Has the Birkenstock IPO News Grabbed Your Attention?

In this podcast, Motley Fool analysts Jason Moser and Bill Mann and host Dylan Lewis discuss:

• How oil at $90 is and isn't an inflationary pressure.
• What to make of Apple's latest iPhone release.
• The scoop on two new IPOs: Arm Holdings and Birkenstock.
• Two stocks worth watching: PayPal and Schwab.

Author Ben Mezrich talks about the origin story of a meme stock and his book-turned-movie, Dumb Money.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on Sept. 15, 2023

Dylan Lewis: We're digging into two IPOs, one for your phone and one for your toes. Motley Fool Money starts now.

It's the Motley Fool Money radio show. I'm Dylan Lewis. Joining me in studio Motley Fool Senior Analyst Jason Moser, Bill Mann, great to have you both here.

Jason Moser: Hey.

Bill Mann: How are you doing, Dylan?

Dylan Lewis: We've got the inside story on the movie Dumb Money, the skinny on two new IPOs and stocks on our radar. We're going kick off today talking about Texas Tea. Bill, oil is up to $90 a barrel. Up 50% since lows this summer. What's going on here?

Bill Mann: Black gold is back. You thought that oil was yesterday's story? Oil is one of those things that I think because we use it all the time and we see every time we go out of the house, we see pricing we're very sensitive to it. The price of oil is definitely looked through as the lens of future economic growth globally it goes into absolutely everything. Obviously, OPEC and particularly the Saudi's cutting production by a million barrels a day, they did two million earlier this year, has mattered because oil ultimately is a very narrow supply and demand story. It does not take much of a dislocation for oil prices to go up quite a bit.

Dylan Lewis: This is one of those stories that has a lot of different facets to it and a lot of different tack-on effects here. Jason, we have spent so much time on the show talking about how tight the average household budget is. This seems to me like one of those things that's just going to add a little bit more cost to keep finding dollars in those budgets for consumers.

Jason Moser: It is absolutely something that households are concerned with and rightly so. When you look at it from the bigger picture, household expenditures on gasoline, for example, obviously gasoline is a direct result of oil. Household expenditures on gasoline are consistently the most expensive category of household spending related directly to energy and they can actually quantify that. In 2021, the US Bureau of Labor Statistics Consumer Expenditure Survey, that's a mouthful, I know.

Bill Mann: But good words there, pal.

Jason Moser: Back to 2021, the average annual household spending on gasoline totaled $2,148 over the course of that year. That's slightly more than electricity, natural gas, and fuel oil combined. Think about that for a second. You realize how that plays in your day to day. It all of a sudden makes very clear sense as to why the fluctuations in oil prices can have such a drastic impact on consumers in such a short period of time.

Dylan Lewis: Bill, is this something we have to start factoring into the inflation story and things that we're monitoring there as well? I try to go this show without talking about it but here we are.

Bill Mann: No, here we are. Look, if you really want to worry about oil I just want to make a point. Fifteen years ago, oil was above $100 a share and now it's approaching 90. The rest of inflation in the United States in that period of time has been about 38% so your dollar from 2008 now buys, let's do the math real quick, $0.62 worth of stuff. In that same period of time, oil hasn't moved. If we're thinking about it as an inflationary story, it's only because it has fluctuated again very quickly. Oil prices as a component of GDP, oil as a component of GDP is as small a percentage as it has been since the 1960s. It goes into everything and it has moved very quickly and it feels bad and because we are stretched from a credit standpoint, it may feel really bad. But ultimately, we have to keep in mind that oil is not an inflationary instrument over the long term.

Dylan Lewis: Is this one of the few things that goes up in price and actually comes back down in price when we're looking at inflation?

Bill Mann: It is. It's one of those things and I always love/hate when our government takes credit for these things. Oil prices are absolutely built into the rate of inflation. Like CPI and then you have core CPI, CPI contains oil in it. What in the world has the government done to either make oil prices go up or down? This government, not that much. The Saudi government, maybe a little bit but it's not something long-term that has tended to be permanent. I think that that's a really important thing to remember.

