Netflix hits subscriber growth ceiling
Among the tech companies that are reshaping the industry, Netflix seems to be unique. In serving more than 220 million households along the way, it has rarely sparked regulatory or user backlash.
As a studio, its strength has been recognized by the Oscars. This year, Netflix received 12 Oscar nominations, the most nominations for three consecutive years. As a listed company, it is favored by Wall Street most of the time, and analysts from all walks of life have never been stingy with praise.
But on earnings day, investor confidence is often overly volatile, causing changes in fundamentals to translate into market volatility. In the words of Howard Marx, chairman of Oaktree Capital, this kind of psychological fluctuation is like a pendulum, swinging from one extreme to the other with almost no transition time.
From January to March this year, Netflix’s global paid subscribers decreased and lost about 200,000 for the first time in decades. Coupled with management’s pessimistic expectations of losing another 2 million subscribers in the second quarter, the stock price plummeted nearly 30% after the market. , which lost nearly $44 billion in market value.
Equivalent to Netflix taking away $20,000 in market value for each potential churn user.
The growth, rise, and transformation of Netflix is abundantly reported, from a Phoenix video store to (one of the most powerful companies in Hollywood), Netflix’s growth has both witnessed and mirrored the decline of traditional cable TV. But in the years after 2011, when the cash flow continued to be negative and borrowed to survive, the market continued to doubt whether such a company that had raised tens of billions of dollars in a row and still had no hematopoietic ability was another capital market bubble.
With the competitive advantage shown in the competition with trillion-dollar market capitalization companies such as Apple and Amazon, the market value of Netflix’s single user will reach a peak of $1,275 in December 2021 (converted by quarterly average market value). The strategy of burning 10 to 20 billion US dollars a year to make content and buy content has been recognized.
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The entry of the ambitious Disney during the period brought more variables. They had expected to get 60 million subscribers in four years, but they did it in less than a year. In 2022, Disney already sees streaming as the new centerpiece of its $260 billion empire. At its earnings conference in February, Disney announced that it added 11.8 million subscribers in a single quarter and hopes to gain 260 million by 2024.
A month after Disney raised its target, Netflix expects to add only 2.5 million new members in the first quarter of this year — the market is already panicking because it is the worst first quarter since 2010. , it seems no wonder why the market reacted so strongly to the loss of 200,000 subscribers.
The number of users is saturated and there is almost no room for price increases. The management looking for new revenue growth points is compromising. Discussing its first-quarter results, Netflix chairman and co-CEO Reed Hastings considered launching a lower-priced, ad-supported service in response to declining subscribers and slower revenue growth. Previously, Netflix had embedded Coca-Cola, Nike, Burger King and other advertisements in the platform’s hit drama “Stranger Things”.
At present, the market value of Netflix’s single user has dropped to about $800. (Gong Fangyi)
Buffett under pressure from shareholders
- The California Public Pension Fund, the largest public pension fund in the United States, said it will vote to remove Berkshire Chairman Warren Buffett at the Berkshire Hathaway shareholder meeting at the end of the month.
- CAPS has more than $450 billion in assets under management, similar to Berkshire Hathaway’s. The former holds $2.3 billion worth of Buffett’s stock.
- One of the reasons for the removal was the belief that Buffett’s chairman and CEO role would weaken the governance structure. But Berkshire Hathaway has long been basically a two-man company — Buffett and his mentor and friend, Charlie Munger. When the two old men got older, they each found a helper.
- Berkshire opposes the recall motion. But the issue of successors has always been a concern for the outside world. Buffett did not mention this in his recent annual open letter. (Gong Fangyi)
China now has 420 million live pigs, back to high
- The Ministry of Agriculture and Rural Affairs said today that the current production capacity of live pigs has returned to the normal range. As of the end of March, there were 41.85 million breeding sows in the country, which is equivalent to 102.1% of the normal population of 41 million; the number of live pigs is about 420 million.
