Wall Street Unplugged
Episode: 812October 27, 2021

Robinhood: Stealing from the poor and giving to the rich

Robinhood just reported a terrible quarter. Prepare for a rant at the end of the show…

But first, let’s look at some other company earnings… Some of the biggest names in tech have reported—and Daniel and I discuss which companies are separating themselves from the pack. [1:20]

Next, a company Daniel’s been bullish on reported a bad quarter. Daniel breaks down what he got wrong about the tech leader… why the stock dropped 10%… and one post-earnings silver lining. [4:18]

While Facebook and Twitter both reported incredible earnings… their stocks pulled back on the news. Is now a good time to buy these social media giants? [9:15]

Speaking of Facebook, the company has some impressive goals for building out the “metaverse.” Investors need to pay attention and keep an open mind about this coming megatrend. [14:15]

When it comes to successful investing, one of the best strategies is to invest in smart people with strong convictions. There are some you just don’t bet against—like Mark Zuckerberg, Jack Dorsey, and Elon Musk. [19:50]

Finally, Robinhood is doing the exact opposite of what its name stands for… [25:55]

Multimillion-dollar artwork has historically only been accessible to social elites… 

But through tokenization, Masterworks.io is disrupting this trillion-dollar asset class… and bringing priceless works of art to the average investor.

For a limited time, Masterworks is giving Curzio listeners the opportunity to skip the auction waitlist… 

Learn how you can own a masterpiece here.

Inside this episode:
  • Companies standing out this earnings season [1:20]
  • What Daniel got wrong about one tech leader [4:18]
  • Is now a good time to buy Facebook and Twitter? [9:15]
  • Facebook’s goals for building out the “metaverse” [14:15]
  • Why you don’t bet against guys like Zuckerberg and Dorsey [19:50]
  • Robinhood’s terrible business strategy [25:55]
Transcript

Wall Street Unplugged | 812

Robinhood: Stealing from the poor and giving to the rich

Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on Main Street.

Frank Curzio: How’s it going out there? It’s October 27th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down headlines and tell you what’s really moving these markets. How’s it going, Daniel? What’s going on, man?

Daniel Creech: Frank. I’m doing well, sir. It’s another wonderful Wednesday here in Florida, man.

Frank Curzio: Yeah, it is pretty nice out there, I got to tell you. It’s actually beautiful, right? It’s like probably sixties, really. You might hit fifties in the morning and then it gets up to like 75, and beautiful, no rain. I mean, closer to the Southwest, the weather’s really, really bad here. But it’s not. It’s actually really good, right?

Daniel Creech: Yeah, it’s awful. It’s a little chilly. We’ll make everybody mad that is not in the Southern states here, because it’s changing of the tides. You know, it’s winter. This is a great time. You know, I missed the turning of the seasons when I lived in Arizona for so long. It just goes from hot to nice. So, it’s kind of neat to experience that. But yeah, it’s cold for me. So, it was rough on the beach this morning. Feel sorry for me. And I missed the sunset, so… Sunrise.

Frank Curzio: Yeah, that’s a bad thing. Sunrise, I know, that’s just beautiful here. But so this is one of the fun times, when we do this, where it’s earning season, because it’s all conference calls, there’s so much going on, all these companies. So many of them report… The large ones report probably in about a three-week stretch, right? And then, the small caps report a little bit after that, and spread out even during those first three weeks. But it’s like a good four-week process. And I would say probably 60%, 65% of the companies are reported. And the rest of this week and into next week, still a ton of companies reporting a lot in our small cap newsletters over the next couple weeks.

Frank Curzio: But it’s good to listen to conference calls. You see what’s going on. But one of the themes that I realized here is there’s a lot of separation going on. It’s not just every company reporting good numbers and raising because a lot of these people got free money. There’s a lot more money flowing around the system, more liquidity, but you’re starting to see separation right now with the companies that have pricing power and are able to pass it along to companies that don’t. Like Kimberly Clark reported, and tissues and sanitizers and stuff like that, and they said they’re raising costs, but just inflation’s killing them. And inflation is just all their costs are going higher, so they have to raise prices to make ends meet, to get those profits up. And if you can’t raise those prices, then you screwed, right?

Frank Curzio: So, we saw Twitter. Twitter actually wasn’t too bad, but that’s down 8%. Snap got hit really, really hard, mostly due to the Facebook… Not Facebook. The Apple news, right? Apple and the new privacy issues they have and laws in place on the app store. And Intel was horrible. And listen, AMD continues to eat their lunch. AMD reported blow-out numbers. But man, it’s just Intel can’t get it done.

Frank Curzio: But what are some of the things you realize? Because there’s also companies like McDonald’s and Coca-Cola getting companies that have pricing power, right? No one’s going to stop buying Coca-Cola anytime soon. I can see restaurants and fast-food places are always going to offer it. Oh, I won’t say no matter what price, but yeah, there’s a lot of pricing power there. And also McDonald’s. McDonald’s is still the cheapest place to feed your family. Yes, the food isn’t that good. Yes, it’s not as great for you. But the cost is significantly lower than any place that you will go. I mean, I had breakfast over here for two and it was like $35. You could get probably five Big Macs, three number sevens, anything you wanted for that, for a family of four. And that’s a big deal to a lot of families out there in terms of profits, because a lot of people do eat McDonald’s.

