Three Things (4/20)

Wednesday, Apr 20th 2022


The below content and projections are the opinion of the authors. Any conclusions or takeaways are their own. This should not be considered as investment advice. Investing involves the risk of loss and returns are not guaranteed.

1) Netflix reports subscriber losses, stock slumps as company blames competition and password sharing

  • Global net paid subscribers fell by 200,000 in the first quarter, the first quarterly decline since 2011.
  • Netflix forecast it will lose 2 million global subscribers in the second quarter.
  • The company said it believes 100 million of its subscribers are sharing their password.

Titan’s Takeaway: Netflix’s latest quarter shows the business entering a new phase in which success will have to be measured away from total subscriber growth. With Netflix shares falling as much as 24% after hours on Tuesday, it seems investors remain wary ahead of this next act for the business.

2) Robinhood buys UK crypto company as international, crypto push continues as trading environment cools

  • Ziglu, based in the U.K., allows retail investors in the country to buy and sell cryptocurrencies.
  • Robinhood, which only operates in the U.S. today, said this deal comes as it eyes international expansion.
  • Last year, cryptocurrency transactions were Robinhood’s fastest-growing revenue stream.

Titan’s Takeaway: Just as the pandemic pulled forward growth for “stay-at-home” winners like Peloton, Netflix, and Zoom, so too is Robinhood navigating a path towards “new normal” growth. And with trading activity slowing in its most recent quarter, it appears this project for Robinhood will prioritize new markets with new products over reengaging the meme traders of 2021.

3) Florida may seek to end Disney’s special tax deal as tensions with the state continue to escalate

  • Disney World is located in Florida’s Reedy Creek Improvement District, which essentially enables the company to oversee land use and environmental projects in its boundaries.
  • Florida Gov. Ron DeSantis asked state lawmakers on Tuesday to reconsider this agreement between the company and the state.
  • Disney and DeSantis have clashed over the company’s rebuke of Florida’s Parental Rights in Education bill signed last month.

Titan’s Takeaway: Disney’s parks business continues to rebound from the pandemic, but rising tensions with Florida threaten to create a lingering political headache for the company. And while financial impacts in the near-term may be limited, mixing business and politics can create difficulties that weigh on organizations in ways that go beyond the bottom line.

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