🧁 “Frosted Freaks” — Kellogg’s Nutella deal. Netflix’s Anime AI. The Pentagon’s rare earth stock.

0:28This is Nick. So we should buy 7-Eleven a slurpee. Big gulp, you never looked younger. Jack, three stories for today's team boy. What do we got on the pod? For our first story, Netflix's most popular content, viewed by more than half of subscribers, is anime. But plot twist, Japanese anime shows the first way that AI could be used by Hollywood. For our second story, the Pentagon just opened up its Robinhood account to buy$400 million of stock in a rare earth metals company. Never have said those words before, Jack. So when the government buys a private company, is that strategic or is that socialism?

1:09We'll answer it. And our third and final story, Kellogg's sugary cereal brands were just acquired by the Italian candy company that owns Nutella. But this deal ain't about Frosted Flakes, Yetis. This deal is about tigers, toucans, and frogs. But Yetis, before we hit that wonderful mix of stories. Whoa, what a mix of stories to go into the weekend with. Love the mix, Jack. We have a great idea for what you should do this weekend. Buy FireFest. Buy FireFest. Because FireFest, the infamous music festival, is on sale. On eBay. FireFest, the 2017 Caribbean music concert that wasn't. Founder Billy McFarlane promised Instagram models yachts and Blink-182s.

1:50But instead, you got one cheese sandwich on white bread. That's it. and a Red Cross emergency cot to sleep on. Now, because of that, Billy went to jail for fraud and Hulu made a couple documentaries. Well, Billy's out of prison now. And he actually flirted with the idea of doing a second Fyre Fest. But instead, maybe because he owes a lot of people money, he's going to sell it. The Fyre Fest brand, the IP, the trademark, and the social media handles, they're all on sale. You can buy it all right now, today, on eBay. Nick and I are looking at the eBay page right now. I got it up, Jack. You can make a bid to acquire the biggest brand flop in history.

2:29Okay, and so far, FireFest has 27 ,000 views on eBay and 114 bids. And the latest bid is$205 ,000 and$500. Jack, are you saying$205 ,000 for the best-known concert in history that didn't even happen? Yep. And if you own this IP, you could legally launch and produce another FireFestival. Or Jack, you could sell Fyre Fest merch. Or you could sell Fyre Fest branded cheese sandwiches on white bread. Or maybe a Blink-182 CD case with no CD inside of it. That would sound just right. And we would sell it. Now, besties, we should point out that Billy is guilty of defrauding investors for$27 million. So there's a slight chance somehow this whole thing doesn't work out.

3:14But hey, Jack, Ja Rule says this thing is only going up. He does? Yeah. Maybe we should place a bet. He said it's impossible to lose money. You placed a plan. What are three stories?

3:50Start the show. First, a quick word from our sponsor.

4:01Monarch. Yetis, you know my first money lesson? It was where to put our lemonade stand. I was wondering, it was on the Upper East Side. Do we do it on Lexington Avenue or Park Avenue? Wait a second. New York City has lemonade stands on the sidewalk? They didn't. We were pioneers, Jack. Lexington Avenue is more commercial. Park is more residential. So what did we learn, Jack? Families are willing to pay more for lemonade. So you set it up on park. Yeah, we did it on park. Besties, no one gives you financial lessons in life. You end up figuring most of it out as you grow up. But we love Monarch because it's like a financial advisor in your pocket.

4:29Because every minute, it's tracking your savings, spending, investments, and more. For instance, Monarch's goal tracking feature shows if you're on track for that summer trip to Santa Fe. And it tells you what percent of your income is going somewhere that's a surprise. I open Monarch all the time because it takes the mental load off tracking my finances. And whether you're single, you're in a family, or you're dinking it up, Monarch's the way. Our personal fave, the AI Weekly Recap, a once per week gut check on what you did with your money. Hey, Nick, you've spent 96 bucks at kids' lemonade stands since July.

4:54Because we pioneered it for him, Jack. Resties, write your own story with Monarch. Use code TBOY at Monarch.com to get your first year of Monarch Core half off at just 50 bucks. It's 50 % off your first year at Monarch.com with code TBOY. Another nine. Yetis, we've all heard of side hustles. You find a way to make extra income on the side of your day job. But what if your side hustle was more of a side leisure? And what if it involved hitting golf balls every minute of the day? I think that's called a hobby. Actually, no, this is the real idea behind launching a franchise of Another Nine, the ultimate indoor golf experience.

