong Kong's pro-democracy protestors resisting political influence from China's Communist Party. Hong Kong is part of China, but a different political system. It's a sensitive subject for Beijing, so China responded hard (and [here's](https://www.facebook.com/joe.tsai.3781/posts/2653378931391524) mainland China's perspective as told by the Brooklyn Nets' owner).

- Houston Rockets [merch was yanked](https://www.cnbc.com/2019/10/08/houston-rockets-china-fallout-alibaba-de-lists-products-broadcasters-cut-ties.html) from __[Alibaba](https://robinhood.com/stocks/baba)__, the huge Chinese ecommerce platform.
- Two NBA pre-season games this week [won't be aired](https://www.axios.com/china-nba-corporate-america-hong-kong-protests-cf9af430-4f8f-4968-aca3-c4b90fb5b2d1.html) on TV in China as planned.
- FYI: The NBA is bummed to make China's naughty list — last year __490M Chinese watched NBA games__, and they love the Rockets in particular because of Yao Ming. 

__American execs have a history of sucking up to China's government...__ to gain access to its 1.4B potential Starbucks-sipping customers. US CEOs tolerated trade rule-breaking and turned their heads to human rights abuses. Zuck even [learned Mandarin](https://www.latimes.com/world/asia/la-fg-facebook-zuckerberg-speaking-chinese-20151026-story.html) to try to get Facebook un-banned in China (he failed).

Foul

__China effectively censors American business speech...__ It's famous for its Great Firewall, which tightly controls online information throughout the country (ironically, the Chinese people couldn't be offended by the tweet because Twitter is banned in China). And cameras are everywhere (all [200M](https://www.nytimes.com/2018/07/08/business/china-surveillance-technology.html) of them installed by China's government). But American businesses are increasingly careful to say things critical of China in fear of economic punishment. Even if it's less than 280 characters.

Businesses that say things China doesn't like... get punished (this time it's the NBA)

__Message to J&J's lawyers: Don't expect a bonus...__ A jury just told America's biggest medical and home goods company to [pay 1 man $8B](https://www.reuters.com/article/us-johnson-johnson-risperdal-verdict/jj-must-pay-8-billion-in-case-over-male-breast-growth-linked-to-risperdal-jury-idUSKBN1WN2HK). It's compensation for damages related to a __[Johnson & Johnson](https://robinhood.com/stocks/JNJ)__ drug he took as a boy that was supposed to treat psychoactive issues, but also enlarged his breasts. J&J is calling the payout "excessive" and is appealing.

__*Law & Order* gets 0 stars at J&J...__ The drug in question is Risperdal, which was one of J&J's profit puppies before its patent expired. It's not the only J&J creation that used to make profits but now makes lawsuits:

- __Baby Powder:__ A jury determined J&J should [pay 22 women $4.7B](https://www.nytimes.com/2018/12/19/business/johnson-johnson-baby-powder-verdict.html) last year for its baby powder — the verdict was it caused the cancer.
- __Opioids:__ A judge ordered J&J to [pay $572M](https://www.npr.org/sections/health-shots/2019/08/26/754481268/judge-in-opioid-trial-rules-johnson-johnson-must-pay-oklahoma-572-million) last spring for its role in the opioid crisis — and that's just in Oklahoma.


Accident

__Company culture tip: Welcome the bad news...__ Don't hide it. In many of these companies-getting-sued stories, there's an element of companies' awareness of their products' harmful impacts on society, then burying the info skin-deep to preserve profits. Instead, management can encourage whistle-blowers — that could prevent future lawsuits (the plaintiffs' lawyers end up discovering the smoking pills anyway).

Johnson & Johnson has to pay a man $8B for breast enlargement side-effects

_Domino's is kinda ignoring delivery_

Domino's is stuck in 2 wars

__What's Anglo-Dutch and sold in every supermarket?...__ __[Unilever](https://robinhood.com/stocks/UL)__. The consumer packaged goods beast is dual-headquartered in London *and* Rotterdam — but its Axe body spray, Dollar Shave Club, and Dove soap are products without borders. Unilever doubled down on its global citizen-ness by [pledging](https://www.unilever.com/news/press-releases/2019/unilever-announces-ambitious-new-commitments-for-a-waste-free-world.html) to cut the amount of virgin plastic it creates in half by 2025.

