The Market Cap Game Show: Episode 7

MarketsMotley Fool

How much is Etsy worth? $65? $70? Maybe $75? Try $8 billion, Fool! Because of course we're talking market cap, not share price. And if you know the market cap, you know the price tag of the business. And if you know that, you might just beat Emily Flippen on this week's Market Cap Game Show!

A full transcript follows the video.

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This video was recorded on March 20, 2019.

David Gardner: A lot of talk, a lot of talk these days -- did you hear it? -- about the Lyft and Uber IPOs? April is supposed to be the month. People hear Lyft, they hear Uber, and the media, even the nonfinancial media, makes a real point of covering these stories. But here on this podcast, we wonder, what is the expected market cap of Lyft? Of Uber? Does the public at large even understand market cap? Are they able to evaluate the relative different price tags of companies like Lyft or Uber vs. other companies that -- well, to me, anyway -- are even more promising as stocks because they make money, they're worldwide leaders, they've already been winning stocks, and their market caps are smaller? I'll share with you at least one of those stocks this week.

Am I talking about market cap a lot? Well, get ready for even more, because this week, we're playing our quarterly game show, The Market Cap Game Show, and we're playing it with you. Along with my friend Emily, you are the contestant this week on Rule Breaker Investing.

__

Welcome back to Rule Breaker Investing!

For a lot of little kids, especially in the Western world, probably Christmas would be one of their favorite days of the year. For me -- still a little kid in a lot of ways -- four of my other favorite days of the year are the days we get to play The Market Cap Game Show on this podcast. Emily Flippen, welcome!

Emily Flippen: Thank you for having me! I would like to say that The Market Cap Game Show is up to the same level it is for you. I guess we'll see how I do today, and maybe I'll reevaluate.

Gardner: [laughs] So, for our regular listeners, I think you know what we do here. I even hope that you, as I, look forward to us playing the game every three months. But for our new listeners, I think it behooves us to explain a little bit about why we play the game, how we play the game. Then we're going to play the game. So let's not spend too much time with this, Emily, but why do you think we've made a game out of market caps?

Flippen: Market cap can tell you a lot about a company. I talked about this when we had our member event back in Austin. People asked me, how do you value a growth company? For me, it was always, look at the market, then look at the size of the market cap of the company and think, is that bigger or smaller than the market you think they can have? It tells you a lot more about the growth of that company and the size of that company than simply looking at something like a share price, like many people do.

Gardner: Absolutely. To define our term, for anybody new to investing, the market capitalization of a company is just basically the price tag that the world puts on that company. In Walmart, you walk down the aisle, you see the prices on everything. Well, if you could do the same with stocks, you just walk down the aisle and look at the market cap for every one of them.

I'll give a quick example. In fact, in my lead-in, I mentioned this. Lyft is planned to go public in April of this year. And then, lo and behold, Uber also announced it wants to go public in April of this year. Now, the market capitalizations expected for these companies are probably lost on most people who are hearing the stories about Lyft saying they might come public at $65 a share. But parsing the math and putting it into market cap terms, Lyft is expected to come public somewhere around the value of $22 billion. That's expected to be the market cap of Lyft. Now, I wouldn't be surprised if it goes higher than that, because IPOs are often -- as you know, Emily -- priced to what? On the first day, go...

Flippen: Higher.

Gardner: Higher. You want to have that IPO looking really good. Rarely will you see an IPO nosedive out of the gates. If they do, they probably mispriced. So, probably, we should all expect Lyft to be worth a little bit more than that.

Uber, by contrast, expected to go public with a market cap -- they're hoping, anyway, above $100 billion.

Flippen: I didn't know that!

Gardner: Some people have said $120 billion. In other words -- right now, we're already playing the game, because we're saying right now that the world is going to expect to price these companies, Uber about six times the value of Lyft. Now, for a lot of people, it's just two apps on their phone. There's Uber and there's Lyft. You might use one, might use the other. They feel interchangeable. But one company got started earlier and is much larger than the other.

Before we go on and start our game, I do want to say, when a company comes public with market cap of over $100 billion, Emily, what do you think about that? Is that a stock that interests you or excites you to buy? Do you think Lyft would go up five times in value over the next five years?

Flippen: You know, I don't think it's impossible, but my gut says no. And when I see something come out with a market value that high, it makes me maybe a little bit skeptical as an investor, A because I wonder what premium they're attaching to that valuation, and if they're selling at a peak of what could be a hype cycle; and B because I really like growth companies. If you're coming out at a market value of $100 billion, what does that mean for your opportunity to grow as an investment? For me as an investor to make more money on that? So it doesn't particularly excite me, but it is incredibly interesting.

Gardner: That's right. So this is the Rule Breaker Investing podcast, even though we're wearing our Market Cap Game Show clothes this particular week. But the reason I wanted to talk briefly about Uber and Lyft is, I agree with you, Emily. When I look at a company come out with a valuation of over $100 billion, I sit there and go, I'm sure everyone's going to be talking about the Uber IPO and Lyft IPO in April. And yet, I'm probably not going to even look at the stock. I'm not that interested in companies that come out with new pricing over $100 billion. For Uber to go up five times in value -- which is a good goal for us as investors -- it's going to have to go from, let's say $120 billion to $600 billion. It's going to have to add $480 billion of value to become a five-bagger. So we tend to set our sights on smaller companies, where we think, yeah, I could see that five times from that company.

To close, then, this brief rant and digression from our game, my own experience is that the IPOs that get the most talk, the most hype, the headlines, and the discussion, even water cooler discussion around your offices -- even people who aren't investors are going to be talking about Uber going public -- ironically, those are often the ones with the biggest market caps and the least likelihood of truly appreciating as great stocks. You're probably not going to see us pick Uber in the Rule Breakers service here in 2019. Maybe we will. Never going to put that past us. Emily, you and I work together on Motley Fool Rule Breakers. But there was a brief thought about big-time IPOs and market caps.

All right, Emily, I'm warming my 10 stocks up. I got 10 for you. We're going to do it alphabetically by company name this time. Rick is getting ready to rock our game show music. Here's a quick listen into it!

