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[192.64.236.253]) by mx.google.com with ESMTPS id n13-20020a05620a294d00b0069c4a3c4fe8si507399qkp.479.2022.04.21.04.24.22 for (version=TLS1_3 cipher=TLS_AES_256_GCM_SHA384 bits=256/256); Thu, 21 Apr 2022 04:24:22 -0700 (PDT) Received-SPF: pass (google.com: domain of delivery_20220421072122.27438777.812983@bouncest.seekingalpha.com designates 192.64.236.253 as permitted sender) client-ip=192.64.236.253; Authentication-Results: mx.google.com; dkim=pass header.i=@seekingalpha.com header.s=sailthru header.b=QEoSblKl; spf=pass (google.com: domain of delivery_20220421072122.27438777.812983@bouncest.seekingalpha.com designates 192.64.236.253 as permitted sender) smtp.mailfrom=delivery_20220421072122.27438777.812983@bouncest.seekingalpha.com; dmarc=pass (p=QUARANTINE sp=QUARANTINE dis=NONE) header.from=seekingalpha.com DKIM-Signature: v=1; a=rsa-sha256; c=relaxed; s=sailthru; d=seekingalpha.com; h=Date:From:Reply-To:To:Message-ID:Subject:MIME-Version:Content-Type: List-Unsubscribe; i=account@seekingalpha.com; bh=vtkdpoSJ1HbodzG2NfmOMWPkO0RLiI08iqa61CX+c/I=; b=QEoSblKlZFh7v7vLOFN02n4CaDZbp6m243gD46puiiSgQ3lDytmT9p8wqmkxSP9EbY/3a8WqFMUy aua3DwO7jDoi26OjbqSBseTKdA82l1oJLUNK0C3GgdH99SLwOlZuukNo7Iw2TzF7UHJSbF0kEazZ nqtkF9PvMPM0Fvwc3f0= Received: from njmta-180.sailthru.com (173.228.155.180) by pmta39.sailthru.com id hc4vec2v0f8u for ; Thu, 21 Apr 2022 07:23:06 -0400 (envelope-from ) Received: from nj1-rawolive.flt (172.18.20.13) by njmta-180.sailthru.com id hc4v9i1qqbsb for ; Thu, 21 Apr 2022 07:21:22 -0400 (envelope-from ) Date: Thu, 21 Apr 2022 07:21:22 -0400 (EDT) From: Seeking Alpha Reply-To: wsbfeedback@seekingalpha.com To: sterlingwhg@gmail.com Message-ID: <20220421072122.27438777.812983@sailthru.com> Subject: Wall Street Breakfast: Streaming Sea Change MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_Part_2277225_157595446.1650540082955" Precedence: bulk X-Feedback-ID: 9033:27438777:campaign:sailthru X-TM-ID: 20220421072122.27438777.812983 X-Info: Message sent by sailthru.com customer Seeking Alpha X-Info: We do not permit unsolicited commercial email X-Info: Please report abuse by forwarding complete headers to X-Info: abuse@sailthru.com X-Mailer: sailthru.com X-JMailer: nj1-rawolive.flt X-Unsubscribe-Web: https://email-st.seekingalpha.com/oc/60c1e5c4dba83e59149ff347gc3w9.hfav/52efb33b List-Unsubscribe: , X-rpcampaign: stnjl27438777 X-Spam-Status: No, score=3.5 X-Spam-Score: 35 X-Spam-Bar: +++ X-Spam-Flag: NO ------=_Part_2277225_157595446.1650540082955 Content-Type: text/html; charset=utf-8 Content-Transfer-Encoding: quoted-printable