Dylan Lewis: Keeping the focus short-term, we've also seen this show up in reports from companies and updates from companies, specifically airline businesses. We got warnings from Delta, American, and Spirit talking about how the profit picture for them might be looking a little bit different in the upcoming quarters, Bill.

Bill Mann: Come on. Not come on because obviously, they're throwing metal into the sky and it takes oil to get them there. They obviously consume oil and a lot of it but they also hedge everything. They hedge. Why is it that they are talking about oil prices as being the driver? The reason why they are is that it's the easiest thing for all of us to tell ourselves is true. Oil prices are up.

Jason Moser: But it's because everybody else is doing it too. When you think about oil prices, they have a greater impact on producer prices because of the role of key input.

Bill Mann: Thank you.

Jason Moser: Then it becomes a matter of what companies can pass along what prices. Airline tickets are different than burritos I think we can all agree so it does vary.

Bill Mann: One is delicious. 

Dylan Lewis: One gets you two burritos.

Jason Moser: How much power a company has to be able to pass those prices along versus others is another key component. To your point, yeah they love to say it because everybody else is doing it.

Dylan Lewis: It's a convenient excuse. Is that the right way to be looking at this?

Bill Mann: That is mildly unfair but it's not 100% unfair. If you think that the airlines are pulling their planes up to the tanks and just buying oil at spot, whatever the prices are now and they're just, well, that's the price. They're not. They have hedges to make sure that they have control over their oil prices. Now, maybe they got their hedges wrong and that's a different thing but they're not telling you that. They're just simply saying, well, our fuel is more expensive.

Jason Moser: I feel like we've got the sequel to an inconvenient truth, a convenient excuse.

Dylan Lewis: Bill, I appreciate you holding me and the airlines accountable. It goes a long way. If we do see consumer spending tighten up and while it's become a little bit less quick to come out, that may be something Jason has started to affect the interest and demand for Apple's latest iPhone line. We saw an update there in their annual update this fall. What did you see when you looked at the product line?

Jason Moser: Well, I think we're seeing the same thing over and over again with these presentations. Over the last several years we've probably all asked ourselves, is this really necessary? They haven't really been able to give us that next big thing. I know some would probably argue that, well, they got this Vision Pro and that's the next big thing. Well, let's let some time go by here because I would push back on that for now. They are ultimately really stuck in the $6,000,000 man loop. Instead of better, stronger, faster, it's just thinner, lighter, faster. That's just every time one of these presentations comes out. We're seeing basically the same thing in a slightly new iteration and I don't fault them for that. It's worth remembering, the iPhone was absolutely lightning in a bottle. We just can't underestimate or rather overestimate how special and how important the smartphone and the iPhone really has become to us over time. It's a difficult act to follow up. We all are hoping for that next big thing. They just haven't really been able to come up with it yet. It leaves you wanting more for these presentations.

Dylan Lewis: To your point, Jason, it is the product that gave birth to the largest company on the market. It is the engine for this company. Bill, looking at some of the press and some of the details we've seen from Apple announcements. Anything jump out to you?

Bill Mann: I love the way that Jason put it but I would say at this point it's fasterer, thinnerer. [laughs]

Dylan Lewis: But it still looks and smells like an iPhone.

Bill Mann: It's expensive as well. With any company and with any product there is a trajectory at some point you do not as a consumer have the same need to update to the next and to the next one. They have really suffered on the tablet side. I still have my same iPad from 2017 so they're trying to get past that. From a product standpoint, rolling out new features. But at some point those features become, marginal, I would say. The only reason that I happen to know that there's a big Apple event coming up is because the press keeps telling me that there's a big Apple event to come up.

Jason Moser: I'm so glad that I could help remind you, Bill.

Bill Mann: Thank you. 