[♪ jaunty tune ♪]

[record scratch]

We're going to pull it back for a sec because we want to do a quick example. We're going to use, as our example this particular show, Etsy. Now, for longtime listeners, they know that Etsy is almost its own side separate joke thread because many of the past games -- this is the sixth time we played -- I've used Etsy within the game itself, mainly because Matt Argersinger, your forbear, kept getting it wrong and it was hilarious to us all. Let's use Etsy as our example this week.

To use Etsy as our example, Etsy's share price as we tape -- we tape Tuesday afternoon, the day before the show comes out -- is $69.24. I see that its market cap is $8.275 billion. Emily, I know that you already knew that, right?

Flippen: I might have prepared Etsy a little bit before coming in, just to cover my bases.

Gardner: [laughs] Which is why I didn't want to make it one of the 10 this time. We're using it as our example. It has a market cap of $8.275 billion. If you do the math, you'll see that Etsy has about 120 million shares outstanding. Again, you take those shares, you multiply by the share price of $69.24, there's your market cap. That's our example.

In our game, since you can be 20% on either side of it, with Etsy at about $8 billion, we're going to say, $1.6 billion on either side. So, anywhere from $6.4 billion up to $9.6 billion, that would be the range of acceptance of scoreability in this game. You would score one for one if you got Etsy anywhere from $6.4 to $9.6.

So, there's our example. Now, let's sweep the stage away, rock that music, and get started playing The Market Cap Game Show.

[♪ jaunty tune ♪]

Company No. 1 this week has been on a real roll. This is a company I first picked in January of 2007. The stock was at $60.60, a little bit of magic there. And indeed, now, years later, it's way up from that. But on its way way up, it also had to swoop way down for a while.

Emily, do you like burritos?

Flippen: I love burritos!

Gardner: You love burritos. Do you love Chipotle burritos?

Flippen: I am one of the remaining people who will still hit up Chipotle. I could probably eat it for lunch five days a week and still not have enough Chipotle.

Gardner: [laughs] I will say, when Chipotle went through some really tough times a few years ago, all of a sudden, stores that had lines out the door -- and yet, still the line moved quickly -- those stores had no lines, at least the one I go to here in Tenleytown in Washington, D.C. All of the sudden, it seemed vacant. Shocking to me.

And yet, in the same way that you probably had lines out the door, then nobody around, but now I think people are coming back -- the stock price is well back where it was. In fact, I'm going to ask you in a bit, after I ask you the key question, how low you think the stock got.

But without further ado, Emily Flippen, stock No. 1 this week: what is the market cap, within 20% either way, of Chipotle Mexican Grill?

Flippen: This is tragic because, for somebody who is such a connoisseur of Chipotle, I am not positive. I'm going to guess $16 billion.

[ding]

Flippen: Yay! [laughs]

Gardner: Nailed it! All right, the market cap as we tape is $18.4 billion. For our many players at home, if you said anywhere from $14.7 billion to $22.1 billion -- and yes, I do take it out to one decimal point, we do care about numbers on this show, and truth, we're not fudging things -- give yourself a check mark. One for one to start the game, Chipotle Mexican Grill.

The stock went from that January 2007 recommendation price of $60 up to $750 by 2015. On a serious roll. Then the food and health problems at a few restaurants, not all of them, but got a lot of publicity, and the stock went -- take a quick guess, Emily. Do you remember how low it went early last year?

Flippen: Well, I know that it did not stop me from eating at a Chipotle. [laughs] It probably should have, but it didn't. I actually don't know.

Gardner: It dropped as low as $250. It went from $750 to $250 from 2015 to 2018. Today, it's back up over $660. What a tremendous stock Chipotle's been just in the last year, under $300 to over $600. A big-time winner. I think the company's back. We'll see. We've just been holding it all the way through in Motley Fool Rule Breakers, and we're very delighted that we have.

Flippen: I'm waiting for Chipotle to do breakfast.

Gardner: I'm waiting for them to expand more internationally. The company is in Canada, the U.K., France. You can even find a Chipotle or two in Germany. But those are the only countries in the world that Chipotle has gotten to so far.

Flippen: You can almost pat them on the back, though, because their international expansion has lagged simply because they haven't been able to ethically source their food like they would want to. So in a way, I almost commend the company for their slow expansion.

Gardner: All right, so, Emily's one for one. You playing at home, I hope you're one for one. If you're zero for one, chin up. There's nine more coming.

Emily, last time we played this, you set an all-time record on The Market Cap Game Show. No one had ever gotten seven out of 10.

Flippen: See, I was hoping you wouldn't mention that. [laughs]

Gardner: But you did!

Flippen: See, now the expectation's high.

Gardner: Matt Argersinger came on here. He played the first five episodes. This is episode seven. He got six, then six, then six, then four. He started feeling bad about himself. But came back with six. Really great. I think most of our players at home probably don't get 6 out of 10. Emily, you scored seven, no one had ever done that, in your debut appearance here on the show.

Flippen: I will say, I did feel like some of them were softballs. Etsy was expected at that point. [laughs]

Gardner: Etsy arguably was, because I asked it every show. I do agree, that might have been. That's humble of you. You're outstanding. I don't want to put too much pressure on you. I don't want you to put too much pressure on yourself.

Flippen: Well, if I do poorly, I'll just point everybody to the last episode, right? "How did The Market Cap Game Show go?" "Oh, yeah, you can listen to it over there!" Previous quarters.

Gardner: [laughs] All right, Company No. 2. Company No. 2 is Electronic Arts. Electronic Arts is a company that we selected in Rule Breakers in 2016. It has been a little bit of an underperformer. It's up 33% since our June 2016 fingering of this stock at $75 a share. It's gone up to $98. The problem is, the stock market's done better. The stock market is actually up about 43% while EA has been up 33%. Actually, things looked so much better about six months ago. The video game industry has really sold off quite dramatically, not just EA -- as you know, Emily -- but Activision Blizzard, some of our other favorites. These stocks are a little bit down and out.

