The Rundown - DirecTV to Buy Dish for $1, Epic Games is Suing Google Again

Episode Date: September 30, 2024

Stock market update for September 30, 2024.

Public.com presents the rundown. You're a daily market update in five minutes. My name is Zadmani, and today is Monday, September 30th. In today's episode, we tell you why stocks keep making record highs and what to keep an eye out for in the markets this week. Then we tell you why Fortnite is suing Google. Again, we also tell you about a merger between once rivals, direct TV, and DISH network.

Then stick around to the end of the show to find out why CVS shares are up this morning and which car brand has the most loyalty. All right, let's go. Stocks are coming off another winning week where they made record highs. Last week, the S&P and NASDAQ finished in the green, with the S&P 500 making record highs in the process. Both these indices are now in a three-week win streak. I think the stock market is still riding high from the Fed rate cuts from earlier this month.

On top of the rate cuts, you had China provide a big boost when they announced a massive stimulus package last week to help their struggling, And that announcement is making investors hyped all over the world, not just China. I mean, yeah, Chinese stocks have their best week since 2008, but European stocks are also making all-time highs. Now, today is the last day of September and pending a catastrophic sell-off, the S&P and NASDAQ should finish the month in the green, which would be great because remember, September historically has been the worst performing one for the stock market.

And if you guys remember how the month started off, it wasn't pretty. This week could be interesting, because the September jobs report will come out Friday morning, which will tell us how many jobs were added to the U.S. economy in September. And I feel like this report has now become the most important report, even more so than inflation. Investors are paying very close attention to the job support every month for signs of potential slowdowns. So we'll get a better feel for how the job market is doing on Friday. On top of that, we're also going to be getting earnings from Nike on Tuesday after the market close. That should be interesting because remember Nike stock hasn't been doing so good.

Their business has been struggling. And they just announced a new CEO a couple weeks ago. And then Tesla's going to be making some news. Their delivery numbers are coming out on Wednesday. So yeah, I feel like this week's going to be a little bit more exciting than last week. So make sure you guys are subscribed to the podcast to stay in the loop. Let's run through some headlines. Epic Games is back in the headlines again, doing what they do best, suing big tech companies.

The maker of Fortnite is suing Samsung and Google again. Epic Games is claiming that Google and Samsung have made it too difficult for consumers to download alternative app stores on Samsung phones and Android phones in general. See, Android phones, unlike iPhones, allow other app stores to be installed. You don't just have to use the default Google Play Store to download apps. You can actually install other app stores. But according to Epic games, Google teamed up with Samsung to make installing other app stores extremely difficult on Samsung devices.

Epic saying that that should be illegal and they're headed back to court. According to Epic, it requires a 21-step process and, let's be real. Most people aren't going to go through all that just to install another app store. According to Epic, roughly 50% of users that have tried to install the Epic App Store, they just give up. And because this process is so difficult, this effectively makes the Google Play Store the only accessible way to download apps. Because the Google Play Store comes preloaded on all Android smartphones outside of China.

And Epic Games doesn't like that because if you download an app through the Google Play Store and if people do in-app purchases on those apps, well, the developer has to pay Google 15 to 30%. And for an app like Fortnite, which is on over a billion dollars in in-app purchases, that money adds up. So to get around this, Epic actually created their own app store called the Epic Games App Store that can be installed on Android devices. If people install Fortnite through that app store, well, then Epic doesn't have to pay Google anything. Now, Google has previously said they have all these steps in place to protect users from malicious

apps and to protect their privacy. So we'll see how this plays out. I mean, Epic has had mixed results in the courtroom when it comes to suing big tech companies. They sued Apple and Google back in 2020 over their excessive app store fees, and they lost their case against Apple. but did win against Google. Google does plan to appeal that decision. Epic's lawyers just got to love this, though.

Let's shift gears and talk about satellite TV. Direct TV is buying Dish Network for just $1. Now, the reason that Dish Network is being sold for just a dollar is that Dish Network has a heavy debt load, nearly $10 billion in debt. Dish Network is owned by the publicly traded company, Equestar, and they only have around a half billion dollars in cash, which wouldn't be enough to cover the nearly $2 billion in debt payment

that is due in November. So basically, if DISH Network doesn't do this deal, they risk bankruptcy. So DirecTV would assume that debt by buying the company. Now, DirecTV is owned by a partnership with AT&T and TPG, and this deal will only go through if DISH network bondholders, the people that DISH Network owes money to, agree to shave off more than $1.5 billion in principle. Now, assuming this deal goes through,

this would put DirecTV subscribers to more than $19 million. Two million of that would be coming from Sling TV, which is under Dish Network's umbrella. And according to Bloomberg, this deal would save Direct TV, around $1 billion annually, you know, because of cost synergies or whatever corporate jargon you want to use. Now, a quick fun fact about these two companies, they actually tried to merge over 20 years ago, back in 2002. But the U.S. government actually blocked that deal because of antitrust concerns. Obviously, these days, things are a lot different now.

Streaming is pretty much dominating the industry, and these satellite cable companies just don't have the same power as they did back in the day. Some of the younger listeners might not know this. But having satellite TV, especially direct TV back in the day, it was such a flex, especially if you were a sports. fan. Crazy how times have changed. Let's talk about some stocks making moves today. Shares of CVS are up this morning after hedge fund Glenview Capital purchased a big chunk of CVS shares and plans to sit with the pharma giants management team today. Glenview Capital doesn't like the way things have been running at CVS and they want to make changes. I mean, CVS stock has been down over 22% this year. Their insurance business has been struggling with higher claims costs and their pharmacy locations

are facing a tough consumer environment. CVS's operating income fell by nearly 6% year over year in their most recent quarter. CVS last month did announce a plan to cut $2 billion in costs. They also removed the president of their insurance division. But yeah, I wonder what Glendew Capital thinks that CVS should do to turn things around. Investors seem to be pretty excited about a potential new strategy. CVS shares are up north of 3% this morning. On the flip side, shares of Stalantis are plunging this morning

after the European carmaker issued a profit warning due to industry challenges, and heightened competition in China. The company owns a ton of car brands, including Jeep, Chrysler, and Maserati. They said their sales would come in lower than expected across most of the regions it operates during the back half of the year. Investors didn't like that, and the stock is down 13% this morning. By the way, the stock, which trades under ticker symbol STLA, is down more than 40% over the last six months as they struggle with declining sales and factory production cuts.

Let's wrap the show with the fun fact. 87% of Tesla owners say they are likely to buy the same brand for their next car. And that's the highest of any car brand. This is per research by Bloomberg Intelligence. The second highest brand on that list was Lexus at 67%. So Tesla seems to have a strong brand loyalty. And that might be one reason why Tesla is the largest car company in the world by market cap. By the way, October is going to be a big month for Tesla because Tesla has their highly

anticipated Robotaxy event on October 10th. And then they report Q3. on October 16th. So a lot going on for Tesla. Well, all right, guys, that's the rundown for today. We should have a lot to talk about this week. Hopefully the markets can continue their positive momentum. As always, if you guys enjoyed this show, please consider giving us a five-star rating on Apple and Spotify. And if you're listening on Spotify, don't forget to vote in today's Spotify poll. All that engagement really does help us out. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here tomorrow.

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