Frank Curzio: But yeah, you’re seeing the difference between pricing power. I want to see what you’re seeing out there too, because a lot of the companies are reporting.

Daniel Creech: Yeah. The boring answer there is the power of a brand and the pricing power is key. Let’s unpack that layer by layer. What are you talking about, the food isn’t that good? McDonald’s is excellent.

Frank Curzio: It’s excellent junk. I don’t like it anymore. Now that I really stopped eating it, I don’t like it anymore. Like, now that I went on a diet and lost weight, now if I do eat… I eat it sometimes because we are running around, driving our kids everywhere and it’s crazy. It’s the easiest thing. You just go through the drive-thru. Even though drive-thrus here are pretty much like as if you’re in a restaurant and they’re half-staffed. But that’s here. But anyway, that’s how long it takes to get your food through a drive-thru. But…

Daniel Creech: I can’t remember the last time I had anything other than breakfast, but they do the two-for-four mix and match here. It’s $4.28 with tax. And I’m the guy that keeps the exact change. That way I can just peel that off. That’s wonderful.

Daniel Creech: Let’s start with the bad first. So, Intel I’ve been high on because… I told this on the podcast. I think I mentioned this on the interview I did. I filled in for the Frank Curzio on Benzinga a couple weeks ago. And…

Frank Curzio: The Ohio State University.

Daniel Creech: That’s right. Go Buckeyes. And they got a new CEO, a newer CEO, getting the company under his belt. They’re investing in a lot of things. But man, I was basically flat on that I was thinking, “Okay, I’ll build a little position here.” A very small position, thank goodness. It was flat, dropped 10% because the company came out and said, “Hey, we’re going to invest in a lot of semiconductor equipment, fabs and things like that going forward,” which is good news. But again, Wall Street’s looking at, “What are you doing for me lately? We can pull forward. We can look ahead. But you got to give us something more.” Well, basically, margins are going to be impacted on the lower end of the side. So, that sucks. Higher investments. And they think, “Hey, in three years, this is really going to start growing again.” So Intel is still just… Frank, I’m going to be biased and say they’re not dropping the ball, but they’re still not picking it up yet.

Daniel Creech: The only saving grace is that, and this might just be a little bit of good PR, but a couple of directors and the CEO of Intel just bought shares. The CEO, I think, bought 10,000 shares, so anywhere from half a million bucks to a couple hundred thousand. So, you always like to see insiders buy, especially when the stock gets hit hard. But boy, I couldn’t have been more wrong on that. I just thought any good news would be positive and pop the stock, and it didn’t. So yeah, that sucks. It was dropped 10% on the day, and that’s basically where it sits now.

Frank Curzio: And I appreciate you talking about that, because you’re going to learn more from your losers than you are your winners, right? I mean, Daniel, you guys have plenty of winners on here. You have great names. Even one of the names you recommend, Chubb, in our CRA newsletter…

Daniel Creech: It has reported earnings.

Frank Curzio: Yeah. I mean, fantastic. It’s the best stock in award. It kind of reminds me of Target when we recommended it. It just slowly goes up. Every time you look at it, it’s like it’s on a new high list. It’s going high. It’s not going to go 15% in one day. It doesn’t go down 15%. It just slowly goes higher. It’s just a nice stock. You just keep looking at it and it goes higher. But you do, guys. And I don’t ever want you to run away from your losers because that’s what you’re going to learn the most. What did you get wrong? And a lot of times you have all this conviction on it. And it’s okay, you got to realize it’s okay to get things wrong. Every single investor gets things wrong. And sometimes investors get things wrong really badly. The thing is to limit your risk, right? That’s what you want to do. If you’re wrong, that’s why stop losses work. Listen, you’re out of it, no questions asked. That could be a 15%, a 30%, even a 35%, depending on how risky the company is. I mean, look, you could have a 50% stop. If it’s a risky security that you’re putting a little money into, if the upside is three X, four X, if the thesis is right and a thesis plays out.

Frank Curzio: So, but for Intel, it’s just you look at the year chart and it’s almost flat on the year, but that’s when it started like $45. It’s like $48 right now. Started at $45. And then through 2021 to March, April, you have a high. And I’m bringing up the chart here. You can see this on a YouTube channel. And CNBCA usually is free sites for you guys. But $68 it hit. $68. And then ever since that high, it’s come down. And it’s come down to places where it seems like at levels where it’s always a buy when it really sells off. But these levels, I mean, it’s down a lot. And I think this is what we call capitulation. This is when everyone’s thrown in the towel and saying, “All right, I’m freaking sick of this freaking company. Okay? We thought we were going to come back. They started doing okay. They started reporting good quarters, two, three in a row. Now, again, we’re dealing with this again.” And those long-term investors get pissed off, especially when they see AMD and Invidia destroying this company.