__Sustainability. So hot right now...__ But former Unilever CEO Paul Polman was the trendsetter. Way back in 2010, he envisioned [all its](https://www.unilever.com/sustainable-living/reducing-environmental-impact/sustainable-sourcing/sustainable-tea-leading-the-industry/) teas (including Lipton and a bunch others owned by Unilever) to be sustainably sourced by 2020 — fair working conditions, bribe-free deals, and environmentally safe processes. Now here comes the big BUT:

- *But* Unilever is the [#8 plastic trash creator](https://www.thestreet.com/personal-finance/companies-produce-most-plastic-pollution-14860441) on Earth — producing 700K tons of virgin plastic per year __that's used once then moved to a landfill__ until the dinosaurs return.
- That's not sustainable, so Unilever will __use alternative materials and recycled plastic__ whenever possible. Aggressively.

Activist

__Sustainability is not anti-profit...__ There isn't necessarily a trade-off. Check out Unilever's Vermont-quisitions: __Ben & Jerry's__ and __Seventh Generation__. Both build Earth-friendliness into their business models — and their mission-oriented brands let Unilever charge a higher price. Unilever's CEO [believes](https://www.bbc.com/news/business-49923460) its anti-plastic pledge will be pro-spending among the Millennials and Gen-Z who hold companies to higher standards. 

Unilever renews its sustainability vows with a major anti-plastic pledge

__The brick-and-mortar store that wanted to become an ecommerce startup...__ Sounds like a lovely children's book. It's also the story of __[Walmart](https://robinhood.com/stocks/WMT)__ in the face of __[Amazon's](https://robinhood.com/stocks/AMZN)__ growing domination. The historic retailer wanted to prove to itself and investors that it could fend off competition from ecommerce companies by beefing up its own online muscles.  

__If you haven't removed the tag, can you return it?...__ Walmart acquired a few key ecommerce startups the past few years (because that's easier than innovating itself) — but in the past couple weeks, it's trying to reverse those moves. Almost all of them.

- __2016:__ __Jet.com__ is Walmart's 1st ecommerce pet, a purebred that cost $3.3B. But this summer, Walmart [folded up](https://www.reuters.com/article/us-walmart-jet-com/jetcom-falls-by-wayside-as-walmart-focuses-on-its-website-online-grocery-idUSKCN1TD2PS) all the Jet employees into Walmart corporate.
- __2017:__ Dude chino legend __Bonobos__ was bought by Walmart for $310M. Yesterday it went slim-fit and announced [dozens](https://www.vox.com/recode/2019/10/7/20903400/bonobos-layoffs-walmart-andy-dunn-marc-lore) of layoffs.
- __2017:__ Extra faux vintage women's wear website __Modcloth__ was acquired by Walmart just 2 years ago. Walmart already [sold it](https://www.cnbc.com/2019/10/04/walmart-to-sell-womens-apparel-brand-modcloth-to-go-global-retail.html) last Friday.
- __Not sure when:__ Walmart incubated a fabulously unprofitable text concierge service for busy, high-end shoppers: __Jetblack__. Now it's [looking](https://www.bloomberg.com/news/articles/2019-09-26/walmart-said-to-have-received-outside-interest-in-jetblack-unit) for outside investors for the startup that loses $15K on every customer.

Purge

__The reckoning for unprofitable companies just extended beyond IPOs...__ Ruthlessly efficient, Arkansas-based Walmart has a short patience. The old guard is annoyed that Walmart's ecommerce moves get all the media attention — those investments [lose a reported $1B per year](https://www.vox.com/recode/2019/7/3/18716431/walmart-jet-marc-lore-modcloth-amazon-ecommerce-losses-online-sales), while the old school stores quietly crank out profits. And profits are Walmart's north star.

Walmart starts pulling the plug on its most innovative (and unprofitable) acquisitions

"_Hope this thing is non-virgin, re-used, compostable material_"

Unilever believes sustainability = profits

*Today's data says "hell no" — Tomorrow's says "maybe"*

__It's like the weather...__ When the economy is expanding, it's sunny out for businesses as you spend more money and companies grow profits more easily. The US economy's been sunny since June 2009 — a 10+ year streak of [econ growth](https://learn.robinhood.com/articles/3i6hIwhY75uWjZUZiLFTFT/what-are-bull-and-bear-markets/?utm_source=snacks&utm_campaign=email_Weekly&utm_content=Bull%20Markets&utm_term=What%20is%20a%20Bull%20and%20Bear%20Market) with no recession (a recession = 2 consecutive quarters of economic shrinkage). After a bunch of data came out last week, we'll just ask it: Is the economy heading toward a recession? 

