The Rundown - Disney Wins Board Battle, Spotify to Hike Prices

Episode Date: April 4, 2024

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Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Thursday, April 4th. In today's episode, we tell you who won the proxy fight between Disney and a billionaire activist investor. Also, Spotify is raising prices, and investors were loving that news. Then we wrap the show highlighting some stocks making moves today. And some fun facts about how much money we spent on streaming. All right, let's get into it. Well, we finally saw some green on Wednesday.

The S&P snapped a two-day losing streak and the NASDAQ also squeezed out a game. The Dow Jones did finish in the red, but, you know, the Dow is kind of irrelevant, so who cares? Fed shared Jerome Powell was doing a Q&A at Stanford yesterday, and when Jerome Powell talks, the markets listen. Even if he's doing a Q&A at Stanford. During the Q&A, Jerome Powell said that he still sees room for the Federal Reserve to cut rates this year, despite the economy being pretty strong. But he said the Fed still needs to see more evidence that inflation is moving closer to the 2% target before they make any moves. Which is pretty much exactly what he said two weeks ago at the FOMC meeting. Right now, the markets are pricing in a 60% chance of a rate cut at the June Fed meeting.

That's according to the CME Fed Watch tool. I don't know, man, that seems pretty optimistic to me. I guess we'll see. I'm even starting to get the vibe that we might not get any rate cuts this year. But I hope I'm wrong. The next inflation report is going to be a pretty important one then. The March CPI data comes out on April 10th, so in less than a week. We'll get a better picture for how inflation is doing.

And if that comes in hotter than expected, yeah, I don't know, man. We might have a tough day for the portfolio. All right, let's run through some headlines. Starting with Disney. Disney officially got the dub over activist investor Nelson Peltz. We've been talking about this for the last couple days on the show. If you guys want to recap of all the drama, go check out Tuesday and Wednesday's show. So anyways, the shareholder vote happened yesterday, and the shareholders back.

backed Disney CEO Bob Iger over Nelson Peltz, who will not be getting his two board seats that he wanted. A couple of interesting stats coming out of this vote. Around 75% of retail investors backed Bob Iger, which probably shouldn't be that surprising because normal investors probably know Bob Iger and probably trust Bob Iger more than they know Nelson Peltz, who's just a rich guy billionaire investor. Now, even though Bob Iger got the win, Disney stock did end up dropping by 3% after the results were announced. But look, the drama is finally behind us and Disney can kind of go back to running a company instead of finding expensive proxy battles spending $40 million in the process.

This whole thing just seems kind of silly to me. Well, guys, Spotify might be raising prices again, at least according to a report from Bloomberg. I mean, at this point, should we even be surprised anymore when a streaming company raises prices? I feel like this happens like once every couple weeks now. Now, according to this Bloomberg report, Spotify is going to be raising prices by one or two dollars in five markets, including the UK in Australia, by the end of this month. And then in the U.S. later this year.

And remember, Spotify's just raised prices last July from $999 to $1099. But Spotify does have a big reason for this increase in price. Audibooks. If you guys didn't know, Spotify has audiobooks now. And apparently it's already grown to be the second largest audiobook player behind Audible. So the increase in price is for Spotify to cover the additional cost for these rights to these audiobooks. But if you're like me and not a big audiobook guy, Spotify will have a new basic plan that won't include audiobooks at the current rate of 1099. So at least that's pretty nice, because I will be

downgrading to that tier right away. Now, investors love this news. Spotify stock jumped more than 8% when this report came out from Bloomberg about the price increase. Because here's a fun fact about Spotify. They've never made a profit since they became a publicly traded company. Honestly, I wouldn't be surprised if they raised prices again, because they still haven't figured out how to get profitability. And I think the only way they can really do that is by raising prices. All right, let's talk about some stocks making moves today. Levi's stock is up more than 10. percent this morning after the company raised its full year earnings guidance and beat both top line and bottom line estimates for this quarter what i found me most surprising about their earnings was

that almost 50 percent of their sales came directly through their website or levi store locations compared to 42 percent last year so they're really focusing on their direct-to-consumer business the company has previously said that they're working to grow their direct-to-consumer business to account to 55 percent of its total sales and they're almost there a company struggling this morning is blocked that's the company who owns cash app, their shares are down more than 3% this morning after Morgan Stanley downgraded the stock to underweight with a new price target of $60.

Morgan Stanley says the downgrade is due to worries about future revenues and EBITA growth. Morgan Stanley believes that cash app has a limited additional opportunity to expand its banking and credit services. Right now, Block is trading around $77 at this time of recording. All right, let's wrap the show with a fun fact. Today's fun fact is about streaming.

On average, American spend, about $46 a month on streaming services. That's according to a report from Forbes. And 44% of people surveyed for this report said streaming prices for them have gone up in the last year. Only 44%. I'm surprised that's not 100%. This was the most relatable part of the report.

45% of people reported to forget canceling their free trial. I'm guilty as charged. And 90% of people claim they will discontinue streaming subscriptions if higher prices and stricter password sharings are enforced. Yeah, I don't know about that one. I mean, ever since Netflix started cracking down on password sharing like a year ago, their subscribers have gone up. And I think that's one of the reasons why other streaming services are going to start cracking down on password sharing as well.

All right, guys. Well, that's all I got for you guys today. Hope you guys enjoy that episode. Thank you to Mike and Connor for the help behind the scenes. And most of all, thank you guys for listening to the show, especially the ones that listen to every single day. That really means a lot to us. And if you really enjoy this show, please consider giving us a five-star rating on Apple and Spotify. We'll see you guys back here tomorrow.

This is the rundown. for news events and trends in the markets. All views presented in this show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell or hold that security. Rundown guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult.

Respective professionals. Learn more at public.com disclosures. In partnership with Zaid Admani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.