April 27th, 2022
Stock prices for streaming services soared during the pandemic as lockdowns spurred a huge boost in subscriber counts. But as the crisis has slowly ended, so has the party for streaming platforms. Netflix, long considered invincible in the space, announced that it lost subscribers last quarter. And after the quick death of CNN+, companies are likely to think twice before launching niche services with narrow appeal.
Here’s a closer look at this week’s top stories.
What Everyone’s Been Buzzing About
Netflix is shedding subscribers: In its earnings call on April 19th, Netflix announced that it lost 200k subscribers in Q1. That’s the first time its subscriber count has decreased in a decade. Shares of Netflix fell 35% on the news. The upside for Netflix investors is that the streamer is still far-and-away the most popular, with over 90 million more subscribers than Disney+ which is in second place. The company also plans to crack down on password sharing which could lead to more revenue even without the addition of new users.
RIP CNN+: Just a few weeks after its much-celebrated launch, CNN+ was shut down by Warner Bros. Discovery’s new CEO David Zaslav. News execs were hopeful that the service would prove the viability of standalone news streaming platforms. It may have well done the opposite. Rumor has it that some of the in-development shows for CNN+ could eventually be launched on a future mega-service that would combine multiple Warner Bros. Discovery streaming platforms such as Discovery+ and HBO Max.
fabrics profits best: Last week, Procter & Gamble reported their largest sales and profit growth in two decades. Leading the growth were its Health Care brands (including Vicks & Crest toothpaste), Fabrics brands (including Tide detergent), and Baby, Feminine and Family-Care brands (including Luvs & Pampers). The company’s record-setting numbers went a long way towards proving to investors that consumers are sticking with their favorite name brands despite rising inflation.
Masks are no longer federally required on flights: Just in time for the summer travel rush, the federal mask mandate was struck down by a Florida judge. This could be great news for airlines who hope to maximize the vacation season while keeping their brand names out of those viral videos of in-flight mask confrontations. However, the DOJ has appealed the ruling. Also, keep in mind that airports and airlines may still voluntarily choose to keep their mask rules in effect despite the lack of a federal mandate.
IMF cuts its global growth outlook: On April 19th, The International Monetary Fund announced a downward adjustment to its growth forecast for the global economy. It now projects annual growth of 3.6%, down from its original prediction of 4.4%. IMF cited the Russia/Ukraine war as its primary reason for anticipating slower worldwide economic growth. Learn more about investing during economic & political uncertainty >>>.
What To Keep Your Eye on This Week
It looks like Elon Musk may be buying Twitter after all: On Monday afternoon, multiple outlets were reporting that Elon Musk and Twitter were nearing a deal for the company to sell itself to the Tesla and SpaceX CEO. In fact, by the time you read this newsletter, the deal may already be finalized.
Latest GDP numbers: The real gross domestic product for Q1 will be released on Thursday at 8:30 am. The results will provide the latest pulse-check on how well the economy is recovering post-pandemic. The median forecast is that GDP will have grown by a modest 1.0% during 2022’s first quarter.
Build your knowledge >>> Economic Indicators Every Investor Should Know
Here are three stories from last week that our team found interesting:
- How China’s Zero-Covid Policy is Failing Shanghai (Vox)
- I Spoke to the Experts. Bitcoin Isn’t Going to Change (New York Times)
- 42% of Women Investors Say They Got Started During the Pandemic, Survey Shows (CNBC)
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