5:30Another Nine is a network of golf simulators open 24-7. The business is built around private simulator suites that guest book by the hour. And it's powered by the same TrackMan technology used by the PGA Tour. Now, Besties, we're not talking about playing golf here. We're talking about a franchise opportunity to open up one of these things and run it. And it'd be semi-passive income. There's no staff needed on site. So there's some management required while the golfers are swinging woods, but not so much management that you'd need to commit to this fully. Actually, Another Nine was started by a couple of guys with young kids who just wanted to play more golf anytime they wanted.

6:01Now they've got 70 locations and want to add more. You could be number 71 by launching Another Nine franchise near you. So head to www.franchise.anothernine.com to run one of your own. That's www.franchise.another9.com. For our first story, Netflix has a secret content type that is more popular than any other. Get this, it's anime. Half of the Netflix-watching world watches anime. Half. And that holds a lesson for all content creators. You know what, Jack? Let's just kick things off with that hero stat again because it was so wild. Why don't you repeat it for us? Netflix shared last weekend that anime is watched by more than half of all Netflix members.

6:47Okay, let's sprinkle some numbers on here. Yetis, that is 150 million households. We're talking 300 million people watching anime. They're watching anime on Netflix. Anime, the Japanese style of cartoons. Basically, if you're not watching anime on Netflix these days, you are in the minority. And yes, Dragon Ball Z counts as anime. But hey, Pikachu, we're not just talking Pokemon and Yu-Gi-Oh over here, are we, Jack? I'm not sure if it's Yu-Gi-Oh or Yu-Gi-Oh. Interestingly, recent anime hits have spanned genres. There's action shows that are anime. There's sci-fi anime. There's fantasy anime, of course.

7:22But there's even romance anime. And animation has become the big trend in broader Asian film in general. China got its first ever$1 billion box office movie this year, and it's animated. But it is Japan's anime that has some very unique economics. Hollywood actors are pricey, but animation is just as popular for viewers, but at a much lower cost. And that anime viewing on Netflix has tripled in the last five years. But Jack, what is the reason for this tripling? It's dubbing. That's the reason for the tripling. Yet is the magic of anime is that it is originally made in Japanese, but it is now being dubbed into every other language.

8:03The most popular anime show on Netflix right now is called Sakamoto Days, about a hitman turned family man. Now get this, the first season of that show hit Netflix's top 10 chart in 54 different countries. Again, it was originally done in Japanese, but then dubbed into 33 other languages. I mean, Jack, sure, of course it was a top 10 in Japan, but it was a top 10 in Korea, in France, all the way over in Argentina. And 51 other countries, Nick. Yeah. Now, one reason for this is creative. The themes in this show are universal. Love, hate, friendship, family. Those are themes that the whole world enjoys.

8:40They cross borders. But the other reason is practical. Anime is cartoons, and cartoon mouths can have any language coming out, and it doesn't affect, like, the visual audio experience. Call up Carmen Sandiego and she'll write different languages into all those mouths. So currently, we should point out, Netflix is dubbing these anime shows into English using English-speaking human voice actors. But Jack, pause the pod. You know that Netflix wants to replace those human voice actors with artificial intelligence. Netflix is a tech company. Well, what did we notice on the Netflix job board the other day, Jack?

9:17Right now, Netflix has job postings for AI researchers focused on language and voice technology. And the pay? Up to$700 ,000 a year for these AI dubbing jobs. You can get paid up to$700 ,000 a year to help Netflix make the ninja Naruto speak Croatian. Look, AI translation is a threat to voice actors, but an opportunity for others. So Jack, what's the takeaway for our buddies over at Netflix? AI is fluent in every language, and that is a huge scale hack. Yetis, last year, we covered Reddit's best day ever on the stock market. What happened, Jack? The stock jumped 40 % on one day on news that Reddit is using AI to translate all of their written content to all of the languages on Earth.

10:06Almost instantly, Reddit's opus of online content multiplied its market exponentially with AI. Now, we should point out, in Nick's and my 2022 predictions pod, we said that Netflix would multiply all their local country content to all languages using technology. It looks like our prediction was just a couple of years short, but it was right. There we go. But it's not just Reddit and Netflix. Every content creator is eventually going to use this AI translation, especially for content that has universal themes. Yeah. So I don't know if like translation of this T-boy podcast is going to work in every language.

10:39You know, like I'm not sure how Japan's going to feel about this, but - Yeah. How is Kauki Critics going to translate into like Dutch? But no matter what yetis, AI's language fluency is what multiplies content at no cost. And that is a huge scale hack.

