Tuesday's Headlines: Why did Roku fall 15%?
1. Shares of Roku fell more than 15% yesterday after the company received a downgrading from Morgan Stanley. In a note yesterday, the analyst firm warned of “exuberance over all things streaming” and said that revenue and profit growth could slow for the company next year as competitors arrive to the market. Roku stock had grown roughly 420% this year before yesterday's sell-off, buoyed by the ever-expanding selection of streaming services from companies like Disney and Apple. Read more about this here.
2. The other big loser from yesterday was The Trade Desk, whose stock fell close to 14% in sympathy with Roku's drop. The Trade Desk's advertising business is tied to the same growth in connected streaming devices as Roku, which means that warnings about its future growth trajectory would adversely affect The Trade Desk too. The company has been on a strong run so far this year, up close to 130% before yesterday's news. Read more about this here.
3. Finally, Star Wars fans might be disappointed with the presents they find under the Christmas tree this year as Hasbro confirmed that it will not start selling Baby Yoda toys until 2020. The breakout star from Disney+'s new 'The Mandalorian' series has become a viral sensation over the past few weeks, but the production of toys related to the character was delayed until the show was released in November for fear that it would be leaked early. Hasbro can probably still expect the series to big a big revenue booster, however, with the company owning the right to produce Star Wars toys through next year. More on this here.