Jason Moser: One thing I would say to keep in mind in regard to iPhones, one thing I think that Apple has done so well through the years, they've really benefited from this because the overwhelming majority of iPhones are sold through the carriers. Apple sells one in five iPhones directly to consumers. Most of us get that phone through our carrier and the carrier is able ultimately, to subsidize that through that contract agreement that you have with them. Now, for a long time, those agreements were essentially two years. You'd pay that phone off over two years and then in two years, you would upgrade. It's worth noting, you look at the big carriers like your Verizons and AT&T of the world. I noticed this myself last year when we upgraded in our household, it went to a new three-year arrangement. Now, of course, that makes my phone bill a little bit better, I don't mind that at all. But it also makes me think, well, I'm not going to be upgrading another phone for three years now. It has extended that upgrade cycle. We saw that upgrade cycle already extending just by virtue of the fact that the quality of these phones has just gotten better and better through the years. But now the carriers play a little bit into this calculus as well, which is worth remembering.

Dylan Lewis: All right, coming up after the break, we dig into two upcoming IPOs including one that could benefit from some iPhone buzz. Stay right here. This is Motley Fool Money.

Welcome back to Motley Fool Money. I'm Dylan Lewis, joined in studio by Bill Mann and Jason Moser. For the past year, we have been lamenting the lack of IPOs and new splashy names coming public. We've got a couple new ones to look at. We're going to start with the year's biggest. Bill, shares of Arm Holding listed on the Nasdaq this week to an incredibly warm reception at listing company's worth $60 billion shares up 25% on the first day. What is behind the buzz?

Bill Mann: Do you consider that to be a successful IPO?

Dylan Lewis: I think, for buzz, certainly for the people who own shares and sold them to the market. I don't know.

Bill Mann: See that's exactly where I was going. SoftBank, which has had, I guess we could describe it as a fairly bad decade so far.

Dylan Lewis: It's been a little rough.

Bill Mann: It's been a little rough. Their Vision Fund, $100 billion venture capital fund is less than $100 billion by quite a bit now because of poor choices and poor outcomes. They desperately needed a win. I feel like they engineered a win by under-pricing the Arm IPO to make absolutely sure that they got this pop. When you think about the selling shareholder, and it is only one in this case. How much money did they leave on the table to make sure that they get good marketing news. So far, about a billion dollars.

Dylan Lewis: It's quite a bit. It's a business that legitimately could have used that money.

Bill Mann: They legitimately could have used that money. Now, they did go out, and so Apple got shares and was investing at the IPO and Nvidia was. SoftBank has given a number of its customers a really good deal and some really good news with a quick hit off of an IPO that I think was somewhat underpriced.

Dylan Lewis: For folks that maybe aren't familiar with this name and are just learning it for the first time. There's a little bit of a hint at what this company does with some of those businesses you just mentioned. Jason, this is a company that is squarely in the smartphone world. They are heavily involved in a lot of the tech that we have in our pockets and I look at the involvement from some of the big tech names. Bill mentioned, Apple, Google, Nvidia in there too. But pick any company that makes chips and they were probably exposed to this in some way and probably an investor in some way says a lot about where this company fits into the smartphone ecosystem.

Jason Moser: It's essential. I think this is really one of those companies, we talk about companies if they shut their doors tomorrow, the world would feel that impact. This is one of those businesses for sure. Now that being said, that doesn't mean you just go out and buy the stock because it's supposed to be a great company. I thought it was really funny and I hate to say this is funny, but it was funny. I saw an interview with Aswath Damodaran, I think it was yesterday on TV. They were asking about Arm and he said, listen, everything else being equal, this is a SoftBank story, and when you see it's a SoftBank story, you run the other way.

Bill Mann: That's right. Well, what is a Columbia Business School professor know?

Jason Moser: That to me was very telling. I think in regard to the valuation part of that, we've got demand for this stock. I think part of it is a function of this excitement for an IPO, but also the fact that there's a very limited supply of shares that were actually floated on the market for purchase in the first place. The valuation looks out of control. This is a company that generated $2.7 billion in revenue over the last year. We see that valuation hit upwards of $72 billion I think at one point. You're talking a 25-30 times sales. Somewhere in the neighborhood of 130 times earnings. I'm not saying this is a bad business, I think it's a good business, it's an important business. But I think it's also one to listen, we've learned a lot of lessons over the last few years here. Let's put those lessons to work; be patient, let this thing come back then it might make more sense.

