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  • Jamie Adams

With 7 Million New Subscribers, Is Netflix Back On Track?

Netflix’s stock rises on earnings report, SoftBank may have a bailout for WeWork, Roku’s party keeps on going, the economy could be in trouble if trade war doesn’t end soon, and Google unveils its new hardware. 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!


#NetflixSoars

Some welcome good news for Netflix shareholders as the company opened on Thursday with a 5% increase in stock price.


What does this mean?

It’s no secret that 2019 has not been the best year for Netflix, with its stock falling from its April highs of almost $400 and the ever-looming threat of competition.Despite missing out on domestic subscriber growth estimates and revenue, the company's earnings per share of $1.47 blew analyst estimates of $1.04 out of the water. Netflix addressed the onslaught of new services this coming quarter such as Apple and Disney and admitted that there may be headwinds, yet remained positive that the company could cope with the competition considering it has been doing so with the likes of Amazon and Hulu for years. Summing up Netflix’s position is best left to the kings of streaming themselves: “While the new competitors have some great titles (especially catalog titles), none have the variety, diversity, and quality of new original programming that we are producing around the world.” I Couldn’t agree more. 


Bet you didn’t know

In the late ’90s, Netflix executives would stop around to customers’ houses (with permission) to observe them using the website, usually bringing the user a cup of coffee.


#SoftBankSaviors

WeWork’s chief backer, SoftBank, is in talks with JP Morgan on a potential WeWork bailout as cash is expected to dry up by November.


What does this mean?

Japanese based SoftBank is reportedly looking to take control of WeWork in a deal with JP Morgan and further sideline the company’s founder Adam Neumann. Any followers of the Five On Friday will know all about the troubled tale of WeWork and its failed IPO this year. SoftBank already owns one-third of WeWork but is aiming to invest several billion dollars in additional equity and debt in the company. SoftBank CEO Masayoshi Son will look to recuperate some of his $10 billion investment as the loss-making property group faces a cash crunch that threatens its solvency, with almost 2000 job cuts already reported this week alone. It is unclear if a deal between SoftBank and WeWork could be clinched, but if something does not change soon, the reputation of Son’s $100 billion Vision Fund will be under serious threat.


Bet you didn’t know

Neumann declined to take a salary from WeWork during 2018, and in 2017 he was paid just $1. Of course, he also took a bunch of personal loans out from the company, so it kinda evens out.

#RokuTVPlus

It’s been a non-stop party for Roku all week as its stock price saw another rise of 10% following news it will support Apple TV+.


What does this mean?

It’s been another good week for Roku: Wall Street is behind it, its stock is up, and it’s featured on our lucrative Five On Friday two weeks in a row. Shares in the company climbed more than 10% on Tuesday after the company announced that the Apple TV app is now available on its streaming platform. This move comes in the wake of Wall Street analysts’ comments last week that estimated the platform-agnostic service would triple its user base by 2022 to 72 million active users. It is a time of massive growth potential for services such as Roku, which are benefiting greatly from the increasing number of services being made available to consumers across the board, also known as ‘the streaming wars’. Apple TV+ itself will be released in just over 2 weeks, with Disney Plus arriving less than a fortnight later, with many other services later becoming available on Roku. The streaming device’s stock has seen growth of almost 150% this year, despite setbacks at the end of September, and will be looking to further grow on the back of a saturated streaming market.


Bet you didn’t know

Roku users stream 37 million hours of content per week, and that’s before we even see Disney Plus. I’m going to be watching Snow White alone at least 7 times on launch day.

#SlowGrowth

According to the IMF, the ongoing trade war between the U.S. and China could bring global economic growth to its slowest pace since the 2008 financial crisis. 


What does this mean?

A somber mood has descended upon the stock market as it seems that with every step forward in trade negotiations between the world's two great superpowers, there follow two steps backward. Earlier in the week, it was reported that the U.S. and China were cautiously optimistic about a trade deal being reached, but this has been overshadowed by new threats from China against the U.S.’s stance on Hong Kong. The International Monetary Fund (IMF) reported on Tuesday that by 2020, the threatened tariffs would reduce global economic output by 0.8%. That translates to a loss of about $700 billion — the equivalent of Switzerland’s economy disappearing. Should all proposed tariffs be scrapped, and a deal reached in Europe regarding Brexit, the economy should see a rebound. However, only time will tell if a deal can be reached before the proposed tariffs hit all of us.


Bet you didn’t know

Analysts estimate that Americans have paid an additional $34 billion in tariffs since February 2018.


#AndFinally

Google held its annual product event this week, where it showcased its latest innovations following a flurry of hardware announcements from competitors like Microsoft, Apple, and Amazon ahead of the holiday shopping season. After what was a largely positive event, Google parent Alphabet saw a 2% spike in its stock price. iPhone manufacturers Apple will be looking on with keen interest at Google’s new Pixel 4 smartphone range, which features updated cameras and displays, as well as brand new capabilities like facial recognition, powered by Google’s ‘Soli’ radar detection technology. As well as this there is a new Pixelbook tablet to rival Apple’s Airpod range – The Pixel Buds wireless headphones. Google said the products are meant to enable “ambient computing,” where connected gadgets are “always listening and helping the user”. Not creepy at all...


What does this mean?

Google has had a somewhat muted rivalry with the big hitters in the smartphone industry, Apple and Samsung, but it looks to have turned a corner with its latest range of products which will be looking to carve out some market share. 


Bet you didn’t know

Nobody quite knows why it is called ‘The Pixel’ and not ‘The Google Phone’, but Google claims that it did not think Google would be a good brand name for a smartphone.

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

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