The Rundown - Reddit IPO to Debut, Micron Soars on Earnings Beat

Episode Date: March 21, 2024

Stock market update for March 21, 2024. Get started with Public: Click here The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Thursday, March 21st. In today's episode, we recap the Fed meeting in why investors are feeling good right now. And today is Reddit's IPO date. Reddit's stock will start trading on the stock market, and there is some positive momentum right now. We'll give you the latest. And then we end the show highlighting some stocks making moves today. And a fun fact about the cost of streaming services. You're not crazy, the prices have been going up. Stick around to find out more. All right, let's get into it. Well, the stock market was on a roll yesterday. The Dow, S&P, and NASDAQ all made decent gains and closed at record highs. And we should probably thank Jerome Powell

and the Federal Reserve for this rally yesterday. The Fed wrapped up their meeting yesterday and said something that investors really liked. So let's talk about it. First, let's start with the basics. The Fed did not cut rates this month. The Fed decided to keep rates between 5.2,000. and 5.5%. Not a surprise there, as we said multiple times leading up to the meeting, no rate cuts were expected. But the Fed did say they still expected cut rates three times this year. And that was the happy surprise to come out of this meeting. Because if you listen to this show daily, going back to the last two months, first of all, shout out for being an OG, but you also know that inflation has been hotter than expected over the last couple months. And because of that,

a lot of investors thought the Fed might freak out a bit and reduce the amount of rate cuts this year. has been projecting three rate cuts this year since December. And so the fact that they still plan to stick to that and aren't that worried about the hot inflation reports was a positive sign for investors. Powell was obviously asked about those inflation reports. And he said that that data could just be bumps in the road on a path to 2% inflation. That's the Fed's target. So shout out to the Fed for being kind of optimistic about the whole thing. I'm not going to lie. I thought that Jerome Powell was going to go in there and be a lot more hawkish, you know, maybe even throwing the hike word in there.

But no, that's not what happened at all. The vibes were good. In fact, the vibes were so good yesterday that Jerome Powell even cracked a joke at the end of the meeting that made the entire room laugh. So Jerome Powell was in his bag yesterday. He's out here pumping our portfolios and making us laugh. The dude was cooking. Now that the Fed meeting is out of the way, let's talk about the other most anticipated finance

story of the week. The Reddit IPO. Reddit stock will start trading today. We've talked about the Reddit IPO in previous episodes. It's the first social media company to go public since Pinterest back in 2019. So it's been a while. And the IPO price has officially been set at $34 a share, which was the high end of their target range. So based on $34 a share, that would peg Reddit's valuation at $6.4 billion, according to the Wall Street Journal.

And Reddit's been around for a while now. It actually launched 19 years ago, even before Twitter. But despite being around for almost two decades, Reddit has never turned a profit. which is one of the things that investors are somewhat skeptical about. And it was a big talking point leading up to the IPO. But there are some investors that see upside in Reddit's business, specifically Reddit's data licensing business, which they recently started to do.

Essentially, Reddit is getting paid by AI companies like Google to have access to Reddit's data to train AI models. Like right now, Reddit has a $60 million data licensing deal with Google. So we'll see how big of a business that'll end up being. And Reddit also has an advertising business as well. So we'll see how the stock does today. A lot of interesting narrative. is going into this one. If you guys want to follow along with how the Reddit stock is performing

throughout the day, the stock will be available to trade on the public app under ticker symbol RDDDT. And while you're there, you can learn more about the company's history and its financials. We got some potential M&A news happening in Hollywood. Private equity firm Apollo Global is making an $11 billion bid for Paramount Global's film and television studios, which is behind hits like Top Gun Maverick, great movie, and a quiet place, kind of overrated. Now, the interest thing about this offer, Apollo's bid is only for Paramount Global's film and TV studios, not the entire company. Apollo's bid doesn't include the rest of Paramount Global, such as networks like CBS, Nickelodeon,

Comedy Central, and MTV, probably because no one under the age of 36 watches that stuff anymore. The deal also wouldn't include Paramount Plus, which is the company's streaming service, which I think is still a money-losing machine. Now, the reason I say this bid is interesting is because Paramount Global's entire market cap, which includes the studios, the streaming service, and the TV down. networks is under $8 billion. So Apollo is giving $11 billion just for the movie studios.

Kind of weird. I guess that's how bad they don't want the streaming service or the TV networks. We'll see how this plays out. Paramount Global has had multiple offers, like including a merger with Skydance, which is a production company owned by David Ellison, the son of Larry Ellison. Yes, Oracle's Larry Ellison, seventh richest man in the world, depending on which day you check. And there was also some brief conversations about Paramount Global potentially merging with Warner Brothers Discovery. But that hasn't really gone anywhere.

Investors are liking the news so far. Paramount Global stock jumped nearly 12% on Wednesday in reaction to this news. All right, let's wrap up the show with some stocks making moves today. Big winner today is Micron. The semiconductor stock is up more than 17% after reporting better than expected earnings. Micron beat on both earnings and revenue estimates boosted by AI demand for memory chips. Revenue grew by nearly 60% from the previous year and the company reported a profit of 42 cents a share, which is awesome because Wall Street was expecting a loss for the quarter.

And the management's comments on the future performance were pretty positive. They said that their product portfolio positions them to well deliver a strong fiscal second half of 2024. And they think that Micron will be one of the biggest beneficiaries in the semiconductor industry of the multi-year opportunity enabled by AI. On the flip side of stock not doing so hot today, five below. The discount retailer stock is down more than 12% after missing earnings, with management citing, theft for his poor profit performance. Now, Five Below said in order to combat this problem, they're going to lower the use of self-checkout. They plan to have 75% of its transactions occurring with an employee present across its businesses.

Management also noted plans to increase staff and securities at the stores. All right, let's wrap up the show with a fun fact. Today's fun fact is about streaming services. Americans are paying an average of $61 a month for video streaming services. This is according to a survey from Deloitte. That's up from $48 a year ago. Stream inflation right now is getting out of hand. All these streaming services are raising prices right now.

Netflix, Max, Disney. Like, when are we going to reach a breaking point? What's funny is, 36% of people in the survey said that they didn't think the content was worth the money. So at some point, streaming services need to chill out a bit and stop jacking up these prices. I don't even know why I subscribe to all these streaming services because I'm mostly just watching Netflix or YouTube.

What services do you guys mostly watch? We'll make that the Spotify poll of the day. So if you're listening to this on Spotify, Spotify, tap the episode, and vote in the poll. The winner's going to be Netflix, but I'm really curious to know by how big of a margin. Like, is it going to be like 80% Netflix? All right, guys, that's all I got for you guys today. This is a part of the show where I chill for five-star ratings.

If you guys enjoy the show, please hit us with a five-star rating on whatever podcast platform you're listening to. Spotify, Apple, we'll take it all. Your support has really helped the show grow. We're currently in the top 15 business podcast on Spotify, which is incredible. So thank you guys so much for listening. Thank you guys for all the engagement. and we'll 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. 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 Aided Mani, brokerage services for U.S. listed, registered securities, are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.