Frank Curzio: So, and not every company inside this industry, whether it’s Samsung or Taiwan Semi is seeing, in terms of the fabs, the fab part of it, is seeing… Yeah, they’re seeing delays, but they’re also generating huge profits. Intel just it seems like they’re behind the curve. It’s yesterday’s news. I feel like… Yeah. I mean, the good news, like you said, Daniel, is that the insiders are buying it, which is cool. I love to see that when the stock does come down. But what’s going to change now? Maybe it is a buying opportunity. Maybe it’s too much. Yeah.

Daniel Creech: Unfortunately, right now, it’s still where money goes to die, Frank.

Frank Curzio: Yeah. I mean, look, the stock has had a run. Yes, it just fell. But listen, again, sometimes you get it wrong. It’s not a problem. But trusting those losers and what you got wrong is… Okay, there’s a management team that’s still can’t perform. Yes, they got a new team in place now. But it takes time. It takes time to transition, to get innovative. And they lost the innovation component. When you’re a technology company that utilizes innovation, you’re dead. We see that at IBM for how many years? Again, they’re switching. It looks a lot better now. Even though channels thinks it’s going to come down a little bit, I think it’s good buying opportunity. But when I look at Intel and innovation… When I look at AMD, the innovation’s incredible. When I look at Invidia, innovation’s incredible. Right? Tesla, innovation. It’s all about innovation. Otherwise, you’re the AOL business. Not that Intel’s going away anytime soon, but I was surprised. I was surprised at those numbers.

Frank Curzio: And also Snap, right? It shows you how much power Apple has over everyone, including the big tech companies. Facebook. I mean, when you could just put a couple privacy laws in there… Which, they’re doing the right thing there. And I don’t know, I haven’t looked exactly at their privacy laws, but what it does is it doesn’t allow the advertisers to see as much. And so it’s going to result in less people going to Tesla. Because they want to know all the data, all the information. They want to know everything about you. They want to have a personal camera on you, basically, that’s being Fed data through algorithms that watches you around your house. That’s what smart homes is about. That’s why you have Alexa, you have all these things. The more information, the more data they get on you, the more that they could predict, because we’re all creatures of habit. We all do the same thing, drink coffee. We go to the bathroom at the same time, work same hours, shop the same stores. You know, the more information they have, the better it is. But it just goes to show you how much power Apple has, because for that to impact Facebook the way it did, and also impact Snap, let’s see who else it impacts going forward during our earning season.

Daniel Creech: One of the fun reality sitcoms going on right now in Wall Street is this whole… Social media companies are kind of… They all get along for the most part, Frank. I mean, they all kind of get together and, you know, censor people and block things, and control and use data, and manipulate, and all that kind of stuff. But it just goes to show that not everybody gets along and everybody is out for themselves. And that’s a good thing in the big picture. So, you’re right. Apple is pressing… You can tell they’re tightening in the reins, right, Frank? Because they know how much power they have, and everybody is warning against it. Now, the separation you talked to earlier is interesting because you have Twitter coming out and saying, “Hey, over 80% of advertising is brand related. So, we’re not really that impacted by the Apple tracking services.” But still down today. Facebook warned about it and Zuckerberg…

Daniel Creech: So now, I’m adding another company to my “I don’t like, but they’re great stock” companies. So Twitter, I do like Twitter because I search it for investment differences and humor. Because there’s a lot of good people… Kuppy, a guest on here. I can’t think of his name, Capitalist Exploits guy. He’s a good guest on here.

Frank Curzio: MacIntosh.

Daniel Creech: MacIntosh is great. So, follow those guys on Twitter.

Daniel Creech: So, I love the service in that sense, but just the behind the scenes… I mean, Twitter just reported earnings and what was it? $700 million was a one-time charge because they settled for misleading earlier investors about user growth and slowdowns. Of course, nobody admits anything wrong. Nobody does anything bad, Frank. So, how about next time I screw up here at Curzio Research? I don’t admit I’m wrong and you give me a pay raise or something. Okay? How about that?

Frank Curzio: That’s basically what it is. It’s so weird the way the legal system is in our industry. You just got to disclose it. You can disclose that you’re robbing somebody, and they can’t do anything to you, really. You could say… And I don’t mean like saying robbing, but you could say, “Hey, we’re getting paid for…” And we see this in the newsletter industry from some companies where, “We’re getting paid,” and they write out the number. They don’t put the number in because it’s easy to see the actual number. They write it out. And if they’ll write out $330,000 and, “We’re getting shares of this, and we could dump it whenever we want. We may not own this position by the time you’re reading this.” Like, it says all that in these disclaimers. Basically saying, “Look, we’re pumping this to you and we’re dumping the shit right in your face.” Right? As long as you disclose it, you will not get in trouble. Right?

Frank Curzio: So, and who the hell reads a disclaimer these days? Believe me, if you read a disclaimer, you would not be on the internet. You would not be on the internet if you read a disclaimer. Nobody reads them because whenever they say, “Hey, we updated our private policies,” what that means is buried in the 30-page report. When you click it, which no one ever clicks, and if you don’t click “Okay” or if you click off of it, that means you accepted it. Right? So, when you accept it, buried in there is that, “We’re going to be sending all this out to third parties.” It’s just they’re tweaking, but they have to update it and send it to you. Right? They’re required by law to send you any updates to the private policy. But what they do, they bury it. And then some of them actually have a thing where, before you close it, it says, “Check mark to make sure you read it.” Right? And then you click it.

