The Rundown - Disney and Warner Bundle Streaming Services, Duolingo Drops on Slow User Growth

Starting point is 00:00:00 Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Thursday, May 9th. In today's episode, we talk about a partnership between Disney and Warner Brothers that's bringing back the cable bundle in streaming form. We also catch you up on earnings from Airbnb, Bumble, and Duolingo, and the market's reaction to some of these earnings has me a bit confused. Then stick around to the end of the show to see how much money FTCS customers will recover from bankruptcy court. You're going to want to hear this, especially if you lost money in FTX, because it's more than

Starting point is 00:00:33 that thought they were going to get. All right, let's go. Well, it was another slow day for the stock market on Wednesday. The NASDAQ was down. The S&P was literally flat, and the Dow did squeeze out a gain, making that six positive days in a row. But, you know, nobody cares about the Dow, so whatever. There hasn't been any big economic data to react to this week, so we're not seeing

Starting point is 00:00:52 huge moves in the markets this week, like we saw the last couple weeks, which I think is fine because we could probably use a break. The Bank of England made some news this morning, announcing they plan on holding interest rates this month, but did signal rate cuts might be coming pretty soon. I wonder if Jerome Powell was taking notes. Now, to be fair, the UK economy is in a different state than the U.S. economy. Their inflation is currently lower than U.S. inflation, and their economy isn't really in the best shape. Right now, the estimates have their economy increasing by just 0.4% this year, while the U.S. economy is expected to grow by 2.6% this year.

Starting point is 00:01:24 So the Bank of England doesn't want to keep interest rates too high for too long, which could further slow down their economy. On a related note, I'm actually going to be in the UK in a couple weeks, so I'll report back with what the economic vibes are over there with boots on the ground reporting. And don't worry, I'm taking the podcast and recording gear with me, so the daily pods aren't stopping. All right, let's run through some headlines. Starting with Disney and Warner Brothers. These two companies are teaming up on a streaming bundle.

Starting point is 00:01:52 This new package by these two companies will include Disney Plus, Hulu, and Max, which used to be called HBO Max, but they rebranded it to Max last year. And everyone kind of initially didn't like it, but honestly, it's starting to grow on me now. Okay, anyways, both these services will be offered with ad-free and ad-supported tier. We don't know what the price is going to be yet, but we can probably take a guess. Because currently, the Disney plus Hulu combo from Disney costs $10. And the max service from Warner Brothers costs $10. These two services combined should cost less than $20 a month, at least for the ad-supported tier.

Starting point is 00:02:22 We're going to know pretty soon because this service is expected to launch this summer. Now, if this bundling of streaming services sounds familiar to you, then yeah, it's like traditional cable TV all over again. And it's hard to blame these companies for doing this because the cable TV bundle is one of the greatest business models of all time. But cable TV has been bleeding customers since the rise of streaming. So these media companies are starting to form partnerships to kind of get back to something like the cable bundle.

Starting point is 00:02:47 This is not even the first streaming partnership between these two companies. If you guys remember, earlier this year, Disney and Warner Brothers were teaming up on a sports streaming bundle along with Fox Corp. And that's still scheduled to roll out this fall. This might be a hot take, but cable really wasn't that bad. Maybe it's just a nostalgia talking, but like, it wasn't really that bad. I'm probably going to regret this take as soon as this podcast goes up. In related news, Warner's just reported their quarterly results this morning, and they missed.

Starting point is 00:03:10 They missed expectations on both top line and bottom line. The revenues dropped by 7%. But on the bright side, their ad revenue for the streaming segment grew by 70%. But that still wasn't enough to get investors excited, and their stock is trading down more than 3% in pre-market trading. They really need this bundle to work. Let's switch gears and talk about another company that just reported earnings. Airbnb, they reported their first quarter earnings on Wednesday after the close, and they topped estimates for revenue and profit.