You and I were working together on Motley Fool Blast Off 2019, another service The Motley Fool introduced in the last few months, and we looked over and we thought about, what are some of the companies that we admire in this space? This is certainly one of them. Take-Two Interactive, though, is the stock that we ended up adding to that list recently because, in part, we feel like people are hating too much on this industry. It's like you're either playing Fortnite, or apparently you're not playing video games anymore. That's sometimes the way the media coverage feels.

Flippen: Unfortunately, I've spent so much of my time looking at Take-Two that when it comes to thinking about EA, I'm looking at it with the perspective of how large Take-Two is. And I know that EA -- I say I know, although these stocks have been beaten down, so I may as well not know -- but I suspect that EA is larger than Take-Two.

Gardner: It is larger. I think in your heart of hearts, you already knew that. But if that's helpful for any of our players at home, yes, you should know that EA is larger than Take-Two Interactive.

Flippen: That's good. For it to be smaller, it would have to have been really hit down. If I didn't notice that, there's another problem there.

Gardner: Take-Two Interactive is worth about $11 billion today. There's a little bit of a stake in the ground. You know it's more than that. Electronic Arts has been around longer, it has far more games. Emily Flippen, stock No. 2, what is the market cap within 20% either way of Electronic Arts?

Flippen: I don't think it's three times the size of Take-Two, but I do think it's probably at least twice the size of Take-Two, so I'm going to say $29 billion.

[no sound]

Oh, no!

Gardner: We need a new sound effect on the show, Rick. When somebody nails it exactly on, that deserves...this sound!

[dingdingdingding]

Emily, it is exactly $29 billion.

Flippen: That was a very lucky guess! I wish I could take credit for that! [laughs]

Gardner: Players at home, Fools, Rule Breakers all, if you said anywhere from $23 billion up to $35 billion, then you get it right along with Emily. But Emily got that special sound again --

[dingdingdingding]

-- because, wow! Now, I have to believe, Emily, that you do spend some time, knowing you're going to be coming on the Game Show, studying some of these numbers, maybe memorizing some of the market caps.

Flippen: My strategy last time I was on the show was, there's too many stocks to even try to begin memorizing them all.

Gardner: There's over 230 that you're having to think about here. We're always pulling from our active recommendations in my Supernova services. We have 230 of them. Probably, you're not memorizing 230 companies. Plus, they change every day.

Flippen: It's impossible. Unfortunately, I'm putting everything in the context of when the last time I was on here was. The market has changed a lot since then. But sometimes putting stocks into large-cap/mid-cap/small-cap is helpful. So, Take-Two, although I think at $11 billion, that's not a small-cap. In my mind, it was a small-cap. In my mind, EA was a mid-cap. So I knew it had to be somewhat larger, some magnitude larger. And then there's also that level of lucky guessing.

Gardner: Yeah, and then there's guessing it exactly on.

OK, let's get to stock No. 3. Emily, let me ask you a question about your movie-going habits. How many Transformer movies do you think you've seen over the years?

Flippen: Zero.

Gardner: Zero, hmm.

Flippen: So this is not going to be good for me.

Gardner: At one point, they had like the original Transformers movie. Then I think they numbered them, Transformers 2 and 3. I can't exactly remember. I've seen a fair number of these. At a certain point, they stopped numbering them altogether, then they started diversifying. And then some of them actually got good. Bumblebee got pretty good reviews last summer when it came out. One of those Hasbro Transformer movies. So, stock No. 3 is Hasbro.

Now, I think most of us who grew up with Hasbro -- and that's most us of any age, because this company's been around for decades -- associate Hasbro with toys. It's a toy company. But in recent years, it's taken to the silver screen, putting a lot of its properties, sometimes very mediocre movies -- did they ever make a Monopoly movie? They were working on one. Anyway, they took some of their board games and turned them into movies. Clue, I know that was a movie. These aren't necessarily great movies. The Transformer movies, I think you've seen zero of them?

Flippen: I have seen zero. I didn't even know Bumblebee was a Transformer movie. What is Bumblebee? Bumblebee?

Gardner: Yeah, all one word. Not to be confused with the other, Bee Movie. That was an animated movie.

Flippen: I know that movie.

Gardner: OK, there we go. Anyway, so the stock is Hasbro. This is a diversified company. Makes a lot of Star Wars toys. It has its own movie properties these days, as we've been talking about. Emily and everybody playing at home, what is the market cap of Hasbro?

Flippen: Now, this is a shot in the dark. Goes back to mid-cap/small-cap. It could be either. I'm not entirely sure. I know this is one of your more favorite picks. I feel like people probably think it's smaller than it is. I'm going to say $14 billion.

[buzz]

Gardner: Pretty close. Pretty close, but no cigar.

Flippen: No!

Gardner: I'm sorry, Emily!

Flippen: It's smaller, I'm assuming?

Gardner: I almost think it's unfair that I'm not giving this to you. When a company has a market cap of $11 billion, that's a fairly tight 20% either way. Those playing at home, if you guessed between $8.8 billion and $13.2 billion -- Emily, you guessed $14 billion. It feels wrong.

Flippen: Still a ways off.

Gardner: It feels wrong, not giving that to you. $800 million. What's another $800 million here or there? Score yourself one for one at home if you were anywhere from $8.8 billion to $13.2 billion.

You did say this is one of our favorite stocks. If favorite is measured by time held, then Hasbro stock -- which I first recommended in April of 2003, Motley Fool Stock Advisor started in March of 2002, so in the second year of our service, gee whiz, that's now about 16 years ago now, and we've held it all the way through. The good news is, anybody who was subscribing back then and has listened to our advice ever since, which is hold, is up 775%. Which sounds pretty awesome. That's eight times your money. That said, how do you think the market has done since April 2003?

Flippen: I'm sure it's done well.

Gardner: The market is up 375%. Just a reminder, even if you're buying an index fund -- that's what the S&P 500 is -- you're a really happy person if you just become an investor, save money, and invest right along with the market. You're up 352% by my math since April 2003 if you're just buying an S&P 500 index fund. But you've more than doubled that if you listened to us and bought Hasbro.