Bill Mann: Here's your tell, this morning, Instacart, which is going public this next week, raised the price of its IPO up to $28-30 a share based on Arm's successful IPO. I've said this before, but IPOs are sold and not bought. To individual investors who get excited about IPOs, just know that you are being sold something at a period of time in which it is at the leisure of the seller.

Dylan Lewis: It's a good thing to remember there, Bill. From cutting edge tech to the cobblers of the 1700s, there's a new old name coming to the market soon as well. Jason, Birkenstock. I almost wore my Arizona's to the studio today, but I wanted to make sure I was keeping things formal.

Jason Moser: I love this so much.

Dylan Lewis: You looked at the company, what did you see?

Jason Moser: I feel like you came up with the title for this specific show, they're the cobblers of the 1700s, that was good. I tell you, I was a bit surprised in going through this company's F1. As I really thought I would be a little bit more dismissive, they really started to capture my attention. They tell a very good story. As the great Cosmo Kramer once said, you don't sell the steak, you sell a sizzle, [laughs] and they are selling the sizzle. Look at this, a brands at 1774 and you hear the word footbed mentioned in the F1 109 times. Yes, that's proprietary technology for a shoe company. I just find it amazing because, hey, listen, I had a pair of Birkenstocks in college.

Bill Mann: You still have them, don't you? Come on. 

Jason Moser: Possibly. We'll get to that later. But when you look at the actual numbers here it's really impressive. In 2022, they generated $1.24 billion in revenue. They had a gross margin of 60%. They have been able to grow revenue 20% annualized from 2014-2022. I get it. Everybody needs shoes, but I think when you start looking under the hood and you see how well run this business is and how diverse it is, yeah, you could think maybe this is really a European story, not so fast, 54% of revenue generated from the Americas versus Europe's 36. The only thing maybe makes you wonder a little bit, it tilts very far toward the female spectrum. 72% of their customers are women versus 28% men. But all things considered, while I'm not saying I'm excited for this thing to go public, I certainly I'm going to enjoy following the story and learning a little bit more.

Dylan Lewis: Jason, you had them in your dorm room so did I. I have continued to buy them over the years and have them waiting for me when I get at home those comfortable footbeds. Bill, one of the things I think about when I look at a retail brand and a consumer name like this, especially in fashion, is these can be highly cyclical businesses and businesses that catch lightning in a bottle. Is that something you worry about with a company like Birkenstock?

Bill Mann: Absolutely. I would say that Birkenstock is a luxury brand. We might not think of it, we think of it as being the thing that you're going to see it on My Morning Jacket show in volume, but it's a luxury brand. It is owned 20% by LVMH, which is the largest luxury brand house in the world. They are having their fashion-forward moment, like you find Birkenstocks now in Vogue Magazine, they were in the Barbie movie. It is not for nothing that this company was bought by private equity a little more than two years ago for $4.3 billion and it's being sold now at $8 billion. Just to go back to what I was saying before about IPOs, and I'm not making any commentary about Birkenstock, I am saying that it is being sold very well so investors who might be interested in the name, probably good just to wait just a little bit and let them get seasoned as a public company.

Dylan Lewis: I have a thread between these two; Arm Holdings and Birkenstock, and I'm going to run it by you guys, bear with me here for a second. I see a similarity in that these are two businesses that nailed it with their design and architecture and are now enjoying the long term benefits, does that feel fair?  Bill Mann, Jason Moser, we're going to see you guys a little bit later in the show. Up next, we've got to look at the origin of the meme stock story. Stay right here. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money. I'm Dylan Lewis. Remember back in early 2021 when everyone was stuck at home and a small corner of Reddit became the epicenter of an investing movement? This weekend, a movie recounting the drama of GameStop and WallStreetBets hits theaters. It's called Dumb Money and it's based on a book called The Antisocial Network by Ben Mezrich. Head of the nationwide premiere of the movie, we caught up with Ben about his latest book turn movie, the pace of writing in today's entertainment age and what buy and hold investors need to remember from the Meme stock saga. Ben, this Friday of your book, The Antisocial Network will hit the big screen as dumb money. How does it feel to see another one of your books come to life like this?

