Three Things (6/24)
Jun 24, 2022
1) Netflix slashes workforce again: Netflix laid off another 300 employees in its latest round of job cuts on Thursday. After losing 200,000 subscribers in the first quarter of 2021, the streaming giant is overhauling its operations by cutting fixed costs. The move comes as Netflix seeks partners for a new ad-supported model.
Titan’s Takeaway: With competitors like Disney and Apple quickly taking market share, we are seeing Netflix transition from a growth at all costs model to one prioritizing free-cash-flow and profitability. In our eyes, the true winner of the streaming wars will be the company that can produce the most lucrative IP, not the one with the best cost-cutting strategies.
2) UK startup reaches €8 billion valuation: The UK payments startup, SumUp, raised €590 million in a debt and equity raise to increase its valuation to €8 billion. With investors including Bain Capital, BlackRock, and Crestline, SumUp’s recent fundraise speaks to the payment company’s growth. The new funding will be used primarily for product development and growth initiatives.
Titan’s Takeaway: Once rumored to be valued at €20 billion, we may be seeing signs of the public equity market dislocation leaking into the private markets. While private equity performance has grown at an astonishing pace over the past decade, higher interest rates may slow growth for the once unstoppable asset class.
3) Copper leads downward spiral in metal markets: As recession fears run high, copper prices dropped to a 16-month low, suggesting growing uneasiness in the commodity markets. The sudden drop follows a price spike after Russia’s invasion of Ukraine. Other commodities, such as aluminum, dropped by ~2% Thursday morning.
Titan’s Takeaway: Given copper’s ubiquitous presence in everyday items from appliances to automobiles, the sudden drop signals growing fears of a recession. Higher rates could lead to lower demand for metals as manufacturers look to curb production ahead of slowing consumer demand.
Correction from Wednesday's edition of Three Things: Yesterday’s Three Things incorrectly presented Twitter’s planned product release. It last increased its character limit in 2017, while the new feature is a long-form ‘Notes’ product in testing.
Cash Management
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