The Rundown - Netflix Hauls in NFL Game Package, Uber Reveals New Shuttle Service

Episode Date: May 16, 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, May 16th. In today's episode, we tell you why stocks are making all-time highs and a quick update on meme stocks, which is not looking so good. Also, Netflix announced some major moves into live programming, and Uber has a plan to make traveling to airports and concerts a little bit cheaper. Then stick around to the end of the show to find out the secret stock that Warren Buffett has been buying since last year.

All right, let's go. Well, guys, the stock market rallied on Wednesday. The NASDAG, Dow, and S&P all closed at record highs. You know, the last time the S&P hit record highs was back in late March. So it took a few weeks, but we're finally back. Investors were loving the CPI report from yesterday that showed that inflation is easing up a bit. It was the first good inflation report we've had in like four months.

If you guys want a more detail recap at that inflation report, go check out yesterday's episode. We also got some new data showing that retail spending slowed down in April. The U.S. Consensus Bureau reported that retail sales for April were flat compared to last month. Now, economists were expecting retail sales to increase by 0.4% in April, but obviously, spending fell short. But investors didn't mind because less spending could mean a sign of the economy's softening, which means the Fed is more likely to cut rates sooner rather than later.

It's all about interest rates right now. Now, not every investor was celebrating yesterday. Meme stock traders were having a tough day. Both AMC and GameStop saw their stock drop nearly 20% and both of these stocks continue to trade lower in pre-market today. I mean, I mentioned in yesterday's show that the meme stock rally was starting to fizzle out, and I think we might be headed there. Let's run through some headlines.

Starting with Netflix. Netflix announced a deal with the NFL to broadcast NFL games on Christmas Day for the next three years. This is according to Bloomberg. They're getting two games on Christmas this year and getting at least one game on Christmas in 2025 and 2026. Netflix is reportedly paying the NFL $75 million per game.

This is a pretty big shift for Netflix because it's Netflix's first ever partnership with a major sports league. This follows Netflix's big bet into live events. You guys might have heard about the recent roast of Tom Brady, which was broadcasted live and definitely not safe for work. Well, it was Netflix's most watched TV show the first week it aired with nearly 14 million viewers.

Netflix also signed the deal with WWE to broadcast Raw and they're putting on a boxing match between Jake Paul and Mike Tyson this summer. So fully embracing live programming. Now, the reason Netflix is doing this deal with the NFL is that Peacog did a similar deal with the NFL last year. Peacock paid the NFL $110 million to broadcast an NFL playoff matchup exclusively on Peacock. And that worked because Peacock saw 2.8 million new subscribers sign up for the streaming

service in the three days leading up to the game. So partnering with the NFL can be a very effective strategy. And Netflix is starting to reach saturation in the U.S. market. So it needs to start getting creative with new revenue streams and content, like live programming and sports. So having the rights to broadcast exclusive NFL games on Christmas should draw tens of millions of viewers, but it could also deliver a boost for their advertising business, which is really starting to gain traction. Netflix announced on Wednesday that it now has over 40 million subscribers for its ad-supported tier, which is up from the 23 million in January and up from 5 million just a year ago.

So it's growing like crazy. Analyst Mark Mahaney said in the research note that he sees that number topping 50 million by the end of the year. No better place to show ads than an NFL game, right? Because it's like 25% ads. I wonder how the NBA feels about this because Christmas Day was kind of like their thing. But I think now everyone's going to be too busy watching football. Let's shift gears and talk about Uber because they showed off some new products at their Go Get conference yesterday. Soon you'll be able to book a shuttle from the Uber app for traveling to the airport or big concerts or sporting events.

Uber says you'll be able to book up to seven days in advance and up to five seats. And the best part is no surge pricing, which to me is huge. They're also going to allow you to schedule a shared ride in advance, and trips that are booked in advance will be cheaper. And finally, Uber announced a partnership with Costco that will allow people without a Costco membership to order groceries from Costco through Uber Eats. But those with a Costco membership will save about 15 to 20 percent, the non-members. Now, this has been available in Texas for at least over a year.

I mean, I've been using it for over a year, but they're going to start rolling it out throughout the country. Unfortunately, you're not going to be allowed to order anything from the Costco food court, which was a bummer. All right, let's talk about some stocks making moves today. Starting with Walmart. Walmart stock is moving higher this morning after reporting better than expected first quarter earnings. Walmart's revenues were up 6% to 161 billion and profits were up triple compared to last year to $5.1 billion or $63 a share, beating Wall Street estimates. e-commerce continues to be a bright spot for Walmart. Sales were up 22% in the U.S.

helped by store pickups. It's something that I've taken advantage of a lot. And Walmart's advertising business grew by 24%, which is encouraging for investors because advertising is a high-margin business, compared to something like groceries, which is a very low-margin business. Walmart also said that it's starting to win over

more high-income shoppers. Walmart now expects to hit the high end of their full-year guidance. Walmart stock is up more than 6% in the pre-market. Is Walmart like, like having a bit of a mini rebrand here? On the flip side, stock not doing so great is Under Armour. Shares are moving down after the company announced plans to restructure its business

during its earnings call today. Under Armour said the move is due to lower wholesale demand, inconsistent execution in their business, and more. That doesn't sound great. The restructuring is expected to impact both revenue and earnings going forward, causing the company to provide a lower than expected outlook for fiscal 2025. Under Armour expects earnings to be 21 cents per share in the fiscal year, while analysts' expectations were calling for around 59 cents a share.

So that's a big difference. Stock is down more than 8% in the pre-market. Let's wrap the show with a fun fact. Today's fun fact is about Warren Buffett's secret investment. Warren Buffett has been secretly buying a stock since last year, and it was finally disclosed yesterday that it was the insurance company Chubb. Berkshire Hathaway has been buying shares in Chubb since Q3 of last year, and typically that would be disclosed,

but Berkshire had requested confidential treatment from the SEC last year, probably because Warren Buffett wanted to accumulate as much Chubb stock as he could, without tipping off other investors and potentially boosting the price of Chubb's shares. Well, during that time, Berkshire bought 25.9 million shares of Chubb worth about $6.6 billion, and as soon as that was disclosed yesterday, Chubb's stock price jumped 10%. Because, you know, it's Warren Buffett. Of course it did. Now, Chub isn't really a household name, but it's a $100 billion insurance company based out of Zyrick. And you know, Warren Buffett loves insurance companies. Berkshire owns Geico. So

Berkshire adding another insurance company to its portfolio. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did, please hit us with that five-star rating on Apple and Spotify. Maybe hit that notification bell on Spotify, so you're notified as soon as an episode goes up. And remember, we do daily polls on Spotify, so tap today's episode to vote in today's poll. The engagement really does help the show. Thank you guys so much for listening. Shout out to Connor and Mike for all the hard work behind the scenes. see you guys back here tomorrow. This is the rundown, your real-time resource 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. Rounddown 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.

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