The Rundown - Netflix Walks Away From Warner Deal, Block Cuts Half Its Staff for “AI”

Episode Date: February 27, 2026

Market update for Friday February 27, 2026Check out the Public app for incredible investing tools and to support the show (LINK)Follow us on Instagram (@TheRundownDaily) for bonus content and instant reactions.In today’s episode:January PPI comes in hot, core wholesale prices jump 0.8%Netflix walks away from its Warner Bros. Discovery deal after Paramount’s $31/share bidCoreWeave stock tumbles after light revenue guidance and rising debtBlock cuts nearly 50% of its workforce in the name of AI efficiencyFun Fact: More people are are moving out of the US than moving in

Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zadadmani, and today is Friday, February 27. In today's episode, we'll break down the latest inflation report. We'll also tell you why Netflix is walking away from the Warner's deal and why Jack Dorsey is laying off nearly 50% of his workforce. Then stick around to the end of the show to find out why Americans are leaving the country, in record numbers.

We got a great show for you today. Let's go. Well, markets are coming off a pretty weird day of trading. On Thursday, 70% of the stocks in the S&P 500 were in the green, but yet the S&P 500 index fell by half a percent. The NASDAQ did even worse, down 1.2%. Now, the reason this happened was that the index was dragged down by NVIDIA. Invidia stock dropped more than 5% yesterday,

despite reporting blowout earnings. We broke down the earnings report on yesterday's show, so go check that out if you missed it. But yeah, that was kind of a surprise, and it's just another sign that the market is just freaked out about AI right now. Now, zooming out, we just got some inflation data this morning. The January producer price index report just dropped, which measures wholesale inflation,

and the numbers came in pretty hot. Headline PPI was up 0.5% month over month, higher than the 0.3% that was expected, and core PPI, which strips out, and food prices was up 0.8% in January. That is much higher than expected. And on a year over year basis, core wholesale prices are now running at 3.6%. So if wholesale prices are running this hot, that could trickle down to consumer prices as well. So definitely going to be keeping an eye on future inflation reports. And look, this report likely means that the Fed is not going to be

cutting interest rates anytime soon. So yeah, we're probably going to have another choppy day of trading putting it into this wild week. And unless we get a surprise rally today, then NASDAQ is on track for its sixth negative week in the last seven. We're going to be staying on top of everything, so make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop. Let's run through some headlines, starting with Netflix. Netflix is officially walking away from its deal to buy Warner Brothers Discovery. Remember last week, Netflix gave Warner's a seven-day window to negotiate a deal with Paramount. Well, in that window, Paramount raised their bid to $31 a share to buy all of Warner's. That top Netflix's earlier agreement to buy just WBD's studio

and streaming assets for $27.75 per share. So now the Warner's board is picking Paramount's bid as the superior one. Now, Netflix has the option to match this deal, but Netflix yesterday came out and said that they were good. They're going to just back off from this deal. Netflix co-CEO's Ted Sarandis and Greg Peters said the deal was a nice to have at the right price, but not a must have at any price. has finally come to an end, Paramount walks away as the winner. But honestly, though, I think Netflix might be the real winner here because the market hated this merger for them. Netflix stock had lost a third of its value since this deal was announced back in early

December. Now they get to walk away from this deal and collect a $2.8 billion breakup fee from Warners, which Paramount said they were going to pay. And markets are loving it. Netflix stock is up nearly 10% this morning at the time of this recording. Now, the story isn't completely done. We'll have to see if Paramount gets regulatory approval. to acquire warners. That's still not a guarantee. And the financial picture here is pretty challenging

for Paramount moving forward. You know, they probably overpaid for Warner's. Now, they have the backing of Larry Ellison, who's worth like $200 billion, but Paramount will have a lot of debt on the balance sheet. And, you know, the history of media mergers hasn't been so great. So who knows, maybe Netflix will end up buying Warner's in like three to four years at a steep discount if this merger with Paramount doesn't work out. Let's shift gears and talk about CoreWeave. Shares of the Neocloud company are tanking this morning after delivering a disappointing earnings report. Now, a quick refresher on what Corweave does, they have a bunch of AI data centers stacked with Nvidia chips and they rent out that capacity to hyperscalers like Microsoft and meta and others. And the Q4 numbers were a mixed bag.