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- Due to production inertia, the slaughter of live pigs continued to increase to 196 million in the first quarter, and pork production was about 15.61 million tons, the highest in the past three years. According to the Ministry of Agriculture and Rural Affairs, the loss of 327 yuan per slaughtered pig in March was 153 yuan more than in February. In addition to lower pig prices, it may also be because of feed price increases.
- Since the end of February, the National Development and Reform Commission has carried out five batches of central frozen pork purchases and storage, with a total of 198,000 tons of frozen pork purchased and stored as planned to maintain price stability.
- From April 11th to 17th, the national average purchase price of live pigs was 13.86 yuan/kg, an increase of 0.3% month-on-month, which was a four-week rise in a row. However, it is only up about 1.8% from the low on the 20th of last month, and still about 21% lower than the beginning of the year.
- Pork accounts for nearly half of the total meat consumption of Chinese residents. The consumer price (CPI) in March this year rose by 1.5% year-on-year, of which pork prices fell by 41.5% year-on-year, affecting the CPI drop by about 0.83 percentage points. (Lin Guangying)
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OTHER NEWS
Suppliers in Jiangsu, Zhejiang and Shanghai were unable to supply, and Li Auto’s production in April was affected.
Li Auto responded to the “delayed delivery” today, saying that since the end of March, due to the inability to supply some suppliers in Jiangsu, Zhejiang and Shanghai, production in April has been greatly affected. At present, under the requirements of epidemic prevention and control, we are working with suppliers to actively restore production capacity, and strive to control the delay within 3 weeks. Lili delivered 11,000 electric vehicles last month.
L’Oreal’s high-end products continued to sell well in the first quarter.
From January to March this year, the group’s overall sales increased by 13.5% year-on-year to 9.06 billion euros; the two most profitable divisions – active cosmetics (Vichy, CeraVe and other brands) and luxury goods (Giorgio Armani, Lancome, etc.), grew respectively. 18% and 17.5% respectively; Europe, North America, and Mainland China all achieved double-digit growth. Management said that the Chinese market is still dynamic, Hainan has huge potential, Tmall traffic has increased, and sales on platforms such as JD.com and Douyin are growing rapidly.
Prada has closed more than 50% of its Chinese stores in the past half month.
Prada Group CEO Patrizio Bertelli said yesterday that the Chinese market is extremely important, but due to the impact of the epidemic, more than half of its stores in China have been closed in the past two weeks; however, due to the strong growth in the US market, the group’s performance in the first four months of this year still exceeded expectations. . He also mentioned that Prada will remain on the Hong Kong Stock Exchange and may consider a dual listing on the Milan Stock Exchange.
Shanghai added 7 local deaths on the 19th.
The press conference on epidemic prevention and control in Shanghai on the 20th mentioned that as of 24:00 on April 19, 52 severe patients had been treated in designated medical institutions. On the 19th, there were 7 new local deaths, 2 people under the age of 60, and 5 people over the age of 70, all suffering from underlying diseases, of which 2 people had been vaccinated against the new crown.
China’s 1-year and 5-year+ LPRs continued to be flat in April.
The central bank announced today the loan market quoted rate (LPR) for April. The one-year LPR was 3.7%, and the LPR for more than 5 years was 4.6%, flat for three consecutive months. Analysts believe that the central bank announced a 0.25% RRR cut last Friday, coupled with the fact that it has accelerated the transfer of 600 billion yuan of surplus profits to the central government, and the market liquidity is sufficient; in addition, it is also worried about inflation and overseas monetary tightening policies will cause capital to flow out.
The State Administration of Taxation will strictly investigate the enterprises that fraudulently obtain tax refunds.
According to CCTV news, data from the State Administration of Taxation shows that as of April 15, 420.2 billion yuan of tax refunds have been refunded to 527,000 tax accounts; the relevant person in charge said that big data will be used to strictly investigate tax fraud, and maliciously defraud taxpayers. Enterprises with tax credits and refunds shall be strictly investigated and handled.