Frank Curzio: But if you actually read some of these things, holy shit. And what they track, what they follow, the cookies on your… It’s unbelievable the tracking services that they have. And again, there is going to be a big crackdown. People are pissed about it. But at the end of the day, they’re pissed, but Daniel, they don’t want to do anything about it. They want to be on Facebook telling everyone their lives. Even when I go to a concert or something, I see all these young kids. They literally go to this concert… I don’t even think they go to the concert to watch the concert. They go there and they’re on their phone the whole time. They’re taping everything live, this and that, posting to Instagram and saying, “Hey, I’m here right now. Look at me.” That’s why they’re there, to show everyone that, “Hey, this is what I’m doing right now, and I’m having fun.” It’s not even like, hey, you have a good concert, just put your phone down and watch it. You know, you can take pictures or whatever. But it’s almost more about, “I need to show everyone that I’m special, that I’m here. I need the attention.” I mean, that’s what social media brought out in so many people. And it’s crazy just seeing it. It’s crazy what’s going on social media.

Daniel Creech: That’s what you’re talking about with the Facebook papers. Have you read any of this about the Facebook papers and the whistleblower and stuff?

Frank Curzio: No. A little bit with the whistleblower, yeah, a little bit.

Daniel Creech: Yeah. So… And that’s why they’re doing the big… Rumor is they’re going to do a big re-imaging on the branding side. Maybe even change the name of Facebook. We hit in on that last week. But the big takeaway here for me is that I’m interested to see Apple’s earnings. I don’t even know the date of it, but it’s got to be coming up. But I’m going to throw Twitter into the same category as Facebook here. I would buy this on this pullback. I like what they’re doing as far as getting into the payment side with the cryptos, and you’re going to be able to like tip people in Bitcoin.

Daniel Creech: Jack Dorsey, you need to get him on the podcast. This is one of the most baffling, confusing people to me there is. And I say that out of respect because he’s at the Bitcoin conference in Miami earlier this year, Frank, and I think we talked about this for a moment, but they had a fan disrupt and yell about how he was banning people on Twitter. And he handled it so well. I think the guy’s grooming for political office run because he handled it really well. But here you have a guy that is pro Bitcoin, pro freedom, and then his company, Twitter, censors people on purpose. I don’t know how that guy straddles that line, but I have to respect it a little bit. And the fact that he is so one way and the other, and he’s willing to sit down and talk about it, so I got to give him that.

Daniel Creech: Getting into the payment side is great. They’re warning that the Apple thing isn’t that big of a deal for them. So, again, to your point on this separation thing, I would still buy Facebook on the back, on this pullback as well. I’ve been on that boat for a long time. Can we take a quick rabbit trail to the metaverse?

Frank Curzio: Yeah. I mean, that’s where Facebook’s going, right? Metaverse everything. And it’s exciting. It really is. I mean, I’m doing a ton of research, so much so where I took out GoDaddy URLs and stuff like that, different businesses that I want to create within that metaverse. I mean, I’m very excited about. I think it’s for real. And the next two years, you’re really going to see this thing. Facebook, a lot of companies are putting a lot of money into it. Not just Facebook. Coca-Cola, a lot of companies are.

Daniel Creech: Well, Zuckerberg’s not going to be outdone by the other tech, Twitter, Apple giants. So, on the conference call just a couple days ago, he was talking about building this metaverse out, and it’s an extension of the internet. And you’ve quoted many times about how he said, “Hey, in the future, people will recognize us as a metaverse company versus just a social media company.” This is on the conference call a couple days ago, Frank. This is Zuckerberg speaking. He says, “If you’re in the metaverse every day, you’ll need digital clothes. You’ll need digital tools, different experiences. Our goal is to help the metaverse reach a billion people and hundreds of billions of dollars of digital commerce a day.” Frank, I am a simple-minded young analyst. Help me break that down and understand the impact of that. Even if you are 50% wrong… And is it a far jump to get people to go from social media every day? What they got? Just under three billion users or signup-ees. Is it that hard to get a third of those over the next decade onto a different platform or at least try it? You’re starting to see more advertisements around Oculus RIF, virtual reality, augmented reality, that coming to get… I mean, that is coming.

Daniel Creech: And the big takeaway here, people, and then I’ll get off this soapbox, Frank, is… I don’t want to come across as arrogant, but I know it’s going to come across that way. That’s not my heart. But you have to be able to separate your personal beliefs or feelings on a company… Like me with Facebook. I’m not a big fan of the general picture. I think they do a lot of shady stuff. But it’s a no-brainer on the investment side. People love social media. They love posting everything about their lives. And some of that’s good. Like anything, you need moderation. It can be terrible. It’s going to be used against you. Blah, blah, blah, blah, blah. But don’t just write it off because maybe you’re not interested. Am I interested in plugging into the matrix or this new metaverse? Mm, not really. But that doesn’t mean that I’m going to totally ignore what could possibly come out and be built out, and the opportunities that gives investors.

Frank Curzio: Are you on social media platforms?

Daniel Creech: I have a Facebook page, yeah. I get on about once a year to thank everybody that wishes me happy birthday.

