Tuesday's Headlines: Disney and Dish Avoid Further Backlash

Tuesday's Headlines: Disney and Dish Avoid Further Backlash

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

StoneCo (STNE) +10.7%

Peloton Interactive (PTON) +7.8%

Huazhu Hotels Group (HTHT) +6.8%

MercadoLibre (MELI) +6.6%

Under Armour (UAA) +5.7%

Moving Down ⬇️

Tesla, Inc. (TSLA) -8.6%

Baozun (BZUN) -4.0%

Twitter (TWTR) -3.0%

ShotSpotter (SSTI) -2.6%

Sea Limited (SE) -1.4%
 

Here are the stories that you need to know ahead of market-open today, Tuesday the 4th of October.
 

Dish and Disney Reach Tentative Agreement on New Contract 📄

Shares of both Dish Networks and The Walt Disney Company (DIS) are up in pre-market trading after the companies announced that they have reached a tentative agreement on a new contract.

Dish customers were left furious over the weekend when the company suddenly dropped Disney channels from its service. Those channels included ABC and ESPN, both of which carry collegiate and professional American football.

Dish, which has over 10 million subscribers in the United States, has argued against the high fees that Disney charges for its channels. Live sports has been one of the few segments that has kept cable subscribers from cutting the cord and moving exclusively to over-the-top streaming services.

“Disney has exploited its market position to increase fees without regard for the public viewing experience,” said Brian Neylon, executive vice president and group president, DISH TV. “Clearly, Disney insists on prioritizing greed above American viewers, especially sports fans and families with children who watch their content.”

A “handshake agreement” was reached yesterday, resuming services in time for ESPN’s Monday Night Football. The terms of the agreement were not disclosed and Disney said it would continue to work on a finalized contract in the coming days.

“We have reached a handshake agreement with DISH/Sling TV, which properly reflects fair market value and terms for The Walt Disney Company’s unparalleled content,” Disney said in a statement. “As a result, we are pleased to restore our portfolio of networks on a temporary basis while both parties work to finalize a new deal.”
 

Rivian Jumps Premarket on Growing Production 🚙

Electric vehicle (EV) manufacturer Rivian announced yesterday that it had hit its highest quarterly total to date of produced vehicles. The company manufactured over 7,000 vehicles in Q3 2022, and also doubled down on its lofty target of making 25,000 vehicles for the calendar year. Investors have responded well to the good news, with Rivian’s stock now trending up over 7% premarket and rising.

This news comes at a fantastic time for the firm, with chief rival Tesla (TSLA) having failed to meet its quarterly delivery quotas just a day prior. While this certainly isn’t going to shift the balance of power in the EV world — Tesla still has a market cap almost 26 times larger than Rivian’s and produces almost 50 times more vehicles after all — it does show that there are other horses in the proverbial race, and they’re finding some success.

However, it’s probably worth noting that Rivian did slash its production estimates for the entire year in half back in March, citing supply chain issues and internal problems with its production process as the key reasons behind the move. This in turn led to a significant stock sell-off.

Rivian has had a poor year on the market thus far, with its stock currently down almost 69% year-to-date. It sits over 75% off all-time highs witnessed in the wake of its November 2021 IPO, as investors have turned away from growth and tech stocks in search of less volatile businesses. Yesterday’s production figures mark a solid win for a company that was desperately in need of one. Should it continue to hit its forecasted marks, this could very well be the catalyst that reignites some growth for Rivian once more.
 

Freshpet seeks a buyer under activist guidance 🐶

Shares in Freshpet rose more than 9% on Monday after Barron’s reported that the pet-food maker was looking for a buyer. The news comes after a string of shake-ups and challenges for the business that includes activist investor Jana Partners scooping up a 10% stake, the departure of CFO Heather Pomerantz, and the stock falling more than 70% from all-time highs.

Freshpet specializes in refrigerated, high-end pet food that blends real ingredients including meat, vegetables, and fruits. During the pandemic, the stock became a favorite of investors wanting to grab a bite of the ever-expanding pet market.

In August, Freshpet reported a disappointing Q2 that saw revenue rise more than 34% but margins compress. This prompted a widening net loss that caused the stock to free fall, Jana Partners appeared on the scene a few weeks later.

Since acquiring its stake, Jana has pushed to add six members to Freshpet’s board, including basketball star Dwyane Wade. Initially, it looked like Jana would pressure management to temper its expansion plans and sort out supply chain issues to maximize shareholder value, but now, it would appear, an acquisition is more likely.

While the pet food industry has been disrupted by Freshpet, many of its issues would be solved by joining a larger player with established manufacturing and distribution channels.

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