The Rundown - Paramount Cuts 15% of Workforce, Meta & Google Target Teens in Secret Ad Deal

Episode Date: August 9, 2024

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Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Friday, August 9th. In today's episode, we tell you about the latest jobs data that has the stock market feeling good again. Also, we tell you about Paramount's plans to cut jobs as they get ready for a merger. Also, two big tech companies had a secret ad campaign targeting teenagers. We'll tell you about that. Then stick around to the end of the show to learn about China's newest, richest person.

Used to be a Google engineer, but now he sells $3 shirts. All right, let's go. Stocks were flying on Thursday. The S&P and NASDAQ were both up more than 2%. Actually, the S&P had its best day since November of 2022. So markets are happy again, and one driver of that might be some positive data that we got regarding the job market. The latest jobless claims report showed that 233,000 people filed for unemployment last week.

But economists were expecting $240,000. So this could be a sign that the U.S. labor market might not be as bad as we thought last week. But again, it's just one data point. Overall, though, it feels good to see the markets bounce back the way they did after the freak out that we had on Monday. And don't look now, but the S&P is within half a percentage point of finishing the week in the green. And Bitcoin, by the way, is back above $60,000 after dropping below $50,000 on Monday. It's been a pretty wild week. And it's crazy that stocks might actually finish the week in the green.

I bet you if you told people on Monday afternoon that we'd be in this spot today, they probably wouldn't believe you. Let's run through some headlines. Paramount is cutting a ton of jobs. The entertainment giant announced that it'll be cutting 15% of its workforce. It's about 2,000 jobs. This job cut is part of the company's plans to save around $500 million. The job cuts will be affecting employees within the communication, marketing, legal, technology, and finance departments. Now, remember, Paramount is planning to merge with Skydance,

media for more than $8 billion. Paramount still does have a 45-day period to explore more attractive deals, but there might not be any suitors left. Like Sony was previously interested in buying Paramount, but they recently came out and said that they're no longer interested. So it looks like this Paramount Skydance merger is likely going to be happening. And it's not unusual to see job cuts when company mergers happen. By the way, Paramount also reported earnings, and it wasn't great. The revenues dropped by 11% missing estimates. Paramount also took a one-time $6 billion write-off related to the decline in its cable networks. There was a bright spot, though. Paramount streaming business was profitable for the first time ever. Paramount Plus, which is Paramount Streaming platform, saw its revenues grow by

46% year over year, and their subscriber count is at 68 million. Paramount stock is up more than 4% in the pre-market in reaction to this news. Still, it's a pretty tough time to be a legacy media business. Warner Brothers, Disney, they're all kind of struggling. Now, speak to you. Speaking of companies that aren't struggling, at least financially, Google and Meta, they've been crushing it all year, but they keep screwing it up again when it comes to dealing with data for users under 18 years old. The Financial Times reported that Google and Meta were secretly working on a YouTube ad campaign to market Instagram to teenagers.

Now the thing is, Google has rules against advertising the children on YouTube, but the companies found a loophole. These Instagram ads were labeled as unknown in the advertising system. though Google had a high degree of confidence that the unknown group was full of younger users, people under the age of 18. Now, to make it worse, this was happening while Zuck testified to Congress about the abuse of minors on its platforms earlier this year. So not a good look for the two tech giants. This stuff is just frustrating to hear about. Now, Google has said they shut down this program and that it was small in nature. And they're also going to thoroughly review

the allegations and take appropriate steps. Yeah, I hope they do. Let's talk about some stocks making moves today. The shares of Sweet Green are up big after the salad chain reported a beat on revenue and lifted its outlook for the full year. Same store sales for Sweet Green jumped 9% last quarter, well ahead of estimates. And not only is Sweet Green selling more salads, but they're also losing less money. Quarterly losses narrowed to $14.5 million, down from the $27.3 million a year ago. So yeah, they're still selling $16 salads and somehow still aren't profitable, but investors are

liking the progress the company is making. And it seems like some of the new menu items like the steak offerings are bringing people to its restaurants. Sweet Green stock is up more than 25% in the pre-market at the time of this recording, and the stock is up more than 130% since the start of the year. It's been a pretty big year for Sweet Green. Now, on the flip side, it hasn't been such a great day for Elf Beauty. Shares are falling after the company reported earnings. Actually, the company's earnings were pretty good. They beat estimates and raised their outlook. Kind of weird. Elf Beauty's revenues drew by 50% to $324 million, and Elf now expects to make around $1.3 billion in sales for fiscal 2025. And I think this is the reason why the stock might be down. I think Wall Street

had higher expectations for Elf when it comes to their guidance. Elf's stock is down more than 8% in the pre-market on this news. Let's wrap the show with a fun fact. The founder of Timu has become China's richest person. Colin Huang, a formal Google engineer, the dude is just 44 years old and his net worth crossed $48 billion, overtaking the net worth of Zhang Shen Shan, who they call China's water bottle king. Zhang held the title for richest person in China since 2021. Now even though Colin now holds the title for richest person in China, he has been richer in the past. His peak net worth was over $70 billion back in 2021 when Timu's parent company's pin duo duo stock was experienced a COVID boom. But like many tech companies,

the stock went on to crash by over 80% in the following years. But the stock has made a nice comeback thanks to the success of Timu in the U.S. Pinduoduo saw a 90% increase in revenue in 2023 compared to 2022. So business is booming. Well, all right, guys, that's the rundown for today. That's the rundown for this week. And what a wild week it was. The week started off with the sky falling.

We saw a bunch of companies report earnings and the stock market made a comeback. And stocks might end up finishing the week in the green. I mean, I'm not going to lie. I'm kind of enjoying the volatility. Remember, we got a new show every morning the stock market is open. So don't forget to subscribe to the pod. It's been a pretty epic week for the show. The rundown is now ranked number six on the top business podcast on Spotify.

So thank you to all the listeners that support the show, whether you've been listening all year or you just started listening this week. Don't forget to give us a five-star rating on Spotify or Apple. And if you are listening on Spotify, don't forget to vote in today's poll. That engagement really does help us out. Thank you guys again for all the support. shout out to Connor and Mike for all the help behind the scenes, and we'll see you guys back here on Monday.

This is the rundown, your real-time resource for news events and trends in the markets. All views presented in the 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. Run-down 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 Zaited money, brokerage services for U.S. listed, registered securities are offered by open to the public investing incorporated, member FINRA and SIPC.