All right, Company No. 4. Emily, you're two for three. That's an awfully good batting average not just in Major League Baseball, where it's the greatest batting average of all time, but in this game.

Flippen: Can we stop now?

Gardner: We could stop now, but it wouldn't be nearly as fun a podcast, I don't think, if we did. So let's keep moving.

Now we're going to go to the letter J as we go from A to Z through the alphabet. This time, there will be a Z, by the way.

Flippen: Ooh!

Gardner: As we approach the letter J, Emily, what was the last time you were on an airline?

Flippen: I took that trip to Austin for The Motley Fool for our Fool event there.

Gardner: How did that go? I was unable to be at that event. That was just ten days ago or so.

Flippen: It was wonderful! It was my first Fool event with the members. It was really nice to meet some people. Especially when you do podcasts like this, it's nice to put faces out there so you're not just talking to the void, right?

Gardner: Yeah. Were you presenting at our Motley Fool event?

Flippen: I did. I presented with another analyst, Ben, over investing in China and some things you should maybe know before investing in China, and some ideas that we like coming out of China now.

Gardner: Now, I know some of you have gotten to know Emily. Perhaps you heard her on her initial appearance on The Market Cap Game Show, which we taped December 12th of last year. You've probably gotten to know her if you're a subscriber to Stock Advisor or Rule Breakers or some of our podcasts. Emily, you've been on Market Foolery from time to time.

Flippen: Yes.

Gardner: You may or may not know her background. You may remember she has spent a substantial amount of time in China, her four college years, going to NYU, New York University, where?

Flippen: In Shanghai.

Gardner: Not in New York City.

Flippen: Not in New York City.

Gardner: Although not an un-New-York-City-like experience. Shanghai is an amazing city.

Flippen: Exactly.

Gardner: There may be a Chinese company or two in our future on the show. But let's go now to company No. 4. We're talking about airlines. Do you remember what you flew to get to Austin, Texas?

Flippen: I flew Southwest, actually.

Gardner: What was your experience?

Flippen: It was my first time flying Southwest. I didn't realize it was my first time flying Southwest until I tried to board the airplane and I didn't have a seat. Then it occurred to me that this was a new type of airline. [laughs] But it was a smooth process. I very much enjoyed it.

Gardner: Now, that new type of airline has been in existence for 30-plus years now. But for anybody flying Southwest for the first time, it is a different thing.

There's another company that, for me, anyway, has a differentiated experience. That's JetBlue. I always take pleasure whenever I'm on a JetBlue flight, and it's because they have live DirecTV, I think. They've done that for years. Do they still have the blue nacho chips that they give you, going with that blue theme? Maybe, maybe not. I need to fly JetBlue again. I haven't done so in a year or so.

I kind of wish at this point I hadn't picked the stock two years ago, because my November '16 selection of JetBlue is down 20%. The market over that same time is up 36%. It's been a real laggard for Stock Advisor members. My apologies, JetBlue investor fans.

Emily, let's keep it short and sweet. What's the market cap of JetBlue?

Flippen: I have never flown JetBlue, which makes me think that, if I'm not a user, nobody's a user, right? I'm sure that's not the case.

Gardner: Sample size of one, of course.

Flippen: But it makes me think it must be small. So, another shot in the dark, I'm gonna say $1.5 billion.

[buzz]

Gardner: JetBlue is a smaller airline, but it is not that small. In fact, there's even an argument that you might not want to fly a company that has your life in its hands 30,000 feet up if it only has a market cap of $1.5 billion. I mean, I think that there are some wonderful smaller companies that probably do amazing Learjet experiences, but for bigger commercial airlines, I'm going to say that's a little low.

Flippen: So is this a big miss?

Gardner: Not a big miss. The market cap of JetBlue is $5.1 billion. In fact, if you just transpose those digits -- $1.5 billion, make it $5.1 billion -- you would have nailed it right on. Players at home, if you were anywhere from $4 billion to $6.2 billion, you got it right for the market cap of JetBlue, which, as I said, has been a laggard. In fact, that $5.1 is 20% lower than when I picked it in November 2016.

One thing about airlines, Emily, it's hard to differentiate yourself from the other players. These days, it's an oligopoly. You've got American, Delta, and United. At least that's the way it feels here in the U.S. They are the big-time players. It's hard to even get gates if you're not one of those players.

Flippen: Oh, completely. Recently, I took a trip, actually, out to Europe. I flew a couple of interesting smaller airlines when I was out there that maybe had a market cap closer to $1.5 billion?

Gardner: [laughs] And you lived to tell the tale!

Flippen: [laughs] Exactly!

Gardner: All right, Emily. Two for four. I think you put too much pressure on yourself. Probably expectations are too high. I'll say this: we've always said that 4 out of 10 -- this is not to you or to Matt, this is really to all my players at home -- 4 out of 10 is a good benchmark to shoot for. No one's ever done worse than four out of 10 out of the professionals who've come into the studio -- no pressure at all, Emily! But I think that's a good, reasonable number. I'm in the Alex Trebek position of only having to ask the questions. That's a delightful place to be.

By the way, our very best wishes and hopes for Alex Trebek and his health, as recently announced. I'm certainly a huge fan of Alex Trebek and Jeopardy. The Motley Fool has twice been an answer on Jeopardy. That first time it ever happened, that was like magic. We and our employees couldn't believe it, that our company was all of a sudden, an answer on Jeopardy! Anyway, we love game shows. We love Alex Trebek. I love being in Alex Trebek's position of not having to be scored. I'm not sure how I'd do. Anyway, let's keep moving.

All right, Company No. 5. Well, Emily, I think you started work here at The Motley Fool officially, full time, somewhere around June of last year. Am I right about that?

Flippen: April, actually. I'm coming up on my one-year anniversary here.

Gardner: OK, good. Would you say I was within 20% either way of the month --

Flippen: [laughs] I would say that.

Gardner: So, I was right! No, no. Wonderful, April! I'm delighted. You're one month away from your first Fooliversary.

