🤔 “China’s Factory Revolt” — Trade war moves to TikTok. Moleskine’s Gen Z board. Zuck's FTC lawsuit.

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Yesterday, we asked you a trivia question. What famous toy was invented by a NASA rocket scientist? And the answer is... The Super Soaker. The billion-dollar toy that was created by accident in a man's bathroom. The Super Soaker. It's destroyed more sibling relationships than any other toy in the world. Mom! He shot me first! Mom, she shot me in the eye!

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It also became the top-selling toy in America in the 1990s, right after it debuted. Basically, where there was water, there was a Super Soaker. But few know the story of the Super Soaker's legendary founder. A black man who grew up in the segregated South. Lonnie Johnson was a NASA engineer who worked on spaceships, but side-hustled with water guns.

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Even after selling that brand to a big toy company, he had to sue to get paid what he was owed. We actually mentioned him during Black History Month. And we turned that fact into this entire new episode. So yetis, check out the latest episode of our weekly show, The Best Idea Yet. Because this week, we'll tell you the true origin story of the super soaker.

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Tap the link in the episode description to listen to our other show, TBIY. The best idea yet. Oh, also, we're going to tell you the secret to a successful side hustle. You're going to love it. But today's show is fantastic. Today's show, Jack, you should deserve a deduction. Jack, let's hit our three stories.

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that's it i don't even think they need to practice 50 that's a fat tip t-boy city on your at list if you know you know because we're ready to go we can't wait no more so just start the show start the show first a quick word from our sponsor

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For our first story, we've noticed a strange, shocking new battle in the trade war that no one is covering.

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Chinese factories are exposing American brands to influence how you buy. What we're saying is the trade war is now moving to TikTok. Now, yetis, Jack and I use social media for a bunch of research. We like to find trending stuff before it's in the news, before it's even trending. And this one has not been covered by the Wall Street Journal, Bloomberg, CNBC, or anyone else. And here it is.

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TikTok videos from Chinese factories are exposing the real price of your clothes. They claim to spill the beans that your Made in America brands are actually made in China. that the American brands you love are actually charging you 10 times more than they pay for those clothes. Here's a few examples of the videos we found on TikTok. These are wild. Let's hit them, Trey.

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Who is the Chinese supplier behind Under Armour? Shenzhou International, which is one of the largest clothing factories in China. It also supplies for many other big famous brands, such as Adidas, Nike, Uniqlo, Lululemon, and so on.

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Interesting. One company produces for all of those brands? Oh, and get this, Jack. That video got 1.7 million views.

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We have not seen retail profit margins of physical goods at like 90%. So we fact check those numbers by looking at Lululemon's audited financials. Because Jack, what's the one thing we happen to love in particular about the United States stock market? It's a bastion of truth. Yes, it is. Legally. If Lululemon lies in their earnings report, they can go to jail.

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All right, so Jack, let's whip out the latest copy of Lulu Lemon's quarterly earnings. What kind of numbers are we seeing? They pay 40% of the revenue in COGS, which are their costs of goods sold. So based on those COGS, that cost of goods sold, Lulu is saying the $100 pair of leggings that they sold you cost them $40 to produce. So Lulu says their leggings cost $40 to produce.

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TikTok says they're $5 to produce. Again, Lulu says it cost them 40 bucks to make those Align leggings. TikTok says you can buy them for five bucks straight from the factory in China. That's a huge difference. Which leads us to the even bigger story that's in our takeaway. So Jack, what's the takeaway for all our buddies watching these viral Chinese factory exposure videos?

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China just weaponized TikTok in the trade war. Yeti's full disclosure, we don't have proof of China's government being behind these factory exposure videos, and we're not saying that China's government is behind them. But TikTok's algorithm did push those three videos to 13.7 million users, even though each of the videos was posted from an anonymous TikTok account.

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And that's a reminder about a reality about TikTok. The algorithm is a black box.

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For our second story, Moleskine.

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The Italian notebook is 200 years old, but living its best life. Moleskine doesn't have age serum. They do have a Gen Z board of directors. True story. But Jack, let's talk art history here for a second. Pablo Picasso, he sketched in it. Vincent Van Gogh, drew in it. Ernest Hemingway, he took a shot of whiskey, a second shot of whiskey, and then he wrote, for whom the bell tolls, in it.

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Since the 1800s, Western artists have written and drawn in a book bound by moleskin. But it wasn't until 1997 that an entrepreneur turned that moleskin concept into a brand. Moleskin with an E at the end because that differentiated it. Now, to clarify, is there the skin of the mole bounding these books? That's a fair question. I'm sure Pete is asking it too.

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But technically, no moles were harmed in the making of these diaries, Jack. It just appears to look like the skin of a mole. So Moleskine IPO'd on the Milan stock market. They were a publicly traded notebook stock, but they're now privately owned, still based in Italy. And you probably got three of them as a graduation gift. It's the default diary.

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The only question is, are you getting lined pages or dotted pages? You've probably seen someone at a Starbucks scribbling their next great American novel on one of these. Or if you're like me, you were gifted one, and now it just sits in your man bag. Because you use your computer. But besties, this is what Jack and I found fascinating about this story.

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Or as Jack and I call it, the two original sins of social media. Because a decade later, meta dominates social media thanks to those acquisitions. And the US government is trying to undo both of those deals that it approved. Basically, the government is trying to control Z their approvals of the Instagram and WhatsApp acquisitions.

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Here's what's at stake. Should Instagram and WhatsApp be split from Meta?

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Well, that trial began on Monday and all of tech is tuning in. But the lawsuit for this trial was actually filed in 2020 during Trump's first term. Nick, why did it take a whole administration for it to go from lawsuit to trial? Well, Jack, because the commerce cops known as the FTC Federal Trade Commission took five years collecting evidence. Here's the news that Nick and I discovered.

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The FTC dropped the S-bomb on just about everybody in Silicon Valley. And by S-bomb, we mean subpoena. Subpoena. to figure out if Meta is a rule-breaking social media monopoly. The court is requiring others to provide testimony or documents in this trial. And in some of these cases, Meta is subpoenaing the competition that hates Zuck and Meta. If we ever got subpoenaed,

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we must respond truthfully under oath to whatever questions get asked. Basically, if someone did something bad, it is illegal not to tattletale on them if you're subpoenaed, right? It's illegal to not tattletale if you know they did something wrong. Yeah, like Jack, you know in Mean Girls, Regina George has that burn book where she rips on everyone? Yeah. A subpoena is like the opposite.