Friday's Headlines: Netflix Competitors Stunt Subscriber Growth
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Trip.com Group (TCOM) +7.4%
Baozun (BZUN) +3.0%
MercadoLibre (MELI) +2.9%
Moving Down ⬇️
Peloton Interactive (PTON) -23.9%
TrueCar (TRUE) -10.4%
Nautilus (NLS) -8.3%
GoPro (GPRO) -5.4%
Nordstrom (JWN) -4.2%
1. Netflix (NFLX) shares are down more than 20% in after-hours trading based on weaker guidance after announcing Q4 results last night. Revenue grew to $7.7 billion from $6.6 billion in the year prior and net income increased 7% year-over-year (YoY). The company fell short on subscriber growth which came in at 8.19 million v.s. 8.5 million which was previously forecast. Netflix also noted that it expects a loss of $1 billion due to currency conversion attributable to the fact 60% of its business is outside the U.S., and the U.S. dollar has appreciated in value. The company acknowledged growing competition in the space but added “we continue to grow in every country and region in which these new streaming alternatives have launched”. Read the full report here.
2. Peloton (PTON) shares were sent spiraling downwards in yesterday’s trading following reports that the company was halting production due to a reduction in demand and rising inventory levels. CEO John Foley has spoken out about claims, dismissing the rumors as “false” and that the company is “resetting our production levels for sustainable growth”, which saw shares recover in the after-hours. While there are several concerns weighing on the company at the moment, Peloton is acknowledging the issues, actively engaging in restructuring and implementing cost-cutting measures as well as consulting with the strategic management firm, McKinsey. You can read the full story here, and we'll have a further update on the Peloton situation in the Weekly Movers later today.
3. MercadoLibre (MELI) has acquired partial ownership of a cryptocurrency brokerage based in Brazil, 2TM Participacoes, as well as invested in U.S. based blockchain technology company, Paxos. Brazilian customers currently have the ability to buy and sell cryptocurrencies, an initiative that started in December 2021, but the company intends to roll out the service to more countries across Latin America. MercadoLibre expressed interest in the space noting the “opportunities around this market as it evolves” and its aim to be a “core participant in this disruption” which align with the company’s vision of democratized finance for all. Read the full press release here.
Some more earnings from last night:
Silicon Valley Bank (SIVB) reported solid earnings last night based on strong loan and private market growth, as well as a 10% increase in client funds under management, which now stands at $391 billion. Consolidated net income came in at $371 million and the company gained 1,700 net new clients in Q4 2021, exhibiting a 10% compound annual growth rate for the last five years.
Get this week’s full earnings calendar here.