Flippen: I am!

Gardner: Spectacular! You're one of our younger employees. You are less than half my age, which is awesome. I mean, as an entrepreneur, I love to think that we've been around for 26 years now, and one day, I won't be around anymore, and I sure hope our company is still being driven by people like Emily and all those that we're hiring these days. It's a delight, always, to hang out with people from different generations. That's a little bit of the dynamic of The Market Cap Game Show. I get to hear from somebody younger than I am with new and better perspectives, often.

Have you yet owned a car?

Flippen: I do own a car, actually.

Gardner: I think you and I talked about this a little bit last time. I remember TrueCar was one of the stocks I asked you.

Flippen: And I missed it, I remember. It left quite the dark spot on my last experience.

Gardner: I won't be reintroducing TrueCar. But we're going to go with a larger company. Have you ever done any business with CarMax?

Flippen: I have never done any business with CarMax, but I did spend some time looking at a Chinese company that had a business model that's somewhat similar to CarMax's. When I talked about it here, everybody kept mentioning, "Oh, CarMax of China. CarMax of China."

Gardner: That makes me think you might get this next one. We'll see. Sounds like you've done some research in this area. Let's go back briefly. The car that you're driving, did you personally buy that car yourself?

Flippen: I did not, it was actually a present from my parents when I graduated college.

Gardner: That is awesome! Did they buy it in Texas, your home state?

Flippen: They did.

Gardner: OK. So you drove that car, or they did, all the way here?

Flippen: Actually, I went to work in Connecticut, and my previous employer paid to have it shipped up, so I took them up on that offer. Very lucky!

Gardner: We're a little cheaper at The Motley Fool. [laughs] Well played, Emily.

Flippen: [laughs] It wasn't a bad drive from Connecticut to Virginia!

Gardner: OK, fair enough. Well, without beating around the bush anymore, Emily, what is the market cap of CarMax?

Flippen: My small-cap Chinese used-car dealer doesn't nearly have the same market cap of CarMax, I would imagine. They're at about $1 billion. I know CarMax is significantly higher. I think CarMax is probably closer to -- and I'm not positive -- $12 billion?

[ding]

Gardner: If that ding had an almost slightly dissonant sound right toward the end, it would suggest that you were on the very edge of getting that right, but you did get it right. Well done, Emily! The answer is $10 billion. Simple math here, 20% lower is $8 billion, 20% higher is $12 billion. Players at home, if you got anywhere from $8 billion to $12 billion -- right on the edge of right -- you are right. Emily, good job! Three out of five to start the first half of The Market Cap Game Show.

Flippen: I'll take it!

Gardner: Before we continue into the second half of The Market Cap Game Show, thinking about LinkedIn, thinking about HR, reminds me that my friend Anessa Fike‏ is visiting and listening in with a few of her friends this week on The Market Cap Game Show. Now, it's not every show that this game show has an actual studio audience. Anessa and Trisha and Anthony, thank you very much for joining with us and listening in and playing along with so many others listening in this time. Anessa, keep up the good work in Raleigh, North Carolina, where you started your own company after leaving The Motley Fool! You're helping companies do culture better! If you're in or around Raleigh, North Carolina -- and I'm sure many other places besides -- and you think, "We should do culture better at this company," check out Fike + Co on the internet.

All right, Company No. 6. I have to say, this is probably one of my personal favorite stock picks of the last few years. I picked this in April of 2016 for the first time. I've rerecommended it at least once since. The company is Match Group, ticker MTCH. Match Group started with match.com. That's where the name comes from. More people know it by Tinder today because Tinder is a bigger business than match.com. Arguably, Match Group should change its name to Tinder because like some other companies, one of their products has taken on a bigger significance than the original name or founding name of the company.

Anyway, Emily, before I ask you about the market cap of Match Group, giving you a little bit of time to think about it, is this a company that's relevant to you in your life today as a younger woman here in the Washington, D.C., area?

Flippen: Well, I think I'm in the minority here, but I've been with my boyfriend since high school. So, unfortunately -- or fortunately, depending on how you look at it -- have not used any of Match's products. But practically all of my friends are on Tinder or use one of their other many products. It's definitely relevant. I see it all the time when I'm out.

Gardner: This is pretty awesome, because here you are -- I'm 52, you're in your early 20s -- and neither of us has really used a product from the Match Group company, it sounds like. I married my college sweetheart. Congratulations on dating your high school sweetheart! I think that's pretty awesome! There's the whole swipe right/swipe left thing going on with Tinder. They show you a picture -- I'm literally describing an experience I've never had. This really dates me. I'm happy to be dated. That's fine. And not that kind of dated. Anyway, you swipe right if you think that person's attractive or you'd like to meet them?

Flippen: Yes.

Gardner: And you swipe left if it's a no-go.

Flippen: Exactly. See, you could do it!

Gardner: I'm not going to! But if you did, is the promise that that person is proximate to you? Are they in the same bar? Are they GPS coding you? Or is it anywhere on the internet?

Flippen: I probably shouldn't know this. [laughs] I think you set a parameter around you. Like, "I want someone within 15 miles or 25 miles."

Gardner: Or feet.

Flippen: Exactly. "I want someone in this bar." I'm actually not sure if you can do that. You shouldn't be able to. If they haven't done that, they should get on it.

Gardner: OK, I love it! So, here we are, just talking about. Other people are laughing because they're like, "Yeah, I've used this for years. These nitwits don't know this?" Although Emily does mostly know how it works, which is awesome. But here we are, both kind of happily in our own. But a lot of other people in this world are looking for someone. Sometimes, over the course of a life, lots of different people, And this is a business that globally is really the leader in helping people find someone. It's almost in any country and of any persuasion. It's very broad. This is a company that owns dozens of websites with different interests, all featured, Match Group.

Emily, what is the market cap of Match Group?

Flippen: I feel pretty confident about this one. I will say that I think this company should be much larger. I think Match Group is about $15 billion.