10:58For our second story, the Pentagon just bought$400 million of America's only rare earth metals company. It's a wild story. It is. We've never seen the military make a stock market purchase before. But is this strategic or is this socialism? Yetis, there is no rock more valuable than the rare earth metal. If you're getting engaged, don't get her a diamond ring. Put some scandium on that finger, baby. We've described this using a Marvel superheroes reference. These are the infinity stones of the real world. Terbium, lanthium, deprosium. Those are the key ingredients in your electric vehicle, your laptop, your iPhone, your air conditioner, and even your PlayStation.

11:42But also our fighter jets. Good point, Jack. Which makes this next sentence a huge problem. China controls 90 % of the market for rare earth minerals and rare earth magnets. Wow, a 90 % monopoly. Yeah, during the trade war, China's lock on rare earth matters is their literal Trump card. That's why in April, Jack and I said that the U.S. must reach a deal with China in the short term because our economy is screwed without these rare earth metals. But we also said that in the long term, we need to invest in our own rare earth metals. We have them. They're just underground and they take years to extract.

12:17Well, Jack, perfect timing. Here's the news. The U.S. Department of Defense just bought$400 million of stock in an American rare earth mining business. I'm sorry, the only American rare earth mining business. The Pentagon is now the biggest shareholder in this company. And you know what, besties? Wall Street noticed too. Shares of MP Materials surged 47 % on their surprise new investor, the Pentagon. Nick and I have never seen a deal like this in our lifetimes, except maybe the bailouts during the 08 financial crisis. So besties, here's the dirt on the deal. Literally, it's a dirt deal. MP Materials owns America's only active rare earth mine, like we said.

12:56It's located in Mountain Pass, California, which is just outside Las Vegas. And they produce metals and magnets for electric cars and fridges, but also for drones, military submarines, and F-35s. Now, here's the interesting part of the deal. The Pentagon is also giving this company a$150 million loan to develop a second rare earth metal mine. And for 10 years, the DOD gets first claim on 100 % of the magnets and minerals that come from that second mine. Like, so if the Pentagon needs some scandium, they will call up this mine and they get it first. And there's one more kicker. The Pentagon is going to guarantee a minimum price of$50 per pound of minerals, which makes the investment less risky for this mining company.

13:41So Jack, I'm just going to add all this up for a sec. Our Pentagon is now the biggest shareholder and lender and customer and price guarantor of this rare earth metal company. That's how serious this issue is. Yeah. But it also leads to a question. So Jack, Jack, what's the takeaway? That's a question for our buddies over at the Pentagon. Is this strategic or is this socialism? Now, yeah, it is. The U.S. government taking partial control of and dictating the terms of what a private company can do? That sounds like the definition of socialism. Literally. And of course, the U.S. has many socialist elements.

14:19Our schools, our fire and police departments, our post office, it's all socialism. But on the other hand, this is also the kind of thing that America does and we've done before in war for national security. So we'd probably call this strategic socialism. Yeah, to answer our own question, it is neither socialism nor strategic. It is both strategic socialism. And we're all for it. Because the status quo situation with rare earth metals, it's a market failure. The government must intervene. It's just too important. So besties, the Pentagon is buying stock in a mining business. That is wild news. We call this strategic socialism in the name of national defense.

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16:51Terms and conditions apply. See offer page for details. For our third and final story, Kellogg is getting acquired by the owner of Nutella for three billion bucks. But the Italians aren't buying American cereal for the cereal. No. They're buying it for the mascots. Jack, 1894 breakfast changed forever. That's the year that Dr. John Harvey Kellogg left some dough out overnight by accident up in Michigan. And the next morning, he and his brother William Kellogg tasted those dried up flakes, and you know what? Yeah, this is pretty good. That's how cornflakes were born. By accident. It's an accidental invention.

17:36Then they sprinkled some sugar on them and turned it into a$1 billion business. Kellogg would go on to create Rice Krispies, Fruit Loops, and Frosted Mini Wheats. Ah, the greatest hits. The Kellogg's Cereal Company is the best thing to happen to the American dental industry. By the way, my latest appointment - Talk to me, Jack. They told me I had something that was looking like a cavity. I've never had one, so I don't even know, Jack. It's completely unfair what's happened to my mouth. I'm sorry. You're almost at the dozen mark. Congratulations. I floss like every other night. You're blaming the toothbrush over here, Jack.