Frank Curzio: So, not really, right?

Daniel Creech: No.

Frank Curzio: Not really. Oh, okay. So, almost everyone who’s on social media, they will eventually be on the metaverse. So it’s… I mean…

Daniel Creech: Well, at least try it out because it’s going to be like an experience.

Frank Curzio: It’s not even try it. They’re almost going to… It’s not like you’re removing them from the platform and going onto another platform. But if you look at why so many people, especially the young generation, are on Twitter, it’s like, “Here, look at me,” type thing. Right? “Here. I’m here.” I think Facebook is cool, your Facebook groups. It’s used for a lot of good. But a lot of people are on there just to post and say, “Hey, I’m here. I’m here. Look at me and my family all the time and how great things are.” The metaverse allows you to be anyone you want to be and go anywhere you want to go in the world. It’s going to allow you to create your own worlds.

Frank Curzio: A good example is like college. I mean, it wouldn’t be Ivy League because they get whatever they want. But maybe, say, Florida University. Now, they’re in the metaverse where you could attend it through… You have your profile. You could look at whatever you want. You’re going to have the name and everything that’s going to be you. But again, you could make yourself look like whatever you want. You could go to college. You could sit in classes with other people. You could interact with them. Again, all virtually. So, it’s virtual and augmented reality together. If you’re going to watch the World Series, you could go there, sit there, watch the World Series as if you’re at the game, and interact.

Frank Curzio: It’s so hard to explain. I’m not doing it justice. But when you see that you could buy NFTs, you go into worlds where they’re selling… You go into an art store and they have NFTs and real NFTs that you could buy, right? And you could use different tokens to buy them or different currencies. You could buy Coca-Cola products. So, I mean, you have so many companies that are going into this right now. And Facebook, when it comes to Zuckerberg, when it comes to Dorsey, I would tell you this. And put your personal feelings aside and politics aside. Those are two guys that don’t lose. They don’t lose. Okay? They love adversity. They love when people doubt them, just like when they doubted…

Frank Curzio: People doubt Rob Barron. Remember when he was buying Tesla? He was buying Tesla. His average cost basis on Tesla is $42. $42, right? That’s split adjusted. $42, seven years ago. And I remember just… What was it? 2018? When Elon Musk said, “Hey, hey, I’m going to take the company private,” on Twitter and stuff like that, and got a lot of trouble. And then the stock started coming down, and Barron was one of the biggest owners of it. And I remember them ripping him on CNBC, tearing him apart. “You own this, but what are you going to do? You got to look to sell it. You got to look to sell it.” And he’s like, “I believe in Elon Musk, this company.” And I think his forecast was for a thousand dollars a share, like the split adjusted, a thousand dollars a share, I think, to happen in two years ago. And I think it was $1,500 a share in 2024, which we’re pushing $1,100 a share. But this is a guy that made $6 billion personally, $54 billion for his clients. And you could say whatever you want about him. And that’s what I like about him, because he’s like, “Nope, this is what I believe. This is why I see…” He sees everything different.

Frank Curzio: Zuckerberg buying Instagram, they wanted his head on a platter. “Two billion? Two damn billion dollars you’re spending on this? It has no revenue. What are you thinking?” If they didn’t have Instagram, Facebook would be… That’s their growth model. It’s not Facebook. It’s Instagram. Instagram is their growth model. If they didn’t have Instagram, that stock price would be cut in half of where it is today, probably more. Right?

Frank Curzio: So, and then you have Dorsey, where he’s running two companies and Square. “You got to step down from Square or Twitter.” How many times did he deal with that, with Twitter? I remember it as a $14, $15, $16. Same with Square. “You got to step down. You can’t do both.” These guys love that. And there’s guys you don’t bet against. Those guys you don’t bet against. Politics aside, those are guys that you just don’t bet against. So, I would be buying Twitter here. I’d be buying Facebook here. I think these stocks go a lot higher. But there’s just certain people that you could bet against, certain people that you don’t. These two guys and Rob Barron, there’s just guys that…

Frank Curzio: And Reed Hastings. I love the guy. You got to go back and look at his story because I know when he sat in a room and this was 2000, and he was hoping that Blockbuster would buy their company because after… I think it was 2003. So, the market just crashed and everything, and they have a load of debt. And Blockbuster’s kind of laughing at them. And ever since that day, that lit a fire under that guy, that competitive spirit where he’s like, “I’m destroying everybody.” He destroyed Blockbuster. And that’s why I love when Disney got into this. And he goes on… I love when he’s on the conference call saying, “No, it’s good that other people are entering the business. Love that.” That’s what he said. What he meant is, “Good, because I’m going to show you, Disney, that you have absolutely no clue and there’s no way you’ll ever, ever be able to compete with us.” And we’re seeing that right now, right? You’re seeing those numbers go down. Disney’s like, “Holy shit, we did the wrong thing. It’s going to cost too much money to go on streaming. We can’t put our best content on there because we make the most money off of our Marvel through the movies and billions of dollars. And we’re going to get 25% of that revenue if we just throw that onto streaming.” And streaming is about new content.

