The Rundown - Tesla Recalls Cybertruck, Netflix Gives Surprising Subscriber Update

Episode Date: April 19, 2024

Stock market update for April 19, 2024. Check out the ⁠⁠⁠Leading Indicator⁠⁠⁠ podcast by Public.com. 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 Zaid Admani, and today is Friday, April 19th. In today's episode, we recap Netflix's Q1 earnings and the big change they're making in 2025 that Wall Street did not like. Also, we get you caught up on more bad news coming out of Tesla. And stick around to the end of the show to learn about how Blockbuster fumbled the bag hard. All right, let's go. Guys, the markets have been such a tease all week,

especially yesterday. Stocks were in the green for most of the day yesterday, and I thought we might finally break the losing streak. No, that's not what happened. The S&P and NASDAQ finished in the red again. That's five straight negative days in a row for the S&P.

And a fun fact, the S&P has opened in the green every day this week only to close lower. It's such a tease. We haven't gotten any green all week. The S&P's on track to have one of its worst weeks in almost six months. And look, some investors are hoping

for strong corporate earnings to help, you know, turn around the markets? That hasn't been the case so far. I'll tell you what I mean. Let's run through some headlines. Let's start with Netflix earnings. We previewed Netflix earnings in yesterday's show. Well, Netflix reported Q1 earnings after the bell on Thursday, and they crushed it.

The revenues came in at $9.3 billion, and their profits came in at $2.3 billion. Both those numbers beat analyst expectations. But as we mentioned in yesterday's show, the metric that investors seem to care about the most is subscriber growth. And Netflix crushed it there to. They added 9.3 million subs in Q1. That's way more than the 4.9 million that was expected. So they beat on revenue, they beat on earnings, and they'd be on subscriber growth.

But yet, if you pull up the Netflix stock on the public app, the stock is down more than 5% this morning. Kind of wild. Netflix did make a huge announcement in their earnings. Starting in Q1 of 2025, they will no longer be reporting their subscriber numbers. I mean, that's huge because, like I said, investors seem to only care about Netflix's subscriber numbers. So starting next year, investors are going to be kept in the dark, and maybe some of them didn't like that. Could be one of the reasons why the stock dropped. Now, Netflix says the reason they're doing this is because subscriber numbers are less meaningful now, because they offer multiple plans with different price points.

This could be a sign that Netflix thinks that subscriber growth is going to be slowing down, and they don't want investors just to focus on that number. Instead, Netflix wants to focus more on revenue and engagement. They highlighted the fact that the share of TV streaming viewership across all countries is less than 10%, and they're going to. have room to grow. And one of the ways they're doing that is through live events. Like they have this WWE deal where they're going to be showing raw programming starting in 2025. And they're also putting on a boxing match between Jake Paul and Mike Tyson this summer. So we'll see if Netflix is getting into live events as a meaningful impact on their growth. We're going to dive more into Netflix earnings on the leading indicator podcast from public.com. We're interviewing one of the

top rated tech analysts on Wall Street, Mark Mahaney. He's been doing this for over 20 years. We're going to talk to him about Netflix earnings and more. So be sure to check that out. So overall, solid earnings for Netflix that continue to dominate streaming. I think they've won the streaming wars, but yet investors just weren't as happy. Hopefully, Mark, can tell us more about that. All right, let's shift gears and talk about Tesla. More bad news coming out of Tesla. The company is recalling nearly 3,900 cyber trucks.

The reason for the recall is to replace faulty accelerator pedals. Apparently, these accelerator pedals could dislodge and cause the pickup truck to, like, unintentionally accelerate and, you know, potentially get into a crash or something. This is according to the National Highway Traffic Safety Administration. Now, there's been some reports of issues with the cyber truck pedal over the past few weeks, and Tesla just confirmed that there, in fact, is an issue, and they've received two notices from customers about the pedal being dislodged. I mean, the cyber truck hasn't been on the road for that long.

They launched late last year, and this is already their second recall. Even though, to be fair, the first one in January was like a minor recall about warning lights. But, you know, the cyber trucks had a reputation for being a production nightmare. So these recalls kind of add to that perception. Elon Musk himself has said that he doesn't expect to be able to produce the cyber truck in high volume for 12 to 18 months. Let's talk about some stocks making moves today. Starting with Paramount, shares of Paramount Global are up more than 9% this morning after the New York Times reported both Sony and private equity from Apollo are discussing the possibility of a joint bid to buy Paramount. The offer would include an all-cash deal that would turn Paramount into a private joint venture between Apollo and Sony.

Paramount's currently having discussions with Skydance Media to buy them out. Skydance Media is the production company known for creating the Mission Impossible movies and Top Gun Maverick. I thought that Skydance was pretty much all set in buying Paramount. I guess Apollo and Sony are coming in with a better offer. I mean, Paramount's already rejected an offer from Apollo. Apollo offered them a $26 billion all-cash deal a few months ago, but they refused that offer in favor of the offer with Skydance. Maybe Apollo and Sony just sweetened the pot a bit.

We'll see. But investors were loving the news. Stock is up more than 9% this morning. Stock not doing so great this morning is Procter & Gamble. The stock is down more than 1% after the company reported earnings and missed on sales estimates. Procter & Gamble had a flat volume growth in units sold, especially in products in the healthcare, feminine, and family care division. Although their sales missed estimates, their profits did not.

And Procter & Gamble, in fact, raised their earnings outlook for the year. But still, it wasn't good enough to make investors happy. All right, let's wrap the show with a fun fact. Today's fun fact is about Blockbuster and Netflix. Blockbuster turned down the deal to buy Netflix back in 2000 for just $50 million. They straight up fumbled the bag because fast forward 24 years later, Netflix today is valued at more than $250 billion and Blockbuster is out of business. I mean, I have such good memories of going to Blockbuster.

There was no better feeling than going to a Blockbuster on a Friday night or Saturday night, renting a movie or renting a video game. Oh my God. Now, I know it's just nostalgia talking, but Blockbuster was awesome. Another fun fact, there's actually still one Blockbuster location still standing. It's in Oregon, but it's more of like a historical landmark at this point. Now, going back to this missed deal, Netflix was only like two years old at the time, so it's kind of hard to blame Blockbuster executives for turning this down. I think they thought they could just copy Netflix's model instead. But yeah, it didn't work out that way. Well, all right, guys. That's all I got for you guys today. Remember to check out Public.com's leading

podcast. There's a brand new episode up about the Bitcoin halving, which is happening this weekend, and also keep an eye out for the Netflix interview, which is dropping later today. Thank you guys so much for listening. Shout out to Mike and Connor for all the work behind the scenes. Have a great weekend. 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 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 Zaidid Mani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.