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  • Jamie Adams

Why did Roku’s stock price soar this week?

Roku is on the rise, Slack starting to show positive user growth, Facebook’s Libra takes a hit, China is pulling the strings at big American firms and Boeing sets its sights on the stars! It’s the Five on Friday of course. 



The Five On Friday is our weekly newsletter covering the investing world's top stories. If you want to subscribe for more great content, simply sign up here!


The Quick Fix


#RokuOnTheRise - Roku's stock price soared this week while Netflix dropped, as the Streaming War begins to take its toll on the one-time king of streaming. 

#SlackingResults - Following increased competition from Facebook and Microsoft, Slack announced positive user growth mid-way through its second public quarter.​

#NoPayForLibra - Facebook's Libra cryptocurrency ambitions took a massive hit this week as it was announced that PayPal was pulling out of the project.​

#NBACensored - US companies such as Apple and Nike are coming under increased scrutiny for seemingly bowing to demands from Beijing in order to preserve business in the region. 

#AndFinally - US aerospace giant Boeing set’s its sights on the stars with a $20 million minority investment in private space venture Virgin Galactic.


#RokuOnTheRise

Roku surges and Netflix slides after analysts predict that Roku will triple its user base by 2022.


What does this mean?

Simply put, it has not been a good year for Netflix with the company seeing its stock price drop further on Wednesday night following reports that agnostic streaming service Roku looked likely to triple its user base to 70 million by 2022. Though not a direct competitor to Roku, Netflix has been feeling the heat of competition in 2019 as corporate giants such as Apple and Disney look set to launch competing streaming services, resulting in the one-time-king of streaming dropping more than 21% this year to date. Roku, on the other hand, will thrive from the rise in competition as its set-top boxes and other devices aggregate TV shows and movies from a variety of content makers. The more services available, the more people will need an provider-agnostic device to store them all.


Bet you didn’t know

Roku (六) is Japanese for ‘6’, representing the sixth company started by CEO Anthony Wood.


#SlackingResults

Popular SaaS company Slack caught a break this week following the announcement of good user growth, in the face of stiff competition from Microsoft and Facebook.


What does this mean?

Slack, the collaborative office software provider, is under pressure to show growth as its stock price slides. The company announced on Thursday that its number of daily active users jumped 37% from a year earlier to hit 12 million in total. This is up from more than 10 million as of the quarter ended Jan. 31, the most recent number the company disclosed. The company directly listed back in June and has since seen its stock price drop almost 40%, with Thursday’s bump a welcome sight for investors. The onus is on Slack now to prove to investors that it is experiencing user growth, especially as chief competitor Microsoft claimed to have over 13 million users back in July. Another big name in the game is Facebook, viewing its own Workplace service as a potential ‘Slack killer’ and currently claiming a respectable 3 million active users. Now in the middle of its second public quarter, the company will have to continue to grow before the year is out in order to maintain the faith of its investors.


Bet you didn’t know

Slack” is an acronym for “Searchable Log of All Conversation and Knowledge.


MyWallSt for Desktop will be going live later this month...

#NoPayForLibra

Facebook's cryptocurrency ambitions took a massive hit last Friday after PayPal announced that it was withdrawing from the Libra Association.


What does this mean?

PayPal has decided to withdraw from the Libra Association, the 28-member nonprofit organization formed in June 2019 to oversee the cryptocurrency’s creation and eventual consumer rollout. The group was established back in June by Facebook in an effort to help govern the creation and roll-out of Libra, a new digital cryptocurrency that Zuckerberg and his many minions are looking to launch across all Facebook platforms in 2020. Reports have speculated that the reason for PayPal’s abrupt departure from the group is due to increased regulatory scrutiny which has begun to surround the project. This run-for-the-hills strategy by PayPal may be a wise one and could have a snowball effect as other companies including Visa and Mastercard are reportedly also reconsidering their positions. 


Bet you didn’t know

Zuckerberg is something of a fitness nut, making a 2016 goal of running 365 miles during the year, which he met by mid-summer. Perhaps he can use this fitness to run from antitrust regulators. 


#NBACensored

Tensions between the U.S. and China grew this week following increasing scrutiny surrounding American companies' adherence to Chinese censorship. 


What does this mean?

There has been widespread fallout following a tweet from the general manager of NBA franchise Houston Rockets that publicly supported Hong Kong protestors. The tweet was quickly deleted but the damage was already done, and as of Friday, all of the NBA’s partners in China have ended or suspended their relationships with the league. Though many in the U.S. will have worried about China’s growing military power or political influence, perhaps they should be worrying about its corporate influence. Nike has allegedly pulled all Houston Rockets merchandise from its Chinese stores, while Apple, has also been accused of bowing to pressure from Beijing by removing a controversial app from its store that tracked police movements. Though China may be the Holy Grail for U.S. business, it is worrying that the cost of such deals may be freedom of speech itself.


Bet you didn’t know

The Chinese Basketball Association has more than 300 million active members, out of an estimated 450 million active players worldwide.


#AndFinally

This week we learned that Boeing is looking to the stars as the aeronautical manufacturing giant declared its intentions to take a $20 million minority stake in Richard Branson’s space tourism company, Virgin Galactic once it goes public later this year. Virgin Galactic is planning to list on the New York Stock Exchange through a merger announced in July with Social Capital Hedosophia, and Boeing want in. The company is in “the final stretch” of testing, Virgin Galactic CEO George Whitesides says, adding that it “still feels good about going into operation next year.” Though $20 million is but a drop in the bucket for a company expecting a $1.5 billion valuation, Boeing are already sowing the seeds for future collaborations with a company with access to high-speed mobility technology.


What does this mean?

Boeing are still reeling from 2 fatal crashes involving its 737 MAX range, which will leave investors in any future space endeavors rather skeptical. 


Bet you didn’t know

Guinness World Records list the Boeing Everett factory as the largest building in the world by volume at 472 million cubic feet. How much more will they need for spaceship parts?



The Week In Numbers


2.07%

is how much crude oil prices jumped on Friday morning after an Iranian tanker was struck by missiles in ongoing conflict in the region. 


$5.5 billion

is how much Europe’s most valuable fintech startup Klarna was valued at this week ahead of plans to expand in the US. The company offers ecommerce payments in installments. 


$250 billion

is the value of Chinese goods which will likely be tariffed by the U.S. should they fail to reach an agreement with China. 

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Apple, Boeing, Facebook, Nike and Roku. Read our full disclosure policy here.

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