Frank Curzio: Just there’s guys you bet against and, “Hey, I’ll show this up.” And there’s other guys like Elon Musk and things that just you can’t bet against them. And last thing here, Daniel, I’m going to say, with Elon Musk. Tons of people have made money on this run, through a thousand. I’m talking about people who just bought it, option market. I mean, it’s incredible. I think the calls accounted for something like 45% of all the option activity. These people that make money in Tesla made a fortune all the way up. They are loyal forever. Their lives have been changed. They’re going to buy every single Tesla car out there. They’re going to buy two or three of them. They’re not going anywhere. And there’s something to be said for that. Not making sense of the evaluation, which is incredible, but the loyalty and that brand. The brand and the loyalty of a brand, of a good, powerful brand… He has followers that would never, ever leave him. And it’s something to be said for that. There’s just something to be said for that. Another person that you just don’t bet against.

Daniel Creech: Yeah. I mean, results… It’s very difficult to ignore and argue with results. And all three of those guys, as you’ve mentioned, yeah, they have a lot of soldiers backing them and willing to go to war with them and invest with him. And it’s good. So hey, I like success stories. I’ve missed out on the Elon Musk. I’ve shared my personal feelings. There’s a lot of drama there. But hey, well, what did we just hear on the TV before we started taping? Something like Musk has made more money on paper this year than Buffett made in like 90 years or something.

Frank Curzio: Yeah, something like that.

Daniel Creech: It was some wild stat.

Frank Curzio: I mean, it goes to show you different investment styles work and stuff like that.

Daniel Creech: Just incredible. It’s amazing.

Frank Curzio: It is incredible what he’s done.

Daniel Creech: It’s good stuff.

Frank Curzio: Yeah. And remember, when you have Zuckerberg and you have Jack Dorsey, you have to really… You just said it. These guys have some of the smartest engineers, the smartest people in the world that they could pay. But programming ideas… I mean, these tech companies, when you have these tens, twenties, hundreds of billions, and in Apple’s case $200 billion on your freaking balance sheet, you hire the greatest talent and you lock them in. And when you lock these people in, it’s not Zuckerberg coming up, but he’s the mad scientist genius and stuff. He’s the leader. But the people he has surrounding him, same with Dorsey… It’s incredible. These are the smartest people in the whole entire industry, and having them being able to help you out and talk about the metaverse, talk about Instagram and say why Instagram is a new, amazing platform that you have to purchase and why… There’s something to be said for that as well.

Frank Curzio: So, it’s not just these guys or how competitive they are, but they surround themselves with the smartest people. And they can afford to pay them double triple what the market worth is because they have so much money and cash on their balance sheets, and it’s worth it because it’s hard to lock in great, great talent that’s going to be there long term. Right? That’s how you run a business. If you got talent coming in and out… I’ve been to a business where they kind of used it as stepping stone. Whenever someone got famous through that platform, they left, started their own company, or they went someplace else. And that doesn’t do anything for you. You have to retain great talent. It’s very easy to do when you have so much money on your balance sheet, when you can pay these guys a lot of money and pay them incentives, especially your stock prices, which keep going higher and higher.

Frank Curzio: Now, I want to transition here really quick into crypto because Bitcoin, after moving to 66,000 now, hit new highs, pulled back a little bit below 60,000. And Robinhood reported, Daniel. So, did you see those numbers? I mean, they were freaking horrible. They were horrible. I mean, they were freaking horrible. This company… I shouldn’t say this because the users are within us and we’re in crypto. We’re in this industry and the security tokens. And I know there’s a chance that we can do partnerships with them. This company’s getting sued. They’re going to get sued. There’s going to be a big lawsuit where they’ll have to pay maybe a few hundred million dollars and admit no wrongdoing. Right?

Daniel Creech: I like that.

Frank Curzio: That’s the lawsuit. But I’m going to tell you, Daniel…

Daniel Creech: Well, hold on. Are you upset about the numbers? Are you upset about the numbers or the guidance? Because I like how they work.

Frank Curzio: The guidance is horrible and the numbers just didn’t beat. Like both.

Daniel Creech: Yeah. Hey, at least they were honest. I think the CFO said, “Hey, it’s going to be impossible for us to predict any of this going forward.”

Frank Curzio: Is that what he said? It’s impossible.

Daniel Creech: I think he was relating to crypto because, and to their point, hey, when you have a lot of volatility, that’s what drives user growth, people signing up, wanting to, that fear of missing out, FOMO, whatever, you only live once. I don’t want to cut these guys slack because, again, you want to put emotions aside. I’m guilty of not doing that just because the theme, the meme stock trading, I don’t care about that. I care about how the gamification of things is and just… I don’t know. The CEO, they’re shady about the pay for order flow and all that kind of stuff. So, that kind of bugs me. But yeah, go ahead and have fun with these numbers, Frank. I know you got them pulled up there.

Frank Curzio: I mean, look…

Daniel Creech: Is the stock down still 10%? I think it’s below the IPO price now, right?

Frank Curzio: Let me see where it is. So… No, let me see. What was the IPO price?

Daniel Creech: Wasn’t it $40?