[ding]

Gardner: Bingo! In fact, Match Group as we speak, taping Tuesday, March 19th, is $16 billion. $15 billion is definitely within that range. For those playing at home, if you were anywhere from $12.8 billion to $19.2 billion, give yourself along with Emily a check mark. Emily, if my math is right, are you four out of six now?

Flippen: I think that's correct.

Gardner: Congratulations! That is pretty awesome! You've already made the benchmark, the minimal benchmark we'd expect from a paid professional.

Emily, you just said that you think the market cap could or should be much higher. You and I share general bullishness about this company.

Flippen: Aaron and I actually just got out of a meeting --

Gardner: Aaron Bush, our fellow analyst.

Flippen: Aaron Bush, yes. We were talking about in the context of the Odyssey portfolio, and why Match Group maybe never made it into the Odyssey portfolio. There are a lot of members that said they didn't see the growth opportunities for Match. That's shocking to me and it was shocking to Aaron as we were having this conversation. All we see are growth opportunities for Match. It has such a small market cap in terms of how large the online dating market can be and is.

Gardner: You just think about the size of something like Facebook. In a lot of ways, even more than Match Group, a lot of this social connectivity. Those companies are worth hundreds of billions of dollars. This is the worldwide leader in hookups of all kinds, and we're talking about $16 billion right now? Yeah, we liked this stock a lot a few years ago at one-quarter of the price, and we like it a lot today going forward. Same reason.

Emily, you were referring there to the Odyssey portfolio. That's from our Motley Fool Supernova service. For members of Supernova, you'd recognize that one of our real-money portfolios that members are encouraged to match, if you just want to follow along with what we do, is the Odyssey portfolio. Aaron has provided some great leadership and focus for that market-beating portfolio. Odyssey 1, Odyssey 2. We have a bunch of things going on under the hood at Motley Fool Supernova.

All right, Company No. 7. Let's stay in the same general area. Let's stick with social connectivity companies. Let's take the existing business model of Match Group and transplant it from the United States, where it's primarily domiciled and initially focused, and let's go to China. Let's take the same approach of having people through apps meet each other, and let's go to the largest country by population in the world, although I think India is going to eclipse China in the coming couple of decades. The company is Momo.

MOMO is not only a funny ticker symbol, because people talk about momentum stocks and sometimes they use the phrase "momo," but Momo in Chinese terms is a popular app for meeting other people, building your relationships with them, building your social street cred with people in China. In a lot of ways, this is like the Chinese Match Group. Probably not fair. But for a lot of people, you might wonder, "Would that be larger today or smaller than Match Group?" We're about to find out what you -- because I know you're guessing at home -- and Emily think about the market cap, Company No. 7, of Momo.

Flippen: Whenever someone asks me about Momo, I go back to my time living in Shanghai. My favorite thing to do on Sunday mornings was to get up early, grab a cup of coffee, and walk out to People's Square, where grandmas and grandfathers would sit with little placards of their grandkids trying to hook them up with other people's grandkids from the same province, maybe, who were living in Shanghai.

Gardner: Wow, really?

Flippen: Yeah! It's really more of a social event for the grandparents than anything. No kids were out there trying to get married because they were all on Momo or one of Momo's products. Unfortunately -- and this goes back to Match being probably too small -- I know Momo is smaller than Match. I also suspect that it was somewhat beaten down, along with a lot of our other Chinese holdings. It did have a rally.

Gardner: I will mention that I first picked the stock in May of 2017, so we're coming up on the two-year anniversary. It's flat! It's moved around, but it's just back to where it started. It's been a laggard. The stock market over that time up 22%. This has been one of our picks that -- well, in its first two years, anyway -- hasn't worked out that well so far.

Flippen: When you put it in that context, it makes me want to change my guess here.

Gardner: I'm definitely never trying to lead my contest because I want everybody to play by the same fair rules, but everybody else just heard me say the same thing. So yeah, if I've changed your guess a little bit with that reflection on the underperformance of this disappointing-so-far Rule Breaker pick from May 2017, sure, I'm here to help.

Flippen: Well, my original guess was going to be $10 billion. That was because I know that it had a recent rally. With that in mind, I'm going to push it down a little bit. I'm going to say -- and maybe this is wrong -- I'm going to say $8 billion.

Gardner: Play that sound again, when somebody nails it exactly on!

[dingdingdingding]

Gardner: Emily, well done! Yes!

Flippen: If I'd guessed $10 billion, would I have been out of that range?

Gardner: You would have! If you'd guessed from $6.4 billion, which is 20% less than $8 billion, to $9.6 billion, which is 20% more than $8 billion, give yourself a golden star along with Emily Flippen, who just nailed her fifth out of seven market caps! Emily, it's like you've been to China before.

Flippen: I feel almost like I cheated on that question, though. My gut told me $10 billion.

Gardner: All right, Company No. 8. Down the stretch they come with three more! Company No. 8, Emily, TripAdvisor. TripAdvisor has been a company for Motley Fool Rule Breakers, that best of times/worst of times kind of a stock. It was a monster winner when we first picked it in 2012, but it's fallen off a lot. These days, it's only up 14% from that initial pick, and the market's up about 150%. TripAdvisor started to try to compete with Priceline, Booking Holdings now, by allowing you to book your travel through a portal that they'd created. That didn't work out so well for them. They lost some of their focus and some of their business momentum. The stock has sold off quite a bit. The ticker symbol is one of those easy ones to remember because TripAdvisor got TRIP.

Emily, what is the market cap of TripAdvisor?

Flippen: Well, it's no Trivago, but it's also no Bookings. So I know it's somewhere between a couple of million, [laughs] and like $80 billion.

Gardner: Right. And in citing those companies, you and I smile because you and I both know those are active picks of ours. Trivago would be the example of almost the worst stock pick that we've made in the last few years. Booking, formerly Priceline, is one of our very best stocks. So, you're right. It is somewhere between Trivago and Booking.

Flippen: To be inaccurately and falsely precise with this guess, I'm going to say $8.55 billion.

[buzz]

Oh, no!

Gardner: It's so close!