Ben Mezrich: It feels like a miracle.  It's so hard to make a movie, especially a movie aimed at adults that doesn't have superheroes running around in capes and it's just wild that it happened again. It happened just incredibly fast. We were living through the GameStop drama just two years ago and now here we are. But it's awesome. It's just as good as it gets for an author.

Dylan Lewis: It's been fun to see all these characters I know and follow start to become the Wall Street insiders and the characters that they are in the book. I think in some ways the material and the characters are somewhat fresh to us. It's relatively recent and its history that we lived through with the GameStop saga and the short squeeze of 2021. But I also feel the pandemic has made everything from the last couple of years feel it was maybe a decade ago. For folks that haven't been following the story over the last couple of years, can you just kind of walk folks through it?

Ben Mezrich: Basically, this happened in the worst part of the pandemic, pretty much when everyone was stuck at home. Stay home for two weeks and everyone was pretty much locked up and wearing masks everywhere. In the midst of all that, this dude in his basement, basically, started live streaming about a stock that he loved, GameStop. You know GameStop? It's that place we all go to buy video games. It's in the mall. It's a store that is very odd when you walk through it because there's a Mickey Mouse stall next to a chainsaw. [laughs] It's the oddest store in the world, but we love it. It's basically doing very poorly at the time because it's a pandemic. They've been run poorly, they're running out of money. Big hedge funds are shorting it, which means they're betting that it's going to go down to zero and go bankrupt. This dude in his basement who called himself Roaring Kitty starts making all of these videos saying this stock is going to go to the moon. I love this stock and everyone's making fun of him. Then slowly but surely he builds this following on Reddit. That's really where the main place it was happening on something called WallStreetBets, which was a very irreverent full of bad words and all this stuff, Reddit board and by the end of the story, there's nine million people on Reddit all buying this one stock to stick it to Wall Street. It becomes a battle between regular people and rich people. It was epic at the time. It happened really fast. The stock from three dollars and something to $500 in a period of a few days. All because regular people were throwing a few $100 in here and there just to fight Wall Street.

Dylan Lewis: I distinctly remember the experience of all of this happening. Because there's an indicator for me as someone who works in the media of this world. Where if I start hearing from friends and family members about something, it has officially broken into the mainstream and become something that everyone is paying attention to. That was certainly the case with this story back in 2021. What got it on your radar and what made it something that you wanted to tell?

Ben Mezrich: I've always been kind of a gambler and I've always been a penny stock person and I've always been someone who's attuned to all that. I've written about this stuff a lot, going all the way back to the MIT Blackjack team. It was Wednesday morning in the middle of that week when everything went crazy with GameStop. I was watching the price action. I was like, this is completely insane. I started getting emails from lots of people and tweets from lots of people saying this is something you should be writing about. You got to be writing about this. I thought about it and I was like, I wonder if I have enough sources. Can I get to Roaring Kitty? Can I get to these hedge fund guys? At this point in my career, I know a lot of people and I know how to get to people. I realized I think I could. That night I wrote a 12-page book proposal. I sent it to my Hollywood agent first and by Friday of that week, we had a bidding war with five studios bidding on it. It was literally two days later and I sold it that Friday night at midnight to MGM Studios and then I sold the book on Monday morning. I hadn't written anything. Ye I had a 12-page proposal already. Screenwriters were jumping in. Studio was jumping in. It was nuts. Then I just dove in. I was writing it while it was happening because I was writing as they get to the congressional hearing, I was writing through every beat of that story, which was nuts. Melvin Capital was still in existence when I was writing. [laughs] It was really deep in the story, but I wrote the book very quickly. I think it was 12 weeks from start to finish and we had the movie in development. It's wild when it happens like that. But it was a race too. There were other studios trying to make it. It was Netflix was doing something. HBO was doing something. There were a dozen other projects. I knew that the key was getting a book together before everybody else.

