♒ Netflix's new CEO(s) & BIG marketing spend

Welcome to MM, we dove through the dumpster fire that is stock market news and found you some gold… because we care. 🤗 Here’s our Friday finds:

Neftlix’s new sheriff(s) in town 🤠🤠

| news sentiment: 🟢🟢 | high news volume🔥 | earnings 🗓️

Netflix was the most talked-about stock on the street yesterday, finishing with positive news sentiment after dropping one of the most-anticipated earnings reports of 2023. It read almost like a classic Clint Eastwood flick, with a lil bit of everything.

The Good

This was the megastreamer’s first quarterly report since launching its $6.99/month ad-supported tier back in November… and it didn’t disappoint. The results:

• 7.66M net new subscribers🔥(nearly 70% more than analysts expected, and more than double its subscriber growth from Q3). For reference, Netflix added 8.9M subscribers throughout the all of 2022… meaning 86% of this year’s subscribers were added in the Q4 alone.

The Bittersweet

Founder Reed Hastings stepped down from his role as long-time CEO, handing over the reigns to co-CEO’s Ted Sarandos & Greg Peters.

It’s always a little bittersweet when the person who started the company relinquishes their control to someone else, especially someone as truly badass & blockbuster-busting as he is. 😥

It’s also significant in the broader lens of big tech. First it was Gates, then it was Bezos. Hastings was one of the last remaining founder-CEOs of the Dot-com era, and his exit paints a new picture for what the big tech landscape will look like going forward.

The Ugly?

The bad news out of the report was Netflix’s profits. Despite meeting revenue projections, Netflix’s quarterly earnings were 73% below expectations ($0.12 EPS vs. $0.45 expected) — owing to a few key factors, but one stands out in particular: it’s staggering marketing expenses.

• Throughout the past year, Netflix reportedly spent $2.53B in total marketing.

• With a little math (from our friend @ecommerceshares on Twitter), this equates to around $284 per new subscriber. 👇

This is pretty crazy in my book. It’s a clear sign that Netflix is doing a lot to maintain its former pace and keep up with the renewed competition…

Keep in mind the landscape has changed pretty drastically in the past few years; while Netflix maintained a head-and-shoulders lead in the streaming space for a looonng time, the OG is now essentially neck-and-neck with Disney (which owns Disney+, ESPN+, & Hulu) in terms of total subscribers.

And the competition is clearly escalating. If Netflix’s marketing spend is any indication, its that we’ll continue to see a dog fight for streaming share going forward.

NEWS NUGGETS🥔

Top trending commentary parsed from news coverage

Bullish News Snippets:

| source: Entrepreneur.com | sentiment: 🟢 | analyst commentary 🗣️

“Despite the challenging macroeconomic environment, CSCO has gained 10.1% over the past six months, and Wall Street analysts see another 17% upside in the stock… Moreover, the company has raised its full-year 2023 guidance on the back of its significant backlog, strong ARR and RPO, and easing supply situation.”

| source: MarketWatch | sentiment: 🟢 | earnings 🗓️

“Shares of Prologis rallied 1.0% toward a four-month high in premarket trading Wednesday, after the logistics real estate investment trust (REIT) reported fourth-quarter profit and revenue that beat expectations, even though the full-year outlook was a bit downbeat.”

Bearish News Snippets:

| source: MotleyFool | sentiment: 🔴 | analyst commentary 🗣️

"Since hitting an all-time high above $400 per share just 15 months ago, Upstart shares have nosedived 96%… Since Upstart's operating model revolves around vetting loans, the fastest pace of rate hikes in four decades is terrible news.”

| source: MarketWatch | sentiment: 🔴 | report 📊

“Roblox shares fell as much as 8.5% following Roblox’s better-than-expected performance metrics for December, which left one analyst skeptical about how loyal Roblox users will be in an economic downturn, especially since it is parents who are likely footing the bill for Roblox’s platform currency, Robux.”

| source: WallStJournal | sentiment: 🔴 | report 📊

“Global IT spending contracted 0.2% in 2022, dropping to $4.38 trillion—a rare instance of corporations spending less on digital business tools than in the previous year.”

Earnings This Week:

| source: MarketWatch | sentiment: 🌑 | earnings 🗓️

“In the second quarter, Procter & Gamble Co. raised prices even more it did than last quarter, which led to a deeper-than-anticipated drop in demand — but the branded consumer goods giant is OK with that, as it still managed to keep pace with its peers.”

| source: Zacks | sentiment: 🌑 | earnings 🗓️

"Fastenal’s shares dropped 1.1% in the pre-market trading session on Jan 19, after it reported fourth-quarter 2022 results… The company’s top and bottom lines improved on a year-over-year basis, given the strong demand in markets associated with industrial capital goods and commodities amid inflation for products, particularly fasteners and transportation services.”

| source: Investing.com | sentiment: 🔴 | earnings 🗓️

“Charles Schwab stock fell 3.5% after the brokerage and wealth management firm fell short of expectations for earnings.”

FLUB AWARDS 🏆

worst things seen on stock market news sites

Share this newsletter with a friend to unlock two FREE months on Babbl:

How would you rate today’s post?

1. Incredible 🔥🔥🔥🔥🔥

2. Considerably decent 😺😺😺

3. Not your best bro 👎

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

SENTIMENT KEY: 🟢=bullish, 🌑=neutral, 🔴=bearish