The difference between "Profit Puppy" & "Promo Puppy"

Monday, October 28, 2019 by Robinhood Snacks | Disclosures

"What do you mean you don't need our streaming passwords anymore?"

Last Week’s Market Moves
Dow Jones
26,958 (+0.70%)
S&P 500
3,023 (+1.24%)
8,243 (+1.90%)
$9,511 (+15.95%)
10-Yr US Treasury

Hey Snackers,

A SoftBank moneybag handing out blank checks. Elon Musk's lawyer with view-only access to his Twitter account. "Beyond" + "Your Name" (looks like you but made from plants).

Let us know your best 2019 business-themed Halloween costumes.

Markets rose last week after a hefty serving of earnings reports. More coming this week from heavy hitters in tech, plus the 1st ever space tourism IPO and a Fed decision.

1. "Promo puppies," and the Netflix/Disney/HBO Streaming Wars

Cancel your plans to see people... Your binging schedule is about to take over all social commitments — Apple TV+ hits November 1st ($4.99/month), then Disney+ takes position #1 in your bookmark manager on November 12th ($6.99/month). But last week we noticed that plenty of these new Netflix rivals will actually be free:

  • Verizon is giving away 1 year of Disney+ free to customers with unlimited plans.
  • Apple is offering 1 year of Apple TV+ free to customers who buy a new Apple device (iPhone, Mac, iPad).
  • AT&T announced its HBO Max (debuting in April) will be free to subscribers who have HBO already.
  • T-Mobile revealed a partnership with Quibi (the name is a mashup of "quick" & "bites"). Details are TBD, but we wouldn't be surprised if the mobile-first premium video is free to those with T-Mobile plans.
  • Netflix’s deal with T-Mobile goes waaaaaay back to 2017. But “Netflix on Us” only happens for T-Mobile users if your account has 2 lines.

The era of password mooching is over... Mobile phone companies are paying for your streaming. Binge-able content for free is their "promo puppy." Let us explain.

  • "Profit puppy": The part of a company's business that makes a huge chunk of the profits. Like Ford's F-150 pickup truck, Lululemon's yoga pants, or Amazon's cloud service, AWS — they all drive profits.
  • "Promo puppy": A shiny, cuddly, free perk that attracts customers to sign up. Think free streaming for a year, free shipping with Prime, or "60K reward points if you spend $4K in the first 4 months" — they all drive sign-ups.

Promo puppies are discounts in disguise... It’s not clear who’s subsidizing the Disney+ account that Verizon offers for free. Is Disney+ giving it to Verizon customers, or is Verizon paying, or something in between? For customers, these promo puppies make you love Verizon and get addicted to Disney+ — both brands win. Discounts have the same outcome, but make the discounted thing look cheap.


New Tesla collector's item... Profits. Shares surged 27% last week after Tesla revealed it made more money than it spent over the last 3 months (Elon's still never pulled that off for a whole year). Plus, that battery-producing gigafactory in China is ahead of schedule, and so is the new Model Y crossover.

Survivor... WeWork stock isn't publicly-traded since it canceled that IPO. At least it's not bankrupt. The injured unicorn that loses $219K each hour was weeks from running out of cash — then SoftBank (a Japanese fund that's the top investor in WeWork) bailed it out with billions of new money. Ex-CEO Adam Neuman walks away with $1.7B, yet employees' options are nearly worthless. If you're keeping score, WeWork's valuation fell from $47B to $8B and now SoftBank owns 80% of it — but it's still in business.


No rest 'till everyone is Primed... Amazon showed investors it'll do whatever it takes to beat Walmart and Target in the shipping wars — like spending 46% more on shipping so your packages arrive in 1 day instead of the old 2 (that hurt profits last quarter). Then the Trump Administration crowned Microsoft winner of its coveted $10B Defense Department deal — Amazon was in line to win the contract until politics got involved (the President's not a fan of CEO Jeff Bezos).

Hoodie formal... Mark Zuckerberg tossed on a tie and visited Congress to defend Facebook's Libra cryptocurrency. We learned how he's pitching Libra (to help the world's un-banked) and how it'll make money (the ability to "buy with Libra" would let Facebook charge more for ads). Zuck's biggest surprise: He won't launch Libra unless US regulators OK it, which may not happen. Then Friday he unveiled Facebook's new news tab, which finally pays news agencies directly — but only 30M of Facebook's 2.6B users are expected to use it.

What else we’re Snackin’
  • Work: The "Minternship" (real thing). It's meant to fix your mid-career worries
  • Life: And the "Micro-vacation" (also real thing) to take time off when you don't have time
  • Money: To retire at 65, Millennials may need to save half their paychecks
  • Invest: A 3rd rate cut in a row could boost stocks overall. Here's why
  • Venture: 4 Venture Capitalists on what to expect when you're expecting VC funding
  • Crypto: China passes its 1st ever cryptocurrency law
Snacks Daily Podcast
  • Budweiser-owner AB InBev is experiencing a US "Bud-pocalypse" with its share of America's beer market falling way under 6%.
  • Europe's Airbus is 2019's airplane champ, already cranking out 500+ jets while American rival Boeing struggles.
  • Waste Management pushes you to recycle (hard) — so it can boost profits. We're covering how markets can improve the environment.
This Week

Disclosure: Authors of this Snacks own shares of Beyond Meat, Lululemon, and Tesla.

ID: 994855

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 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 or 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 and, 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

© 2020 Robinhood. All rights reserved.