Dylan Lewis: For the aspiring writers out there that are listening to the show, would you recommend that writing process?

Ben Mezrich: The aspiring writers hate me. [laughs] No, I love the in aspiring writers. This has become my methodology. I've always been a quick writer. Bringing down the house I wrote in 11 weeks, the social network book, I wrote in about 11 or 12 weeks. I just write it in three months. That's it. I write a book every three months. I don't recommend it because it's torturous. It's a very difficult way to live. Basically, be delusional and insane and confident enough that you lock yourself up and just write the book. But on the other hand, everything is so fast paced now, a story breaks and it's huge and then it's gone and it happens like in these arcs over and over again. If you want to make something that resonates that makes it to a movie or a television show, you have to move very quickly. You can't take three years to write a book if you want to see it on the screen and have people love it. I think you have to move fast if you want to be in this field. Every writer is different. I have a different process than a lot of other writers and it's just the way I've always been.

Dylan Lewis: Here at the Fool we are all about the average retail investor, that is our audience, that is our bread and butter. That's what we do. We approach it perhaps a little differently than the more trader world of WallStreetBets. But we are long term buy and hold. We are very much about people being on the ground and understanding these businesses that they own, being invested in them and really following them. I'm curious, we have the retail investor and hedge fund story here with Money and with your book. But what about the class of investors in between, that is maybe retail but not necessarily the speculative retail? More in our lane of long term buy and hold, do you feel there are maybe takeaways for that group?

Ben Mezrich: That's a great question. I think that they're on the sidelines in this story to some extent because the volatility is so insane that you can't really think rationally in that moment. You have to think emotionally because that's how both sides were thinking. To be fair, it wasn't just retail that was being emotional. You saw Gay Plotkin double down on his short even as the stock is obviously exploding and that's essentially in one way led to his demise. I think that there's emotions on both sides. I think if you're taking the stance that the fundamentals matter, let's find something to hold for the long term, you have to look at a much longer window and not be frightened by these little things that go on in between. But then again, I think you're going to lose out on a lot of things too, if you're not paying attention to the emotion of the moment. But I do think things are changing. I think that you need to work the irrationality into your models. You need to work social media into your models. The idea that something can catch and it's not really going to be relevant how much money the company makes if they either piss off the retail trader or that the retail trader falls in love with them.

Dylan Lewis: I think it has to be something that we process and are used to ingesting, even if it's not something that we are participating in as part of the wave.

Ben Mezrich: Exactly, I think so. Listen, participating in the wave can be very dangerous. You need to get in at the right time and get out at the right time. I, myself was watching this whole thing happen and writing about it as it happened. But I was terrified to actually buy GameStop until I did end up dabble in and out. But it was hard to pick. You can never pick the top and you can never pick the bottom of something like this. It's nearly impossible to do. You either find something that you fall in love with, which is what Roaring Kitty did, buy it and hold, which is what he did. He still holds, supposedly. That's a probably better way to face GameStop, is buy it in the beginning and sit on it, although it's all the way back down at 17 now. But the idea is at least you can be comfortable that you didn't jump in and out, just trying to make a book that you found something you liked. I don't know. I think falling in love with the stock is a good thing. Not a bad thing as long as you can live with it.

Dylan Lewis: The book published in 2021, the movies now coming out in 2023. Is there anything in the years between that you would have loved to have been able to talk about and bring into the book? Because this was a story that was moving so quickly and developing so quickly.