Flippen: Should I not have been so inaccurately precise?

Gardner: I like to think that that didn't affect you, but you were awfully close. It wasn't adding that extra decimal that troubled you. The correct answer for TripAdvisor is $7 billion. As we speak today, Tuesday afternoon, at a low, players at home, if you said $5.6 billion; at a high if you said $8.4 billion. Even the times that you've missed, Emily, you just barely missed.

Flippen: I would have still guessed $8.5 billion.

Gardner: That's why I said, I don't think you were bedeviled by that extra .05 billion that you added. But you have an awfully good sense of it. You're very close. TripAdvisor, much, much smaller than a company like Booking today. Interesting to think about. Here's another company that has the same market cap, $7 billion, today: Planet Fitness. Totally different business. But part of the reason I love market caps, The Market Cap Game Show, is it just makes you facile. You start to understand, "Oh, yeah, that's worth the same as that," even though they're not just apples and oranges -- which, by the way, are both fruits. Whenever anybody says, "it's like apples and oranges," I'm like, you mean they're both fruits? I know they're trying to say they're two totally different things. But it's more like apples and tubas or something, right? So, that's one of the cool things. In the business world, there are companies that look nothing like each other, and yet sometimes they have the exact same price, and only market cap lets you know that.

Emily, of these two companies that we're putting in play here, which are you more likely to use the services of, or have used the services of, in the last year or so or the next year or so? TripAdvisor or Planet Fitness?

Flippen: Actually, I'm likely to use both. I would probably have to say TripAdvisor simply because The Motley Fool has a gym here, so I don't need a Planet Fitness membership. But if I did need a membership to a gym, I would definitely choose Planet Fitness.

Gardner: I would too, probably. You know what's cool about both these companies, which have the same market cap, $7 billion, they're both consumer facing. These are examples of companies that a lot of us recognize. You might have read somebody's review of your next trip on TripAdvisor. You might well have made a new year's resolution and started a Planet Fitness membership. It's March, maybe you're even still going!

Some of our favorite stocks here at The Fool are companies with known brands. I like to find those companies. We tend to hold those stocks for long periods of time. It takes a lot for a company to get its name in our face and to be remembered today. The ones that are, that's usually a pretty good sign.

All right, Company No. 9. Emily, by my count, you are five of eight. Really, a couple of those misses, it felt almost wrong not giving that to you. But we have to play by the rules. Let's go to Company No. 9.

Company No. 9 is one of those companies where it's another consumer brand we all recognize, and yet, if most of us heard the corporate name of that company, we'd be like, who are they? What do they do? The ticker symbol is UHAL. I think most of us could parse that. It sounds like U-Haul, doesn't it? Yeah, it does. The actual company name is Amerco. One of those, I wouldn't recognize the corporate name, but yes, I know their biggest brand. Kind of like Tinder. Why don't they just rename themselves U-Haul? But they haven't. I wonder, had they done so, would this have been a better stock pick of mine?

We first picked Amerco July of 2015. I tabbed it, it is up now 16.5% from there. The market, unfortunately, up 44%. This has been a laggard. But the reason I picked the stock -- and I still like it today, and I would recommend anybody buy this stock again today -- is it's one of those timeless businesses. As much technological change as there is, I still think the need for U-Haul is going to be around for the rest of my lifetime. Emily, maybe even for the rest of yours. We'll see. By the way, if it stands the test of time, I predict this stock does better than it's done so far. It's still up. I'm not complaining. But it's not even with the market since July of 2015!

U-Haul. Sound like a big business? We're about to find out. Players at home, get your number ready. All right. Emily Flippen, what is the market cap of Amerco?

Flippen: It sounds like a big business. Doesn't it? It sounds like a big business. I just moved, actually, and I rented a U-Haul.

Gardner: Did you really?

Flippen: I did! I download the app. I picked it up at 5:00 a.m. with nobody there. Just use the app, got the keys, got in the car, dropped it off late at night. Nobody there! Didn't have to communicate with anybody!

Gardner: Is that good or bad?

Flippen: I was very impressed! It had so much flexibility with when I could move. So, having no clue, [laughs] I'm going to say this is a $30 billion company.

[buzz]

Ohhh!

Gardner: I always hope that we have one really bad miss each show. We have to have one. Emily is so good at this game that it can be unfun. But she makes it fun when she misses by that much.

Flippen: By grossly missing!

Gardner: Arguably, maybe I talked up U-Haul a little bit too much. It's a timeless business --

Flippen: There are U-Hauls everywhere!

Gardner: There are, and yet the company Amerco is worth about the same as TripAdvisor. It's $7.4 billion today. Therefore, players at home, if you were anywhere from $5.9 billion to $8.9 billion, you got the correct answer. Emily, at $30 billion, you seemingly overrated the importance and value of U-Haul in this world.

Flippen: Maybe my experience was just too good. I thought everybody must be getting U-Hauls. Nope. Just me.

Gardner: Anytime anybody misses by a lot, it's usually instructive. I bet you're not the only one who missed that one by a lot. But maybe what you're saying is, you think it's worth more than what it is worth today. This is kind of a laggard stock. A lot of people don't even recognize the name Amerco. If you and I think that U-Haul is probably worth tens of billions of dollars, and it's only at $7.4 billion, maybe that implies we should research the stock further and consider adding it to our portfolio.

Flippen: When you put it in those terms, now I'm thinking, there's so much competition for vans out there that maybe I was attaching quite the premium to the name U-Haul.

Gardner: All right, as we move now to No. 10, let me remind you that you've been playing at home, Emily is five of nine so far. How are you doing? You know what? We want to hear it so, on Twitter, which is where we tend to focus our social media with this podcast, we're @RBIPodcast on Twitter. Feel free to tweet it out. #IBeatEmily, #ILostToEmily, and, this is going to happen, too, #ITiedEmily. We always enjoy looking for those hashtags. If you have any comment about our game, maybe we'll call you out at the end of this month in our mailbag -- which, by the way, I hasten to add, is next week. Before we go to Company No. 10, a reminder that next week, of course, the last Wednesday of every month, is our Rule Breaker Investing mailbag. If you've got a question, thoughts, suggestion, comment, inspirational story, or poem, RBI@fool.com is the email address. You can also just tweet us @RBIPodcast. I look forward, as I always do, to your questions, thoughts, suggestions, inspirational stories, and poems next week.