18:07I'm not sure you're supposed to do that. But besties in 2023, Kellogg's split off its cereal division because snack sales were surging, but cereal sales were slumping. And one benefit of splitting up your company, it makes the smaller pieces more acquirable. Well, here's the news. Ferrero, the Italian candy company, is now buying Kellogg's cereal for$3.1 billion. The stock surged on rumors of the news on Wednesday, which was made official on Thursday. That's right. The owner of Nutella is adding Tony the Tiger and Snap and Crackle and Pop to their cabinet. Are those things elves? It isn't clear, Jack, but either way, Hey, Italy, enjoy the carbonara a la raisin bran.

18:46But besties, this is what Jack and I got fascinated with. Like, what does this Italian candy company want in an American cereal business that's been shrinking? Ferrero is the third largest confectionery company on earth, which just means everything they make has sugar in it. They own Tic Tac, Kinder, Nutella. They're a pure play cavity company. And Ferrero is most famous for creating Nutella, Italy's greatest invention back in the 1940s. A greatest invention since the Renaissance, Jack. In fact, Ferrero buys 25 % of all hazelnuts on Earth to put into Nutella. But that wasn't enough. Last year, Ferrero bought all of Nestle's candies.

19:23Baby Ruth, Butterfinger, Crunch Bar, Keebler Elves. Now here's the interesting part, besties. Millennial moms hate sugar. And yet Ferrero is doubling down on sugar right now. They now have 35 separate candy brands. But you know what? It's working. Sales rose for Ferrero by 9 % last year to$22 billion. Their valuation is at a sugar high. Now, yeah, these other food giants out there, they've been diversifying into health. Like Hershey's just acquired that healthy popcorn brand that you love, Jack. Lesser evil. Right, right, right. And Pepsi bought Siete Foods and Poppy, healthier versions of their unhealthy options.

20:00But this Ferrero deal of Kellogg is the opposite. And it kind of confirms once and for all that Frosted Flakes and Frosted Mini Weeks have been candied this whole time. I don't know how we missed it with the frosted adjective, Jack. Gentists have been saying this for years, and now Wall Street confirmed it. So Ferraro isn't diversifying like everyone else. They're going back for seconds of sugar. Which I can't do because of my damn cavities. They say I have groovy teeth. Like funky teeth? No, there's like holes that just are impossible to properly brush. I think those are called cavities. Never mind.

20:35We may need to see a second opinion on this one, Jack. Max the Jack, what's the takeaway for our buddies over at Kellogg? This deal isn't really about cereal, it's about mascots. Yetis, for over a century, Kellogg has created some of the greatest IP, intellectual property, in food history. Knowing that kids were the target all along, the cereal company got into the cartoon business, with Tony the Tiger, Smacks the Frog, Toucan Sam, and I think a bunch of others. But we think Ferraro's real goal with this deal is to take those characters and explode them beyond cereal. The tiger mascot, Tony, is so well-known, why not make Frosted Flakes protein bars?

21:13Or Jack, we all grew up with Rice Krispie treats as millennials. Why not a Rice Krispie bottled milkshake? The growth potential isn't in the cereals, it's in the mascots. That's what this$3 billion cereal deal is all about.

21:29Jack, could you whip up the takeaways for us for the real Friday? Netflix's secret most popular content type is anime, viewed by more than half of subscribers. Soon, dubbing will happen with AI, and that is a huge scale hack. For our second story, the U.S. military bought$400 million of stock in MP materials, and they get first dibs on their rare earth metals. This is strategic socialism in the name of national defense. And our third and final story, Michigan's Kellogg cereal business is getting bought by Italy's Ferrero. This deal ain't about this cereal. This deal is about the mascots because they are great.

22:10By the way, hot take, those Krispy Kreme elves, or I'm sorry, the Rice Krispies elves, they're getting a TV show. What do you think? I'd watch that. I'd watch that. Dubbed. Dubbed. Dubbed. But yet is this pod's not over yet. Here's what else you need to know today. First, Andreessen Horwitz, the most famous VC in the world, has moved their legal dominion from Delaware to Nevada. It's another blow to Delaware, which used to enjoy the, quote unquote, Delaware default for incorporations. Delaware's reputation for corporate friendliness has waned, especially after a Delaware judge blocked Elon's huge pay package.