The top line was fine. Revenue more than doubled to $1.57 billion. That beat estimates. But the guidance for Q1 was disappointing, coming in at $1.9 to $2 billion. Wall Street was expecting $2.3 billion in revenue. But I think the bigger concern here is the debt on the balance sheet. Now, Corweave's business model is basically borrow money to build data centers and then rent them out and just repeat that process. Well, they're borrowing aggressively right now. Debt and lease liabilities balloon to $30 billion at the end of December up from $19 billion just one quarter earlier. In fact, in the fourth quarter alone, 25% of their revenue went straight to paying interest on that debt. And the thing is spending isn't slowing down. Corweeb is planning to

spend $30 to $35 billion in capital expenditure this year. The thing is when Microsoft or Meta or Amazon announce these kind of Cappex numbers, it's usually not an issue because those companies are sitting on a massive amount of cash. Corweave, though, just has $3 billion of cash on the balance sheet. So they're funding all of this Cappex with debt, and that's making investors nervous right now. Shares of Corrieve are down more than 15% this morning at the time of this recording. Let's talk about some stocks making moves. today. Block shares are absolutely ripping this morning after the company reported earnings and CEO Jack Dorsey shocked Wall Street by announcing the company is cutting nearly half its workforce because

of AI. The company will be reducing headcount from over 10,000 employees to under 6,000. And they're doing this cut all in one go. It's not going to be gradual. It's all happening this week. On the earnings call, Jack Dorsey said that recent AI model improvements showed a path to applying AI to nearly everything they do. Now, people are already saying that this isn't actually about AI replacing jobs and more about Block overhiring during the pandemic and being bloated and inefficient. Revenue growth for the company have slowed down, jumping just 3.6% in the recent quarter. And that's one reason why Block shares have dropped more than 40% over the last 12 months. So I think Jack Dorsey is using AI to put a positive spin on the layoffs. He probably should have been doing layoffs a while ago,

but now he sort of looks like a visionary by implementing AI. Investors are clearly eating this up. The stock is up more than 20% this morning at the time of this recording. You know, I wouldn't be surprised if you see more tech companies announced layoffs and use AI as a cover. We've already seen this happen with Amazon and Shopify. I think we're going to see more. Now, on the flip side, dual lingo stock is getting crushed this morning after reporting earnings and announcing their shifting their strategy to prioritize user growth over near-term revenue.

Now, let's talk about the earnings first. Q4 results were solid, both revenues and earnings. earnings beat estimates and daily active users hit 50 million. Well, the company wants to double users to 100 million by 2028. And to get there, management says they're scaling back monetization, basically fewer ads, fewer paywalls, less friction for free users. So while that's great for Duolingo users, that's not great for Duolingo's business. It means slower revenue growth in the short term.

In fact, the company guided Q1 revenues to be about $288 million, which was below analyst expectations. So yeah, this strategy pivot is freaking out investors. Dualingo stock is down nearly 30% this morning at the time of this recording. I gotta say, though, it's pretty impressive that Duolingo has 50 million people using its app every day. Let's wrap the show with a fun fact. Last year, more people moved out of the U.S. than moved in, which hasn't happened since the Great Depression. American citizens are heading overseas in record numbers.

We're talking students, remote workers, and retirees. Some of the biggest inflows seeing Americans are countries like Portugal, Spain, and Germany. In fact, the American population in Portugal has jumped over 500% since the pandemic. And, you know, I think a big reason for this is the rise of remote work. U.S. salaries are still amongst the highest in the world, but the cost of living in places like Spain or Portugal can be significantly lower than major U.S. cities. So imagine earning a U.S. paycheck while paying European rent prices. That math and lifestyle arbitrage looks pretty attractive,

especially if you're someone that's young. I've seen a few TikToks pop up on my feet of Americans living abroad, people showing the rent, groceries, and health care costs. And yeah, it's a lot cheaper than what I pay here. Let me know in the comments if you're an American living abroad right now or if you've done it in the past. Well, all right, guys, that's the rundown for today. That's the rundown for this week.

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And it helps other people find the show. Thank you guys again for listening, watching, and commenting. Shout out to Mike and Connor for all the work behind the scenes. And we'll see you guys back here tomorrow. Frozen lasagna, medium power, 15 minutes. like, Ojo time. Let's play. Feel the fun with Play-O-Jo. The online casino with all the latest slot and live casino games.

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