Ben Mezrich: That's a great question. I think that some stuff came out afterwards about Ken Griffin and Robin Hood in the mystery that went on there. When Robin Hood got rid of the buy button for a little while and destroyed and crater the stock, it could have made a good epilogue. I don't know how much you can say in a book with Ken Griffin rumbling around as the villain. [laughs] You have to be a little careful. But I think there's a little bit to go into there. A lot of game stop. People are still very much believing that the thing is still to happen. That it was the sneeze and not the squeeze. I think there's something very interesting about that part of the story. You could go into in a chapter for sure and see whether there's reality to that or not. It's very heated. It's incredibly heated discussion, but it would be fun to a look at that and see where that leads. It's a rabbit hole that I don't know where it goes. Yeah, I think I could get into that stuff for sure in a chapter or two afterwards, but I like people to talk about. I think that to me, there's something about an origin story, the social network is a perfect example. Most of the Facebook story happened after the social network. The social network is just that first year. Just like if you watch the Marvel movies, most of Wolverine's story happens after the movie Wolverine. You don't tell that story because later on he joins the X Men. You want to tell the origin of something and I think that Dumb Money is the origin of the mean stock movement and the social network is the origin of social media, really. That's my goal, to tell the origin story. 

Dylan Lewis: Dumb money is in theaters beginning September 15, and Ben Mezrich's, next one, Breaking Twitter is out this fall. No need for speculation. We'll be having him back when it hits shelves. Coming up after the break, Bill Mann and Jason Moser returned with a couple of stocks on their radar. Stay right here, you are listening to Motley Fool Money. 

Dylan Lewis: As always, people on the program may have interest in the stocks they talk about, and Motley Fool may have formal recommendations for or against, so don't buy or sell anything based solely on what you hear. I'm Dylan Lewis, joined again by Bill Mann and Jason Moser. We've got stocks on our radar coming up in a minute. But before that, we were talking airlines early in the show, gentlemen. It's not all bad news in the friendly skies, at least if you are Delta Airlines, the company announced that seven times Super Bowl winner and goat, Tom Brady will be a strategic advisor to Delta. He will be working with Delta's employees on on-boarding cultural familiarity and immersion. Bill, could you imagine a first day orientation pep talk from TB?

Bill Mann: I know where their profit warning just came from. [laughs] The talk would go something like this, "Look, most of the money in this room is right here. But I need you to do your job better." I don't know what he's going to say.

Dylan Lewis: I've seen him on the sidelines. He gets hot.

Jason Moser: The first thing that came to mind here, do you remember that episode of The Office? Dunder Mifflin getting acquired by Sabre. They show that little video of touring the Saber campus and out of nowhere there's Christian Slater and he starts talking about the merits and the values and virtues of Sabre. He has that line, "Have you ever tasted a rainbow? At Sabre, you will". 

Dylan Lewis: That's pretty good. I think if you're looking for ties and maybe how this makes sense. Brady's mother worked as a flight attendant, so he has a soft spot in his heart for the airlines, which I think is interesting. It's a good tie. It's a little thin. To me, it's not as on the money as Amazon Prime Studios linking up with Coach Prime, Deon Sanders, for a docu-series about Colorado football. I'm curious, Jason, if you were to link up a celebrity with company, wave a magic wand and make it happen, what are you doing?

Jason Moser: My mind immediately goes to golf, just because I've played golf all my life and Chipotle is a close second there. My two worlds came together recently when Viktor Hovland, a Norwegian professional golfer, recently won the Tour Championship at East Lake and in Atlanta. After he won, you saw him wandering around the grounds. He's just sitting there munching on Chipotle chips in guacamole. There are like videos all over Twitter and social media with him doing this. It's just like it's an ongoing ad for Chipotle and if you watch interviews with Viktor, you see very quickly like he's got his wits about him. He's a long-term-thinking kind of guy. I bet you he's a pretty good investor. I think tying up Viktor with Chipotle would be a pretty good move.

Dylan Lewis: You're telling me they couldn't write something with On The Green and avocados and guacamole, come on.

Bill Mann: You're writing it right now.

Dylan Lewis: You're welcome.

Bill Mann: Give us a call.

Dylan Lewis: Bill. What about you?

Bill Mann: Man, I feel like Timberland needs to be doing Timberland.

Dylan Lewis: How has that not happened?

Bill Mann: How is that not happening?

Jason Moser: He did it for them.