Streaming sea change - Netflix (NFLX) lost more than a third of its value y= esterday, shedding more than $50B in market capitalization as shares tumble= d 35%.The last time the stock fell like that was nearly 18 years ago, on Oc= t. 15, 2004. Netflix (NFLX) stock slipped nearly 41% that day, all the way = to a split-adjusted $1.47 from $2.49 the session before. It=E2=80=99s a sta= ggering loss for a company that is an original FAANG stock, considered a be= drock of growth stocks. Netflix (NFLX) lost a net 200,000 subscribers for t= he quarter and forecast that it would shed 2M more in the current quarter. = That's launched talk of whether the company is saturating its total address= able market. On the earnings call the company seemed ready to throw a kitch= en sink at the problem (including monetizing free-riding viewers and creati= ng an ad-supported tier).Quote: The results were a "sea change quarter" tha= t "essentially conceded to every key point of the bear thesis," J.P. Morgan= analyst Doug Anmuth said."The bigger factor is management=E2=80=99s acknow= ledgment of relatively high household penetration when including account sh= aring, increased competition, and COVID pull-forward giving way to fundamen= tal weakness," Anmuth wrote in a note to clients. "We're moving to the side= lines as we look for greater confidence in restoring subscriber growth &= ; reaccelerating revenue, while also increasing development velocity in acc= ount sharing and advertising,"Go deeper into the changing landscape: The st= umble in the long-time dominant force in streaming may open the door for co= mpetitors to take the lead. But Wall Street is cautious, with other major s= treaming stocks all tumbling yesterday.Walt Disney (DIS), HBO Max parent Wa= rner Bros. Discovery (WBD) and Paramount (PARA) all fell more than 5% yeste= rday. There was also downward pressure for some smaller streamers often nam= ed in merger and acquisition chatter, with Lions Gate Entertainment (LGF.A)= , AMC Networks (AMCX) and fuboTV (FUBO) sliding.There have been three chapt= ers in the Netflix saga, according to Rameez Tase, co-founder of Antenna Da= ta, which tracks the subscription economy. In Chapter 1 Netflix disrupted T= V, in Chapter 2 TV fought back and clawed back market share and in Chapter = 3 TV eats its own profits because hurting Netflix isn=E2=80=99t a business = model, Tase tweeted.=E2=80=9CYes, they weakened Netflix =E2=80=A6 but at wh= at cost?=E2=80=9D he said. =E2=80=9CEach of Netflix's competitors now faces= 2 existential challenges: retention and monetization. Will they be able to= prevent churn? Will they be able to charge more?=E2=80=9D=E2=80=9CThe impl= ications? Get ready to see an all-out war for retention and monetization, p= rices are going up, up, up, (but) will consumers bear it? Wall Street shift= s from Subscribers to Customer Lifetime Value (and) Growth Marketers are th= e new saviors of TV.=E2=80=9D=C2=A0(115 comments)
3D""
<= /a> Read in Browser
 