The once-hot ARK Innovations ETF keeps falling.
The ARK Innovation ETF (ARKK) once made a name for itself for its successful bets on a number of high-tech growth stocks, and founder Cathie Wood also won the title of female version of Buffett. However, according to data from investment firm Bespoke, in the past year, the top ten stocks with the largest holdings have all fallen (Tesla, Zoom, Spotify, etc.), and ARKK’s latest closing price has also fallen by more than 60% from its high in February last year.
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Large private equity firms such as Blackstone would not fund Musk’s acquisition of Twitter.
According to media reports, large private equity institutions including Blackstone Group, Vista, and Brookfield Asset Management have made it clear that they will not provide financing for Musk’s acquisition of Twitter. The main concern is whether Twitter can generate enough profit to pay its debts; Musk’s vague business plan, promotion of free speech on the platform, etc., may also hurt its advertising business. It is reported that Musk is willing to pay 10-15 billion US dollars to bid for Twitter.
Blackstone Group plans to buy campus apartment real estate for $12.8 billion.
Blackstone Group will acquire American Campus Community Corporation (ACC) for $12.8 billion. ACC owns 166 properties in 71 universities in the United States, about a quarter of which are located on campus, with a total of about 112,000 beds. Blackstone said it will build more properties on the ACC platform to keep up with the demand growth brought about by the return of international students; in addition, campus apartments are less affected by the economic cycle.
The United States has lifted the public transport mask mandate, and many airlines strongly recommend that masks continue to be worn.
The Centers for Disease Control and Prevention (CDC) announced Monday that it is no longer mandatory to wear masks on public transportation. Uber, Lyft, and several U.S. airlines subsequently lifted the relevant restrictions, but emphasized respect for personal choice. Among European airlines, France and Germany still require all flights to wear masks, and some say that it depends on the rules of the destination, but it is strongly recommended to continue to wear them. People who are immunocompromised or unvaccinated may be affected.
ASML’s lithography machine orders are scheduled to 2024.
Dutch lithography machine manufacturer ASML had sales of 3.5 billion euros in the first quarter of this year, a decrease of 29% from the previous quarter, and a net profit of 695 million euros, a decrease of about 60% from the previous quarter; net bookings in the first quarter were about 7 billion euros. The management said that as chip factories scramble to expand production and lithography machine bookings are still strong, the company is also facing supply chain problems. In the future, it will cooperate with suppliers to expand production capacity and shorten the production cycle. It is expected to complete the existing of backlog deliveries.
Global smartphone shipments fell 11% in the first quarter of this year.
According to data from market research firm Canalys, global smartphone shipments fell by 11% in the first quarter of this year, and the top five market shares were Samsung (24%), Apple (18%), Xiaomi (13%), and OPPO (10%). , vivo (8%). Among them, Samsung and Apple’s shares have both expanded from a year ago. Canalys said that although demand declined in the first quarter of this year, leading manufacturers still achieved growth by launching mobile phones at various price points to adapt to different groups of people.
Evergrande restarted the “May 1 Golden Week” large-scale marketing.
According to The Paper, Evergrande issued a “May 1 Golden Week” marketing notice today, mentioning that it should focus on promoting “existing house discounts”, “supervisory account fund guarantees”, “instant online signing guarantees”, etc.; With the support of a special class, a series of sales measures have been implemented, including: channel commission policy, government supervision endorsement on-site dispatch, organizing circle customers to negotiate purchases, and coordinating banks to resume mortgage business, etc. In the second half of last year, Evergrande experienced a liquidity crisis and sales shrunk sharply. In February this year, Evergrande set a target of handing over 600,000 units this year.
The above briefings are provided by Lin Guangying and Gong Fangyi
This article is reprinted from: https://www.latepost.com/news/dj_detail?id=1113
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