July 17, 2020 – Netflix drops big growth news, U.S. Covid-19 cases hit a new single-day high, Hong Kong’s leading airline suffers and tidbits galore from a news-packed Friday.
Today’s word count: 1,265 words (7 minutes)
Netflix Names Ted Sarandos Co-CEO, Adds 10 Million Subscribers
It was a Netflix news dump for the ages Friday. First, the company announced it added another 10.1 million subscribers in the second quarter, surpassing projections. Then, it announced the promotion of Ted Sarandos to the role of co-CEO, putting him in a position to lead the company past the time of Chair and Chief Executive Reed Hastings.
Why It Matters
It’s no surprise to see Netflix’s numbers go up over the past few months. The company produces content on a timeline much earlier in advance than its broadcast and cable rivals, resulting in an uninterrupted 2020 schedule as consumer habits shift because of the pandemic. With movie theatres closed and live sports on delay, Netflix had little competition and converted a global crisis into a massive growth opportunity. The streaming service’s conversion rate is projected to slide in the second half but has already set the company up for a big year.
The Sarandos news is equally important. The 55-year-old executive’s rise paints a clear picture of a potential succession plan. Hastings isn’t that much older, he’s 59, but knowing who will lead the company into the future provides extra stability for investors. And Sarandos’ record speaks for itself, playing an integral role in Netflix’s “meteoric growth” over the last decade. “As chief content officer, he has been the architect of the streaming service’s hugely successful original-programming strategy. Not only has Netflix become the most prolific producer of content, but it is also a regular contender for Academy and Emmy awards,” The Wall Street Journal writes.
Numbers to Consider
- 26 Million – The total number of subscribers Netflix added so far in 2020.
- 192.9 million – Netflix’s total subscriber count at the end of Q2, up from 151.6 million a year earlier.
- $6.15 Billion – Netflix’s reported second-quarter revenue, up from $4.92 billion a year earlier, along with a profit of $720 million.
Read More: (WALL STREET JOURNAL)
Coronavirus Updates: U.S. Shatters Single-Day Caseload
For an upcoming piece, I wrote the U.S. was approaching nearly 70,000 cases a day worldwide. The story is expected to run Saturday, and I figured that was a fair amount of time where that number wouldn’t need to be updated. I was wrong.
The U.S. shattered its previous daily record and reported 75,600 new cases Thursday. It’s a startling number to see, and even more concerning considering how just a month ago, cases were only approaching 40,000 per day.
Why It Matters
We’re at a point where it’s going to have to get significantly worse before it gets any better. Last month, U.S. infectious disease specialist Dr. Anthony Fauci warned senators and the general public the country could reach 100,000 cases a day if the country failed to contain the outbreak. Hitting that milestone seems like an inevitability at this point as mask-wearing and other mitigation efforts remain controversial across the country.
Attempts to reopen and the relaxing of social distancing guidelines may also be contributing to “the first noticeable nationwide increase in coronavirus fatalities since April when the pandemic initially peaked.” The U.S posted nearly 1,000 new Covid-19 deaths Thursday to join its new daily record of infections.
In the world, India crossed the 1 million confirmed infections and 25,000 deaths milestone. U.K. Prime Minister Boris John predicted a “significant return to normality” by Christmas and China began offering unproven vaccine candidates workers at state-owned companies and the armed forces.
Numbers to Consider
- 68,241 – The previous U.S. single-day high of new coronavirus infections before surpassing 75,000 Thursday.
- 156 – Florida’s reported fatalities Friday, its highest number.
- 64 Percent – The drop New York, once the country’s hardest-hit city, has seen since June 1, while cases surge around the rest of the United States.
Read More: (NEW YORK TIMES)
A Quick Look
Hong Kong’s Main Airline Expects $1.3 Billion Loss
- As Covid-19 restrictions continue to ravage airlines worldwide, Hong Kong’s flagship carrier, Cathay Pacific Airways, announced a net loss of $1.3 billion for the first half of the year.
- The company unveiled a $5 billion government funding package from the government last month to help ride out the downturn. But Cathay only carried 900 passengers a day in June, which the company says corresponded to less than 1 percent of the passengers it took a year ago.
- Other airlines signaled tough times in the coming weeks as well. American Airlines sent potential furlough notices to 25,000 employees, Singapore Airlines warned about a rough set of financials for this quarter and Delta Air Lines announced a $5.7 billion quarterly loss.
- The airline has plans to increase its flight schedule from 4 percent of normal levels in June to as high as 10 percent in August. Overall, Cathay’s stock has dropped nearly 40 percent on the year.
Read More: (WALL STREET JOURNAL)
Worth Your Time
Here Comes Trouble: TikTok’s tense situation is boiling to a point. The Financial Times reported the White House is considering banning U.S. companies from providing technology to the short-form video app, a move “throttling the ability” of TikTok to operate in one of its most important markets. However, another tip from the White House says TikTok likely may separate from ByteDance and become a U.S.-based company to resolve the Trump administration’s national security concerns. (THE FINANCIAL TIMES) (REUTERS)
The Unforgettable Fire: Pacific Gas & Electric had acknowledged its probable liability in causing the vicious Kincade Fire in California last year. But the blame became official after a group of California investigators deemed a faulty transmission line caused the fire. The decision has massive liability implications; the company says it could lead to at least $600 million in liability related losses. (WALL STREET JOURNAL)
U.S. retail sales took another significant step toward normalcy in June, jumping up by a “better-than-expected” 7.5 percent. But economic recovery is still threatened by concerning virus trends and high unemployment.
While Nikola and Hyliion draw the majority of attention, perhaps the next exciting trucking company is autonomous trucking startup Plus.ai. The company, based in the U.S. and China, is in talks to raise $60 million in a sale that could value the company in the range of $600 million to $1 billion.
The Centers for Disease Control and Prevention extended the no-sail order for cruise liners to ensure that when sailings resume, they’re done with the proper Covid-19 preparations.
In a plot straight out of a spy movie, Russian hackers have allegedly been targeting organizations involved in medical research and Covid-19 vaccine development in Canada, the U.S. and the U.K.
The FBI has launched a probe into the “severe and unusual” hack on Twitter used to perpetuate cryptocurrency fraud, highlighting the massive data risks at play for the social media company.
Demand for Wirecard’s bank may be waning among investors with the “biggest appetite for risk” as the concerns over the insolvent company’s books continue to prove it will be highly unlikely to track down its $2 billion debt load.
American mortgage rates hit a record low for the seventh time this year, which dropped to an astonishing 2.98 percent 30-year home loan.
San Francisco venture capital firm CRV raised $600 million for a fund focused on early-stage startups. But instead of an ordinary raise, the firm did it completely over Zoom.
A Couple Cents Content
I compiled some information on Oatly’s eye-opening capital raise and the rapidly growing plant-based food market. (POST)
Check out Thursday’s Live Show discussing Draft Kings, Tesla, Fastly and a general market update. (YOUTUBE)
If you haven’t already, catch up on Justin Oh’s breakdown of Fisker stock ($SPAQ). (YOUTUBE)
Thanks for reading!
— Justin Birnbaum