Frank Curzio: I mean, it went up right away, but yeah, now it’s down. Yeah, it’s down 10% today. I’ll show you guys this chart. When did they go public? This is July at $38, and now it’s $35. So, it went $38. It fell right out of the gate from $38 to $35. And then the meme crowd got into it, and this thing surged like 70 bucks only for like a day or two. And it came down, and it’s been drifting lower and lower and lower.

Frank Curzio: Here’s the problem, okay? If you guys watch some YouTube, if not, I’m showing a chart at the beginning, right? These guys did a direct listing, right? They do a direct listing and you’re looking at, when you do a direct listing, you don’t have to go through the IPO process. So now, through a direct listing, you kind of make your own rules, meaning that anyone who wants to buy you… So, if you’re going to do a direct listing, chances are you have a massive platform with a lot of people on it that want to buy your stock, because then you don’t need the investment banks. The investment banks provide that liquidity for you, right? That’s the liquidity event, the IPO. They do a road show before and talk about their numbers. These guys talk about their numbers. They raise guidance into the quarter. Their numbers were the best they were ever, ever going to see back then. Right? Because that’s when we first hit highs for Bitcoin. It was like the perfect time for Robinhood to come out. Perfect time ever.

Frank Curzio: So, Robinhood comes out and they paint this picture for everyone like everything is great, great, great. Which you’re supposed to do, which all companies do. Right? Same with Virgin Galactic, right? With those two idiots, “Hey, everything’s great. Everything’s great.” With Chamath and Branson who cashed out for like 300 million dollars, and now the stock’s getting crushed again. They destroyed their retail investors. So, here’s Robinhood, Robinhood comes out, paints this picture, and they’re selling this to their clients, to the people who are using their freaking platform. This isn’t Wall Street where you’re like, “Ah, I don’t care. Wall Street’s making their fees.” These are the people who are using your platform, your most loyal customers. You’re saying, “Hey, everything’s great. This is your chance to buy. Here you go. It’s awesome.” And now look: They just report a loss of over two dollars a share. They’re supposed to report a loss of 20 cents. You’re looking at revenues toward 35%. That would be a good number. Well, this company’s traded at much, much, yeah, crazy inflated evaluation. And they expect to generate $437 million. They generate $364 million. This is like right out of the gate.

Frank Curzio: And then you’re looking at the guidance. So, Q4 revenues, they’re expecting now of $325 million. That number was close to $500 million. So, why would this company get sued for it? Because you painted this picture to retail investors. And why did you do that? Because when you do a direct listing, you could sell on day one, and the laws that they had… Not laws, but what they had with their compliance is that the insiders could dump 15% of this stock on day one, 15% of their ownership. That’s why you saw the stock really get crushed, because these guys are in $4, $5, $7, $8, while this thing comes out at $35, $40. They don’t care. Selling it at $25, they’re still making a profit, but you, you’re getting destroyed.

Frank Curzio: So now, you have all these insights coming out. And then, when the stock went to $70, they tried to file even more. And they filed this stuff close to a hundred million shares. So, they probably sold these around $50. It’s now $35. So, you have a company that’s promoting its metrics, saying how great they’re doing. The insiders are selling into your face, shoving it down your throat as you’re buying this, because you think you’re getting a great deal. Then the stock crashes. These guys made out a fortune. Their numbers are terrible now. And who gets left holding the bag? Is you. The retail investor gets, I’m sorry, they get fucked. I got to say it. And for them to not come after that is just a joke. I laugh at this stuff. I really do. I mean, Coinbase, at least, their metrics, they’re more in line. I think that’s the platform. Robinhood is just, hey, it’s just a money grab. It’s a money grab, and it worked.

Frank Curzio: And you know what? Even if they get sued for $200 million, $300 million, all those guys made money. Big deal. They’re going to take that money out of the company. They’re going to give it to the SCC. And the SCC, who knows what they do with it? And then it doesn’t matter. As someone who bought this stock, you’re not going to get any money, right? And that’s Wall Street. That’s why everybody freaking hates Wall Street. And the ironic thing is here, Robinhood is supposed to be anti-Wall Street. That’s supposed to be… All these young kids showing how, “Hey, this is our platform, and this is how much power we have, the amount of capital.” This is where the meme, the apes, all that shit is there. Right? And yet, you follow the Wall Street model and not only did your stock come down, you buried your best clients. You buried the people on this platform. I don’t know. I can keep going and going on this.

Daniel Creech: Yeah, I think you can. That’s pretty good. No, what a positive note to end the podcast on, Frank. But yeah, the numbers, when I read that… So, we use briefing as one of the paid things that we use for market information, which they should sponsor us, Frank. You need to reach out to them.

Frank Curzio: About time we mention them. I know, I tried that one time and they were like, “Ah,” didn’t even know what to do. So, but I think…

Daniel Creech: “Ah, you’re not big enough yet.” That’s what we got to do. We got to get big.

Frank Curzio: They got pulled by S&P now, so they’re really big. They got pulled by S&P.

Daniel Creech: Oh, okay.

Frank Curzio: So now, yeah, that’s off the table. But we’ll see. We’ll see if we can deal with them because it is a great service though.

Daniel Creech: But I like how it said the loss was $2 and change a share, and then it says, well, it may not be comparable because it’s so bad to the actual, what they thought were the estimates.