22:43And now Andreessen Horwitz is probably going to recommend to all their startups to move out of Delaware. And second, yesterday, McDonald's added a spicy egg McMuffin to the menu, but there's a strategy here. Well, I think the strategy is prevent me from having to ask for hot sauce when I order an egg McMuffin. It's already built in now. Yeah, McDonald's is also trying to show America that it's not too expensive by bringing more value items without calling them value items. Like the popular snack wrap, but at$3, the new snack wrap is more than double what it used to cost. Yeah, we're going to be in Chicago soon.

23:14McDonald's, we should talk. And finally, starting next week, Grok, X's very unwoke AI chatbot, is going to be riding shotgun in your Tesla. That's right. Elon announced it on Thursday on Twitter. You can ask Grok questions while driving your Tesla. Now, this comes in the wake of Grok's algorithm tweaks that did result in it praising Hitler. One other note from Elon, robo-taxi service could be coming to the Bay Area in the next month or two. They're just waiting for regulatory approval. Now time for the best fact yet This one sent in by Lycan Mangosta from Puerto Rico And Jeremy Daniel from the Dominican Republic This is a correction fact Because besties, earlier this week We said that Samuel L.

23:56Jackson was the only actor To be in both a Marvel superhero movie And a Star Wars movie Turns out there's a few others That have appeared in both franchises Although not nearly as much as Samuel L. Jackson did Natalie Portman was Queen Amidala In Star Wars Of course. She was also Thor's girlfriend in Marvel. Full disclosure, I've never seen any of the Thor movies. There also were three other actors who appeared in both, including Paul Bedney, Mads Mikkelsen, and Lupita Nyong. Although those last three were basically just cameos. So congratulations to them and their agents on a couple of really big paydays.

24:30And sorry for sounding defensive, I just - You have a cavity, Jack. So you're upset, you got a cavity. Dude, I don't even believe my dentist. I'm like, there's no way I have a cavity. Honestly, he may be testing your willingness to pay right now, Jake. Yetis, you looked fantastic this week. Celebrate some wins this weekend, like checking out our latest The Best Idea Yet episode on the Frisbee. We got that link in the episode description. Have a phenomenal weekend. Nick and I will see you Monday. And remember, if you are in the Midwest, grab some tickets to our live show in Chicago. We'd love to see you there in just two weeks.

25:06Kids are allowed.

25:11And before we go, a happy 20th birthday to Yeti Kai Anise from lovely Lake Worth, Florida. And happy birthday to Karen Silvers Brady in Orlando, Florida. And a happy birthday to Zach Herman from San Francisco, who's got so many fun facts, you gotta send us one a week, Zach. And Felipe, your manager, says HYH-TBOI. And Elaine D 'Alkin from West Palm Beach, Florida, is learning to finally swim this summer. Fantastic goal for a birthday. Happy birthday to Rebecca Reed from San Jose, a loyal Gonzaga alum and Metallica fan. And Henry Parco, happy fifth birthday down in Phoenix. Enjoy that pool party, buddy.

25:47Henry, don't drink the water. I know the water looks clean, but it's not. And a shout out to Andrew Zucker, who interviewed us for his awesome newsletter called Zucker. Check it out. It's got business, media, and tech perspective, baby. Congratulations to Jeff Haugen in Chicago, Illinois, for getting a new job with a 55 % pay raise. Get this, Nick. He's feeling so good right now, he's opening up a bar tab after our live show. He says drinks are on him. In that case, make it a Johnny Walker Blue Label. Celebrate the wins. This is Jack. I own stock of Netflix and Reddit, and Nick and I both own stock of Robinhood.

26:24Gusto. Yetis, there's nothing more satisfying on a Friday evening than celebrating the wins of our company from that week. Like how we triumphantly completed payroll paperwork right before the tax deadline. Just kidding. That's not a one to celebrate. But it is an annoying thing that we did have to do. Yeah, we did. Because if you're an entrepreneur, you're the HR team, the benefits team, the payroll department, and you have to be all those things before your morning coffee. Double digit latte. But you could be doing it all with Gusto. Gusto is an online payroll and benefits software built for small businesses.

26:52It's all-in-one, remote, friendly, and incredibly easy to use so you can pay higher onboard and support your team from anywhere. So save time with built-in automated tools like offer letters, onboarding documents, direct deposit, and more. And it's super simple to switch to Gusto. You can just transfer your existing data to get up and running fast and don't even have to pay a penny until you run your first payroll. Because you're not toasting a Negroni on Friday to celebrate that paperwork. Nope. So besties, try Gusto today at gusto.com slash tboy and get three months free when you run your first payroll.

27:18That's three months of free payroll at gusto.com slash tboy. One more time, gusto.com slash tboy.