Kylie Jenner's paper wealth becomes real wealth

Tuesday, November 19, 2019 by Robinhood Snacks | Disclosures

Coty wants Kylie’s color

Dow Jones
28,036 (+0.11%)
S&P 500
3,122 (+0.05%)
Nasdaq
8,550 (+0.11%)
Bitcoin
$8,173 (-3.50%)
10-Yr US Treasury
1.807%

Hey Snackers,

Bottle, draft, or almost 100? PBR is trying to make 99-packs of beer a thing.

Markets trickled higher to new record highs as T-Mobile's CEO put a date on his exit (May 2020) and Saudi Aramco stuck a price tag on itself ($1.7 trillion = Earth's most valuable company).

Transform
1. Ford's new Mustang Mach-E electric SUV isn't just a "compliance car"

Biggest product unveil since the Model T... Ford needed something big. So it hired a former Michigan Wolverine football player to be CEO. That's when Jim Hackett ordered designers to build an electric SUV inspired by its iconic Mustang sports car. On Sunday, Ford unveiled that Mustang Mach-E. Shares barely budged because electric cars are just a rounding error for Ford, but this signals a new focus on electric.

Don't call it a "compliance car"... Don't. Car companies that didn't completely embrace electric (that's everyone except Tesla and maybe Toyota/Nissan/Honda) still offered electric or hybrid cars — but those were "compliance cars":

  • You love profiting off SUVs and pickup trucks, which get bad gas mileage.
  • But the government requires that you hit minimum fuel efficiency standards for your whole vehicle fleet.
  • So you build compliance cars — electric or hybrid cars with incredible (or infinite) miles per gallon.
  • Picture this: It's like the table full of Sprite, Dr. Pepper, and fruit punch in the corner at a sophomore party. School rules require just as much alcohol as non-alcoholic.
  • But the Mustang Mach-E is built to compete, not comply.
THE TAKEAWAY

Competition in Elon's mirror is closer than it appears... Tesla's first "everyman" electric car kinda has a rival in the low-ish priced Mach-E. Ford's starts at about $44K, which falls to $37K after a federal tax credit — that's about the same price as Tesla's lowest priced Model 3. Plus, the Mach-E is 100% SUV, which Americans always call shotgun on.

Blush

That deal really makes your lips pop... Kylie Jenner is selling 51% of her Kylie Cosmetics beauty brand to old school icon Coty, and there's nothing Kris Jenner can do about it. That $600M splurge boosted Coty stock 2.6% and values Kylie's startup at $1.2B. But the viral number is 51% — it gives Coty control of the company, even if Kylie remains its face and 49% owner.

Maybe she's born with it... maybe it's actually Instagram. Coty dominates ancient brands stuck in your middle school bathroom from CoverGirl to Clairol (it even does Adidas' cologne) — and its stock has fallen over 60% in the last 4 years. The new generation of cosmetics was born on social media.

  • Non-celeb makeup founder: Insta-candy packaging powered Emily Weiss' Glossier to a unicorn-status valuation over $1B.
  • Extra-celeb makeup founders: Kylie Cosmetics enjoys free marketing from her 151M-strong Insta account. Older sis Kim Kardashian's brand boasts 4M more for KKW Beauty. The Honest Company is fueled by founder Jessica Alba, while Goop is dependent on Gwyneth (and her Third Eye).
THE TAKEAWAY

We’ve seen this face before... except in food, beverages, and razor blades. Older company's brands are out of style, so older company acquires upstart rivals.

  • Harry’s Razors got acquired by the owner of Schick (2019)
  • RXBar was acquired by Kellogg’s (2018)
  • San Diego-based Ballast Point Brewery was acquired by Constellation Brands (2015)
  • If you can't beat 'em, buy 'em.
What else we’re Snackin’
  • Heard: Spotify stock drops 5% on word Amazon is whipping up its free music service on more devices
  • De-Foamed: Dunkin' is ending its relationship with styrofoam cups in New England by December 1st
  • WeUpdate: WeWork is cutting at least 4,000 jobs to reach some financial stability — here's the email its Chairman just sent to WeWorkers about it
  • Replaced: Airbus snags $30B of new plane orders as Boeing's trust drama continues
  • Exec: T-Mobile is losing its long-haired, magenta-infused CEO John Legere after 7 years — he's stepping down in May as CEO but will stay on the board
Snacks Daily Podcast

One night in December 2017, corporations got richer overnight. That was thanks to the giant tax cut passed into law by President Trump. The New York Times just looked at what FedEx did with its $1.6B of money not sent to the tax man, so we dug deeper.