Dylan Lewis: You got to love that. Let's get over to the stocks on our radar. Our man behind the glass, Rick Engdahl, is going to hit you with a question. Bill, you're up first, what are you looking at this week?

Bill Mann: My company is Charles Schwab. Talk to Chuck. Charles Schwab, over this last week has completed its merger. Well, it bought TD Ameritrade a couple of years ago, but it has finished the merger of the customer experience. If you had a TD Ameritrade account, you now have a Schwab account and as always happens, a lot of times you have either individuals or businesses who move their accounts at that point and it's a normal attrition, but we're about to find out what that level of attrition is going to be. Schwab is a company that I really admire, but when you ever you have a change like this, it's hard to track.

Dylan Lewis: Rick, a question about Chuck?

Rick Engdahl: Yeah, I had a TD Ameritrade account and I had a Schwab account. Now, I have more Schwab accounts. I don't really care. Why would people leave?

Bill Mann: Well, I appreciate that, but a lot of times advisors will leave because of margin rates or because of services they get with one broker or another, and there may be things that they got from TD Ameritrade that Schwab is not going to provide. To me, that is a little bit of who's holding the conch shell. 

Dylan Lewis: Well, it's an interesting point because we generally think of brokerages as being incredibly sticky Bill, and the switching costs being pretty high. But are you saying it's more of a concern for people who maybe manage other people's money than the retail investor or the average investor?

Bill Mann: Yeah, I think so. If you think about it, yes, they are very sticky until you're given an excuse to pay attention and maybe to change your mind. Schwab has this built into their model. When they bought TD Ameritrade, they knew at some point there'd be a migration and they also knew at some point that there would be an attrition of some level of accounts. But it is very important, especially given the year that Schwab has had. If you remember, Schwab was one of the banks that was pointed to in the aftermath of Silicon Valley as being under stress. I thought that was overstated by a lot, but it was out there, and so Schwab has not had a great year so it's a very interesting time for them to be doing this transition.

Dylan Lewis: Jason, what do you have in your radar this week?

Jason Moser: Yeah. Taking a look at PayPal, ticker PYPL, the disdain for this company right now is palpable, everybody hates it. I would say that's partly deserved. I also don't think it's something that lasts forever. At the end of the day it's still a business of 431 million active accounts that saw 6.1 billion payment transactions last quarter, representing 10% growth from the previous year. But we saw this week it's expanding its relationship with Uber. That's a great thing. Any time you're getting in deeper with Uber, I think because that's another tremendous network and Uber will continue to leverage that PayPal Braintree platform to expand things like debit network, routing value-added services, the hyper wallet solution and whatnot. They're launching combined incentives with the Uber 1, which I think is a smart move as well. Uber is becoming more and more of a commerce app and I think PayPal becoming more and more a part of that is not a bad thing at all.

Dylan Lewis: Rick, a question about Paypal.

Rick Engdahl: Yeah. Paypal owns Venmo.

Dylan Lewis: Correct.

Rick Engdahl: Venmo is a sleek little app that everybody uses. But Paypal itself still looks Y2K. Why is that?

Jason Moser: Well, I think that's one of those unforced errors. They had this mindset not too terribly long ago to go into that super app mode and try to become all things to all people. I think that took a little bit away from the innovation of the Paypal platform. It'll be interesting to see how this new CEO stepping in decides to approach that problem.

Dylan Lewis: All right Rick. You got two very different companies here. Which one is going on your watch list this week?

Rick Engdahl: Neither one really. There are two foreign companies to me.

Dylan Lewis: You got to pick one. I'm going to put you on the spot. You got to pick one.

Rick Engdahl: I'll pick Schwab.

Dylan Lewis: He's talking to Chuck. Rick. I always appreciate you weighing in on our radar stocks. Bill, Jason, always appreciate you guys coming on the show and bringing it every single week that's going to do it for this week's Motley Fool Money Radio show. Show is mixed by Rick Engdahl. I'm Dylan Lewis. Thank you for listening. Catch you next time.