Three Things (1/24)

Blockbuster earnings

Netflix signed up 13.1 million customers in the final three months of 2023, the company’s best quarter since the pandemic. The results are buoyed by a crackdown on password sharing, the introduction of a cheaper advertising-supported option, and solid original content. While the ad-supported tier got off to a slow start, it appears to be gaining momentum with nearly 23 million people using the more affordable service.

Just a couple of years ago, it seemed as though Netflix had hit a ceiling on growth after the company lost customers in the first half of 2022. Netflix has proven to be high-quality executors and their strategy appears to be working. In a time when Hollywood studios and other streaming platforms are merging and cutting jobs to keep up, Netflix appears to be charging ahead with confidence.

Delays at Apple

Apple announced changes to its tumultuous car project, delaying the launch to 2028 at the earliest. After previously envisioning a truly driverless car, the company is now working on an EV with more limited features. The latest plan for the car is seen internally as a Tesla “me-too product” with an updated design, a world class user interface, and increased safety features.

Despite a mountain of setbacks, an electric vehicle remains one of the company’s potential next big things — an entirely new category for the device maker that could help reinvigorate sales growth. For the product to be a hit, they must maintain a margin profile that makes sense for the business. Still, a car in the $100,000 range could fuel revenue and help Apple plant a flag in the growing EV sector.

Layoffs abound

Despite markets returning to all-time highs, corporate layoffs are taking over headlines. Ebay announced plans to cut ~1,000 workers, SAP unveiled a restructuring plan that impacts 8,000 workers, Citi is cutting over 20,000 jobs, and Silicon Valley startup Brex is saying goodbye to ~20% of its staff. 

Companies, regardless of industry and size, are still coming to terms with the new normal and are sharpening focus ahead of another uncertain year. The S&P 500 has returned to all-time highs but it appears there are still storms brewing underneath the surface. Like most things in life, things are not always what they seem; the first appearance deceives many.

Disclosures

As of writing, AAPL is a holding in Titan's Flagship strategy and TSLA is a 2.22% holding in the ARK Venture Fund.

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