Tuesday

Disclosure: Authors of this Snacks own shares of Tesla and Amazon

ID: 1015805

Subscribe to Robinhood Snacks

Our Editorial Principles
Robinhood Financial LLC and Robinhood Crypto, LLC are wholly-owned subsidiaries of Robinhood Markets, Inc. Equities and options are offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance.

Getting “early access” to options or Web is defined as signing up with a valid email address for a spot in Robinhood Financial’s respective waitlist queues for Web or for options. Getting “early access” to Robinhood Crypto is defined as signing up with a valid email address for a spot in Robinhood Crypto’s waitlist queue. Early access to the waitlist for Web, options, or Robinhood Crypto should in no way be construed as confirmation that a brokerage account with Robinhood Financial has been opened or will even be approved for opening. Priority may be given to Robinhood Gold subscribers and existing customers of Robinhood Financial.

Free trading of stocks and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices or Web. Relevant SEC & FINRA fees may apply. Please see the Fee Schedule.

Robinhood Financial is currently registered in the following jurisdictions. This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Robinhood Financial is not registered. Additional information about your broker can be found by clicking here.

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.

Investors should consider the investment objectives and unique risk profile of Exchange Traded Funds (ETFs) carefully before investing. ETFs are subject to risks similar to those of other diversified portfolios. Leveraged and Inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies.

Although ETFs are designed to provide investment results that generally correspond to the performance of their respective underlying indices, they may not be able to exactly replicate the performance of the indices because of expenses and other factors. A prospectus contains this and other information about the ETF and should be read carefully before investing. Customers should obtain prospectuses from issuers and/or their third party agents who distribute and make prospectuses available for review. ETFs are required to distribute portfolio gains to shareholders at year end. These gains may be generated by portfolio rebalancing or the need to meet diversification requirements. ETF trading will also generate tax consequences. Additional regulatory guidance on Exchange Traded Products can be found by clicking here.

Options transactions may involve a high degree of risk. Please review the options disclosure document entitled the Characteristics and Risks of Standardized Options available through https://about.robinhood.com/legal or https://www.theocc.com to learn more about the risks associated with options trading.

The cash management program is expected to be offered by Robinhood Financial LLC. The cash management program, when operational, will be an added program to Robinhood brokerage accounts and will not be a separate account or a bank account. Robinhood Financial will provide additional information on the cash management program once it is operational to help customers, including those with “early access,” to determine if they want to add the program to their brokerage account.

Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC.

Testimonials may not be representative of the experience of other customers and are not guarantees of future performance or success. Robinhood Financial LLC, member FINRA/SIPC.

Third party information provided for product features, communications, and communications emanating from social media communities, market prices, data and other information available through Robinhood Markets, Inc., Robinhood Financial LLC or Robinhood Crypto, LLC are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any financial instrument or cryptocurrency or as an official confirmation of any transaction. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Any information about Robinhood Crypto on any Robinhood website (including www.robinhood.com and blog.robinhood.com), the Robinhood platform, e-mails, or any other communications, are meant for informational purposes only and are not intended as an offer, solicitation, or advertisement for Robinhood Crypto or any goods or services offered by Robinhood Crypto. The Robinhood website provides its users links to social media sites and email. The linked social media and email messages are pre-populated. However, these messages can be deleted or edited by users, who are under no obligation to send any pre-populated messages. Any comments or statements made herein do not reflect the views of Robinhood Markets Inc., Robinhood Financial LLC, Robinhood Crypto, LLC, or any of their subsidiaries or affiliates.

Investors should be aware that system response, execution price, speed, liquidity, market data, and account access times are affected by many factors, including market volatility, size and type of order, market conditions, system performance, and other factors.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. Cryptocurrency trading requires knowledge of cryptocurrency markets. In attempting to profit through cryptocurrency trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial cryptocurrency trading. Cryptocurrency trading may not generally be appropriate, particularly with funds drawn from retirement savings, student loans, mortgages, emergency funds, or funds set aside for other purposes. Cryptocurrency trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular cryptocurrency suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying cryptocurrency system. Several federal agencies have also published advisory documents surrounding the risks of virtual currency. For more information see, the CFPB’s Consumer Advisory, the CFTC’s Customer Advisory, the SEC’s Investor Alert, and FINRA’s Investor Alert.

Robinhood Crypto, LLC has a seller of payment instruments license in Georgia, with reference number 61417.

Robinhood Crypto, LLC has a money transmitter license in New Jersey, with reference number 1803456-C22.

Please note that an Alaska money transmission license does not cover the transmission of virtual currency.

Check the background of Robinhood Financial LLC and Robinhood Securities, LLC on FINRA’s BrokerCheck.

Robinhood Terms & Conditions    Disclosure Library    Contact Us    FAQ

© 2019 Robinhood. All rights reserved.