Tech
Str= eaming sea change
Shutterstock
Netflix (NFLX) lost more than a = third of its value yesterday, shedding more than $50B in market capitalizat= ion as shares tumbled 35%.The last time the stock fell like that was nearly= 18 years ago, on Oct. 15, 2004. Netflix (NFLX) stock slipped nearly 41% that day, all the way to a split-a= djusted $1.47 from $2.49 the session before. It=E2=80=99s a staggering loss= for a company that is an original FAANG stock, considered a bedrock of gro= wth stocks.

Netflix (NFLX) lost a net 200,000 subscribers for the quarter and forecast that it woul= d shed 2M more in the current quarter. That's launched talk of whether the = company is saturating its total addressable market. On the earnings call th= e company seemed ready to throw a kitchen sink at the problem (including mo= netizing free-riding viewers and creating an ad-supported tier).

= Quote: The results were a "sea change quarter" that "essentially conced= ed to every key point of the bear thesis," J.P. Morgan analyst Doug Anmuth = said.

"The bigger facto= r is management=E2=80=99s acknowledgment of relatively high household penet= ration when including account sharing, increased competition, and COVID pul= l-forward giving way to fundamental weakness," Anmuth wrote in a note to cl= ients. "We're moving to the sidelines as we look for greater confidence in = restoring subscriber growth & reaccelerating revenue, while also increa= sing development velocity in account sharing and advertising,"

Go deeper into the changing landscape: The stumble in the long-= time dominant force in streaming may open the door for competitors to take = the lead. But Wall Street is cautious, with other major streaming stocks al= l tumbling yesterday.

Walt Disney (DIS), HBO Max parent Warner Bros. Discovery (WBD) and Paramount (PARA) all fell more than 5% yesterda= y. There was also downward pressure for some smaller streamers often named = in merger and acquisition chatter, with Lions Gate Entertainment (LGF.A), AMC Networks = (AMCX) and fuboTV (FUBO) sliding.

There have been thr= ee chapters in the Netflix saga, according to Rameez Tase, co-founder of An= tenna Data, which tracks the subscription economy. In Chapter 1 Netflix dis= rupted TV, in Chapter 2 TV fought back and clawed back market share and in = Chapter 3 TV eats its own profits because hurting Netflix isn=E2=80=99t a b= usiness model, Tase tweeted.

=E2=80=9CYes, they weakened Netflix =E2= =80=A6 but at what cost?=E2=80=9D he said. =E2=80=9CEach of Netflix's compe= titors now faces 2 existential challenges: retention and monetization. Will= they be able to prevent churn? Will they be able to charge more?=E2=80=9D<= br>
=E2=80=9CThe implications? Get ready to see an all-out war for reten= tion and monetization, prices are going up, up, up, (but) will consumers be= ar it? Wall Street shifts from Subscribers to Customer Lifetime Value (and)= Growth Marketers are the new saviors of TV.=E2=80=9D=C2=A0(115 comments)
     
Earnings
Tesla ma= rgins impress
Tesla (TSLA) is rallying premarket= after powering through supply chain issues and late-quarter disruption in = Shanghai to comfortably top estimates with its Q1 earnings report.

T= he company generated $3.3B in GAAP net income during the quarter and $3.7B = in non-GAAP net income. The automaker reports it produced 305,407 vehicles = in Q1 (+69% Y/Y) and delivered 310,048 vehicles (+68%).

Operating ma= rgin shot up to 19.2% of sales to improve from last quarter's mark of 14.7%= . Automotive gross margin excluding regulatory credits was 30.0% vs. 27.7% = consensus and 29.2% last quarter.

Tesla said it plans to grow its ma= nufacturing capacity as quickly as possible and reiterated that over a mult= i-year horizon, it expects to achieve 50% average annual growth in vehicle = deliveries. (125 comments)
     
Economy
Beige book
U.S. economic activity has expanded at a "moderate" rate since mid-February= amid strong inflationary pressures, according to the Federal Reserve's Bei= ge Book.

Strong demand but limited supply: Manufacturing activity wa= s solid for most Fed districts, though supply chain disruptions, a tight la= bor market and higher input costs continue to put pressure on firms' abilit= ies to meet demand.

As real (inflation-adjusted) disposable income g= rowth contracts to record lows, some Fed contacts noted "early signs that t= he strong pace of wage growth had begun to slow," the Beige Book said.
<= br>Consumer spending accelerated among retail and non-financial firms, as b= usinesses passed down higher input costs. For prices, "inflationary pressur= es remained strong since the last report, with firms continuing to pass swi= ftly rising input costs through to customers." (2 c= omments)
     
Featured
How ca= n you navigate a volatile earnings season?
Earnings got off to a rocky start this quarter - to put it m= ildly. JP Morgan reported a 42% profit plunge while Netflix shocked investo= rs by forecasting a 2 million subscriber drop off by July. And with big tec= h earnings coming up, it seems likely that further surprises are in the car= ds.

So how can you protect your portfolio during an unusually vol= atile earnings season?

With Seeking Alpha=E2=80=99s stock warnings, real time alerts = on ratings changes, and agile expert analysis, you'll have the tools= you need to make smart decisions this earnings season.