Starting point is 00:03:36 Revenues were up 18% and profits more than doubled. But that still wasn't enough for investors. And the stock is actually down more than 7% in pre-market trading. The reason for the slide is due to Airbnb's weaker than expected guidance. Fancy wave saying they expect their business to grow slower than what they had initially expected. And what do I always say? investors care more about how the business is going to do moving forward than what it's done in the past. It's all about future growth.

Starting point is 00:03:59 Now, digging into Airbnb's first quarter earnings, the numbers were pretty decent. Airbnb reported 132.6 million nights and experiences booked. That's nearly 10% more than a year ago, and that's more than what analysts predicted. So there seemed pretty strong growth. Airbnb says that growth was driven by demands in Asia Pacific and Latin American regions. And the active listings on the platform grew by 15% in the quarter, with, again, Asia-Pacific, in Latin America leading the way in this category, too. I got another hot take for you guys.

Starting point is 00:04:27 Hotels are better than Airbnb's. I actually don't even think that's a hot take anymore. All right, let's talk about more stocks making moves today. Investors are swiping right on Bumble this morning. Oh, that's a terrible joke. The stock is up more than 10% in pre-market trading after reporting better than expected first quarter earnings. Revenues were up 10% and profits were also up to $33.9 million,

Starting point is 00:04:49 or 19 cents a share, which was better than expected. It's a great turnaround for Bumble. which had a loss of $2.3 million in Q1 of last year. And I think the most encouraging sign from Bumble's business might be the rise in their paying users, which jumped by 14% to 4 million users. So pretty impressive growth here for Bumble. But Bumble investors still have a big hole to climb out of. Going into these earnings, Bumble's stock was down more than 29% from the start of the year.

Starting point is 00:05:14 On the flip side, tough morning for Duelingo. The stock is down more than 10% this morning after reporting their first quarter earnings. And honestly, the numbers weren't even that bad. Revenue was up 45% better than what Wall Street was estimating. And profits were up to 57 cents a share. That's double what Wall Street expected. So why is the stock down? Well, it has to do with Duolingo's user growth. Their user growth was the slowest since Q3 of 2022. But still, their daily active users grew by 55% to 31.4 million, which is nuts, but I guess not good enough for Wall Street. Not going to lie, I'm a bit surprised by the drop in the stock price this morning. Something's not translating here.

Starting point is 00:05:54 Okay. Last dad joke, okay, I promise. But you know, don't feel so bad for duolingo investors. Their stock did hit all-time highs earlier this week, and the stock has been up more than 80% in the last 12 months. So they're doing okay. I wonder how the dual-lingo owl feels about this. All right, let's wrap the show with a fun fact.

Starting point is 00:06:11 Today's fun fact is about FTX. FTX is currently going through the bankruptcy process, and FTX customers will get their money back plus interests. Customers who claim amounts to $50,000 or less will receive approximately 118% of the amount of their allowed claim. So if you lost money in FTX, you're getting it back plus more. Big reason for that is the run-up in crypto prices in the last 18 months. For example, the price of Bitcoin is up around 270% since FTX collapsed back in November of 2022. So the FTX bankruptcy lawyers will be able to sell all the crypto assets that FTX still has

Starting point is 00:06:45 and use that money to pay back the customers that lost money. Might end up being a happy ending for FTX customers. Unfortunately, investors in FTX won't get their money back. So sorry, time, Brady. Well, all right, that's the rundown for today. If you guys enjoyed today's episode, please give us a five-star rating on Apple and Spotify. And vote in our Spotify polls.

Starting point is 00:07:03 We always put up polls on every episode, and the results for those polls are always really interesting. So if you're listening on Spotify, tap today's episode and check out today's poll. Thank you guys so much for listening. Shout out to Mike and Connor for all the work behind the scenes. We'll see you guys back here tomorrow. This is the rundown,

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The Rundown - Disney and Warner Bundle Streaming Services, Duolingo Drops on Slow User Growth

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