OK, Emily, Company No. 10. I said we were going all the way down to Z. Off the air, you said that, off the top of your head, knowing as you do pretty well our covered universe, around 230 companies, how many Z's do you think that we have?

Flippen: I can only think about two Z's off the top of my head.

Gardner: I'm not even sure myself because I'm not looking right now. It might be more than that. I can think of at least two myself. You were saying, one of those Z's, you feel like you know really well.

Flippen: One of the Z's, I do know, because I recently looked at this company. The other Z, I also recently looked at this company and should know the market cap, but have no clue. It's a real 50-50 toss-up at this point!

Gardner: I'm not even sure which ones you're thinking of. My guess is that between the two you're describing, I'm probably asking about the one that you don't know as well.

Flippen: The fact that you think that you're asking about the one that I don't know makes me think that you're actually asking the one I do know, because I think you think that I do not know the one that I do know.

Gardner: Is this The Princess Bride? I love that scene! That's just spectacular!

All right, I think it's time to show my cards here and end the meta-conversation. Emily, this is a company that started out with barcode scanners years ago. These days, it's a leader, all the automatic identification and data capture products. This company, Zebra Technologies, is one of the leaders worldwide, Zebra, ticker ZBRA, is a company that has really, truly evolved from the early days barcode scanning into things like wristband recognition, a lot of the medical recognition, probably face recognition for all I know. Zebra is an amazingly and worldwide diverse company today. An impressive leader within its field.

In fact, I'm seeing right now, it was founded in 1969. ZBRA, Zebra Technologies. This is a recent pick for Motley Fool Stock Advisor. Emily, I can't remember, did you do the research for Zebra Technologies for me?

Flippen: I did not, but I am exceedingly happy you asked about Zebra instead of about Zillow.

Gardner: Ah, see, I thought that you would have researched Zillow and didn't know Zebra.

Flippen: Yes!

Gardner: It sounds like it's the opposite. It sounds like you're about to get this one.

Flippen: It's embarrassing, because I know that actually, after we tape this podcast, we are going into a meeting where I'm going to talk about Zillow to you, and I do not know the market cap of Zillow.

Gardner: Well, you will have time between the end of this podcast and our meeting to look that up. And you know that I do care.

Flippen: [laughs] Exactly!

Gardner: So you know that I will ask about that.

All right, wonderful! Without extending things any further, Emily Flippen and players at home, what is the market cap of Zebra Technologies, ZBRA on the NASDAQ?

Flippen: I'll be embarrassed at this point if my memory fails me, but I'm pretty positive the market cap of Zebra Technologies is about $11 billion.

[ding]

Gardner: And you're pretty positively right. $11.5 billion. It's up a little bit this week vs. your expectations, which were awfully on target. Emily, well done! The answer is $11.5 billion. Therefore, players at home, if you got anywhere from $9.2 billion up to $13.8 billion, give yourself a big, fat, green check mark. Put a little star next to it if you were as close as Emily was, $11.5 billion to $11 billion.

This is a company that we recommended in Stock Advisor in November 2018, just a few months ago. The stock's up 19%, which is pretty good. The market up 5%. Off to a nice start. It's a company that's been around for a long time, but I think it's got a bright future ahead of it.

Flippen: That's actually why I spent some time looking at it. I saw it on the scorecard, and I thought, "Wow, that's not a company I'm familiar with!"

Gardner: Emily, without putting you on the spot, what are one or two research points or things that you noted when you did that research, that you could highlight to many people who are hearing about Zebra Technologies for the first time on this podcast?

Flippen: I think it's easy for consumers, when they look out into the world and they see products, to not think about the technology that goes behind them. Zebra Technologies is a great example of a company that does exactly that. You never think about the processes that make your life simpler every single day.

Gardner: Scanning things and instantly recognizing them.

Flippen: Exactly! So, to me, it was a reminder that there are a lot of great companies out there that maybe don't have the same glitz and glamour as our technology companies but do provide valuable resources and insight.

Gardner: And are good stocks to buy and to hold over the long term, which is at the heart of Rule Breaker Investing. Emily, thank you so much for joining me this week!

Flippen: Thank you for having me!

Gardner: You did a great job! Six out of 10 is the official final tally. If you got that, #ITiedEmily. Many probably will #ILostToEmily because you're awfully good at this game. If anybody beat you, I will consider them as a future guest on this show. Tweet us @RBIPodcast. Emily, I look forward to seeing you again, let's say in three months or so.

Flippen: Sounds great!

Gardner: Thank you for listening, for playing along, and for caring, for being willing to think like a geek, the geek that we all are here at The Motley Fool about market caps! And wordily joining us to figure out the numbers that underlie so much of our world, the real values of things and being increasingly knowledgeable about how to make comparisons and ask yourself, "Would I rather buy Match Group or pay about 10X that and own Uber?" Well, you probably can guess where I am on that. But it's your call.

In the meantime, have a great week! Talk to you next week, mailbag! Fool on!

__

As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Learn more about Rule Breaker Investing at rbi.fool.com.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. David Gardner owns shares of Activision Blizzard, Booking Holdings, Chipotle Mexican Grill, Facebook, Match Group, Zillow Group (A shares), and Zillow Group (C shares). Emily Flippen has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Activision Blizzard, Booking Holdings, CarMax, Chipotle Mexican Grill, Etsy, Facebook, Hasbro, Match Group, Southwest Airlines, Take-Two Interactive, TripAdvisor, Twitter, Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool owns shares of Delta Air Lines. The Motley Fool is short shares of Hasbro. The Motley Fool recommends Amerco, Electronic Arts, JetBlue Airways, Momo, Planet Fitness, Trivago, TrueCar, and Zebra Technologies. The Motley Fool has a disclosure policy.