Our exclusive Quant Ratings - which are beating the market 4-t= o-1 - analyze over 100 metrics daily, and include EPS revisions as one of the key fac= tor grades.

That means if you follow our =E2=80=98Strong Buy=E2= =80=99 stock picks you will automatically be exposed to stocks with a highe= r chance of upward earnings revisions - a critical indicator of future grow= th potential.

Find winning stocks =C2=BB=
Tech
Ackman abandons ship
Bill Ackman sold his large stake in Netflix (NFLX) after the company reported a surprise drop in subscriber= s and looked to tilt toward an ad-supported service.

The fund manage= r said in a letter to investors that he decided to sell= the shares, and take a big loss in the process, instead = of sticking with a company where he has lost confidence to predict its futu= re.

Pershing Square lost about $435M on its 3.1B share stake in the = company, based on Wednesday's closing price, according to Bloomberg.
"While we have a high regard for Netflix=E2=80=99s management and the rema= rkable company they have built, in light of the enormous operating leverage= inherent in the company=E2=80=99s business model, changes in the company= =E2=80=99s future subscriber growth can have an outsized impact on our esti= mate of intrinsic value," Ackman said in the letter. "In our original analy= sis, we viewed this operating leverage favorably due to our long term growt= h expectations for the company." (155 comments)
     
Meta weakness
Meta Platforms (FB) saw shar= p selling yesterday as chatter around the company came in reaction to a neg= ative note from Cleveland Research, whose channel checks indicate that curr= ent-quarter business has tanked.

The firm has apparently cut its est= imates well below Street consensus, based on a slowdown in everything from = its e-commerce efforts to a breakdown in its targeting to share loss to riv= als.

The first quarter looks weak and April's to-date business is sl= owing even more than that, the firm notes. Advertiser return on investment = is weaker from inflation in CPM rates, a drop in conversion rates, and targ= eting changes - and nearly half of the agencies are set to miss their ROI g= oal, Cleveland says. (103 c= omments)
     
Today's Market
In Asia, Japan +1.23%. Hong Kong -1.25%. China -2.26%. India +1.58%.
In Europe, at midd= ay, London -0.02%. Par= is +1.45%. Frankfurt <= !--StartFragment-->+1.18%.
Futures a= t 6:20, Dow +0.58%= . S&P +1.07%. Crude +1.16% to $103.38. Gold -0.43% to $1947.20. Bitcoin +0.53% to $41,788.
Ten-year Treasury= Yield +3.7 bps to 2.873%.
Today's Economic Calendar
8:30 = Initial= Jobless Claims
8:30 Philly Fed Business Outlook
10:00 Leading Indicators
10:30 EIA Natur= al Gas Inventory
11:00 Jerome Powell Speech
12:30 PM Fed's Bullard: U.S. Economy and = Monetary Policy
1:00 PM Jerome Powell Speech
4:30 PM Fed Balance Sheet

Companies reporting ear= nings today =C2=BB
What else is happening...
Russia tests new ICBM.
Dept. of Justice files not= ice of appeal over federal transportation mask mandate.

United A= irlines (UAL) lifts off on optimistic guidance.

Real rates on the 10-year= hit positive territory = for the first time since 2020.

Carvana (CVNA) crashes post-market on big profit miss.

= =E2=80=98Stop it=E2=80=99 with the takeover talk for R= ite Aid (RAD), analyst say= s.

Atlanta Fed's Bostic sees healthcare, education as keys to supporting labor force.
Google (GOOG, GOOGL) r= eceives second request from DOJ for planned purchase of Mandiant.
Seeking Alpha=E2=80=99s Wall Street Breakfast Podcast
Seeking Alpha's Wall Street Breakfast podcast brings you all the news you n= eed to know for your market day. Released by 8:00 AM ET each morning, it is= a quick listen that you can put on as you get ready to start your working = day.
 
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