Frank Curzio: Yeah, they didn’t take any losses away.

Daniel Creech: And yeah, I mean, the consensus of $489 million and change for Q4, and they came in at no more than $325 million, that’s what? 30%, 33% lower? To your point, that’s a hell of a miss. So yeah, be careful with this stock. Vlad is not in the same… Well, you could say he’s successful, obviously, because he’s a gazillionaire. But yeah, if you want to buy one of these stocks, stick to the big tech conglomerates that Frank mentioned earlier, you don’t want to bet against it.

Frank Curzio: Yeah. And guys, you really have to have to… I mean, when it comes to crypto, crypto is pretty crazy, and you’re going to see ups and downs. Because we just sold a lot of our newsletter. That deal is open for another couple days where I discount tremendously. And I told everybody, I said, “Listen, this is a place where you could see the average position on our portfolio is up over 600%, and that includes the losers, our full portfolio.” However, it doesn’t mean crypto’s got… Like a lot of people are like, “Crypto’s going to $250,000 this year.” I don’t know. I know that Bitcoin… And when I say crypto, I meant Bitcoin. Bitcoin’s going higher. And when Bitcoin goes higher, a lot of things are going to move along with it, and these trends are going to develop. But it’s going to be incredibly volatile.

Frank Curzio: I mean, there was this stock that I recommended, One Inch, that I bought, that I was down 30% for a while on it. And same with my subscribers. And in one day, this thing goes up a hundred percent, and you look at a chart of it now, and this is just… In three months, I mean, you’re looking at this thing where three months goes to $220, now it’s over $500. Some of these things explode. But the volatility, you got to make sure when you’re getting into these things and when it comes to crypto too, just be careful. I mean, it’s incredibly volatile. You want to be able to buy these things where you could add to your position over time.

Frank Curzio: But when I see things like Robinhood, it just gives the industry a black eye because it’s associated with crypto. And that’s really what pisses me off when I see that. When things like that, when you associate with crypto, when you’re using crypto, again, it is a public traded company with the Wall Street way, but you could buy Bitcoin through that platform and other cryptocurrencies. But when I just look at this industry combined with Robinhood, and then you look at Coinbase as well, Coinbase, I think, is doing the right thing. They got a lot of upgrades. That stock came down well off its IPO now. That’s a company we sold at a little bit of a loss because, look, there’s a lot of headwinds there. And now, the stock has moved a little bit higher, but we’ll see. They are getting upgrades.

Frank Curzio: There’s a big difference, guys, between Coinbase and Robinhood, because Coinbase is pure play and crypto. Crypto is getting wildly adopted, massively adopted. And Robinhood is just a play on the younger generation. And are they trading as much? Because a lot of these ESG companies got wrecked, AMC fell, a lot of these stocks. And they’re seeing that trading activity go down tremendously. But there’s a big difference between those two, where one is a pure growth play, and the other one’s kind of like, “Ah, who knows what’s going to happen?” Like they said, if you’re a company, Daniel, you come out and you say, “I don’t even know, I can’t even predict what this is going to be,” investors don’t like that. And that’s why you’ve seen this stock really, really go down. You know, the guidance too, but you got to be able to say, “Hey, this is kind of what we see.” Wall Street likes that. And when you have uncertainty, that’s when people leave the stock. So, I wouldn’t be surprised if it goes lower from here.

Daniel Creech: Yeah. I mean, who knows what it… There’s not enough there to where you want to… This isn’t interesting enough, or it’s not low enough to where I think it’s worth the risk-reward setup. Does that mean it’s going to go higher or lower? We don’t know. It does doesn’t check off enough boxes to put money into it, in my opinion.

Frank Curzio: Yeah. All right, guys, so listen, Dan, thank you so much for coming on. I usually like to keep this to 30 minutes, and 35 minutes now. But when we have some hot topics, especially during early season, there’s so much to talk about. A lot of great companies reporting. And plus, by looking at those companies, you could find just other place. Right? Because they’re going to talk about the whole industry. They’ll talk about different geographies, what’s working, what’s not working. I mean, so make sure… Not that you have to listen to the conference calls, but you have access to those transcripts. You can just go to Google, and Seek and Alpha has them. But yeah, just pick the transcript. They’re all on their sites. They’re usually available a day later, or you can listen in real time with everybody else, a big advantage. And that’s what we’re doing right now to try to find more ideas and also report to you on all the stocks that are reporting earnings, which you’re going to see lots and lots of alerts coming out over the next two weeks because all the companies and portfolios are reporting.

Frank Curzio: So Dan, thanks so much for coming in. Really, really appreciate it, bud.

Daniel Creech: Absolutely. Cheers.

Frank Curzio: All right. And everybody out there, thank you so much. I appreciate all the support. I say it a lot, but I truly, truly mean it, guys. It’s amazing to see where we are and how many followers, and everything keeps building. It’s really, really cool. It feels like we’re doing the right thing here, and we’re really, really excited. So again, I appreciate all that support. And I’ll see you guys tomorrow with a fantastic, fantastic interview. Take care.

Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guest. You should not base your investment decision solely on this broadcast. Remember, it’s your money and your responsibility.

Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His weekly Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 9 million times.

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