__Our Magic 8 ball is "leading indicators"...__ A couple of them arrived last week in the form of 2 econ reports — they revealed that your boss probably isn't feeling great about where the US economy is heading:

- __Factory Folks:__ A survey of over 300 managers at [manufacturing](https://www.axios.com/trump-tweets-federal-reserve-manufacturing-index-072dc093-994c-433e-ae09-44ecff634eee.html) companies __showed the worst sentiment since 2009__. For 2 straight months, *more factory managers are planning to shrink their business than grow them.*
- __Everyone Else:__ The same survey, but for [non-manufacturers](https://www.marketwatch.com/story/service-side-of-economy-grows-at-slowest-pace-in-3-years-ism-finds-adding-to-market-gloom-2019-10-03) (picture restaurants, law firms, and the rest of the 80% of our economy not happening in factories\) hit its __worst point since 2016__, but is still in "growth" mode. 

"_What do ya think of the econ data, Stu?_"

Econ

__If you look at the economy now, things look incredible...__ "*Current* indicators" like the monthly employment report must have joined Crossfit: The economy [added](https://www.npr.org/2019/10/04/766990669/hiring-steady-as-employers-add-136-000-jobs-in-september-jobless-rate-dips-to-3-) 136K new jobs in September and the unemployment rate hit a 50-year low at 3.5%. If you want to celebrate a booming economy and near-record-high stocks, do it now — business managers worry the Trade War could crash the growth party.

So is the economy headed toward a recession?

__The Uber for able-bodied humans...__ Now a thing. __[Uber](https://robinhood.com/stocks/uber)__ unveiled its 4th major app: Uber Works. Launching first in Chicago, it's pure gig economy, [connecting](https://venturebeat.com/2019/10/03/ubers-push-into-on-demand-recruitment-is-a-natural-progression-for-the-gig-economy/) businesses with temp workers — like when you're desperate for a bartender or need two more hands on an assembly line. Gig-ifying the staffing industry faces competition from freelance apps and temp agencies. But Uber needs a profit puppy, badly, as it loses billions of bucks per year.

__New product, who dis?...__ __[Microsoft](https://robinhood.com/stocks/msft)__ pulled its best Steve Jobs by [revealing](https://www.cnet.com/news/new-microsoft-surface-products-surface-pro-laptop-tablets-duo-phone/) an entirely new product category by surprise (just don't call it a phone). The Android-powered __Surface Duo__ is hybrid laptop/tablet/phone and arrives next year, featuring 2 smartphones connected in the middle. We're calling it "The Phonebook," and it shows Microsoft's got its swagger back since shutting down Windows phone in 2017.

__Get these guys some CBD gummies...__ __[Constellation Brands](https://robinhood.com/stocks/stz)__ already owns top-shelf labels locked up in your parents' liquor cabinet. But with beer sales slowing, it just announced a new spiked seltzer to catch the summer spritz wave. Alcohol-infused seltzer sales tripled from last year, [led](https://www.thedailybeast.com/how-the-hell-is-white-claw-hard-seltzer-outselling-budweiser) by White Claw and Truly, so Constellation's now got "Corona Hard Seltzer" in 4 Spring Break-worthy flavors. Constellation stock still dropped because its $4B cannabis investment in __[Canopy Growth](https://robinhood.com/stocks/cgc)__ fell by $1.3B the last 3 months. 

__Zero is the new black...__ Discount broker __[Charles Schwab](https://robinhood.com/stocks/schw)__ will stop charging $4.95 on stock, options, and ETF trades starting today, offering them commission-free instead. Within 48 hours of that announcement, rivals __[E-Trade](https://robinhood.com/stocks/ETFC)__ and __[TD Ameritrade](https://robinhood.com/stocks/AMTD)__ matched that ("me three"). The trio's stocks fell since those trading fees will be sadly missed by shareholders (but not by customers). It's the end of a [40+ year decline](https://snacks.robinhood.com/newsletters/3nFFPd0MfjBs5AqG8088gu/articles/5YfrqB1klOSuz0H52tu48Z) in commissions from $49/trade then to $0 today. Competition from zero-commission apps like Robinhood accelerated that mega-trend.

Full disclosure: *Robinhood Snacks... is owned by Robinhood.*