Tuesday's headlines: Netflix Scoops Up Another Gaming Studio
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Wynn Resorts (WYNN) +9.6%
Redfin (RDFN) +5.3%
DraftKings (DKNG) +4.5%
Lemonade (LMND) +3.7%
Moving Down ⬇️
Airbnb (ABNB) -7.2%
Meta (META) -6.1%
IMAX (IMAX) -5.9%
Chegg (CHGG) -5.4%
Wynn Shares Jump on Fertitta Stake 🏨
Shares of Wynn Resorts jumped nearly 10% on Monday after it was revealed that Tilman Fertitta has taken a stake in the company. Fertitta, the billionaire owner of the Houston Rockets, has amassed 6.9 million shares in the casino operator, implying a 6.1% ownership.
That’s according to a 13G form filed with the Securities and Exchange Commission, which must be submitted when one's ownership in a publicly traded company exceeds 5%. That makes Fertitta the second largest shareholder in Wynn, after co-founder Elaine Wynn, who owns approximately 8.4%.
In June, Fertitta acquired 6.2 acres of land on the Las Vegas strip and announced plans to build a 43-story hotel resort. Fertitta’s hospitality empire already includes Golden Nugget casinos in Nevada, Louisiana, Mississippi, and New Jersey.
The move comes at a time when Wynn and other operators have seen their stock price hammered by consistent disruptions to their Chinese locations. The country’s zero-COVID policy has severely hampered gamblling activity in Macau, now one of the world’s most profitable gaming hubs. Frequent outbreaks of the virus have caused the authorities in Macau to close casinos and restrict travel between Macau and mainland China.
It is hoped that a new electronic visa system that is set to be launched shortly will facilitate the reopening of Macau to Chinese tour groups sometime this month.
Shares of Wynn are currently down 25% year-to-date and down over 50% since before January 2020.
Chegg Falls After Data Protection Scandal 📚
Monday was a bad day for Chegg after the Federal Trade Commission announced it was taking action against the ed-tech firm for its lax security practices.
According to the FTC, Chegg has experienced four security breaches since 2017, exposing the data of its 40 million customers and the entirety of its workforce. The leaked information includes Social Security numbers, email addresses, passwords, and even content like religion, sexual orientation, and parents' income ranges. This data is now for sale on the online black market.
Officials at the FTC uncovered a whole host of security faux pas, including allowing employees and contractors to use a single sign-in, not requiring multi-factor authentication, and failing to scan for threats. Worse still, apparently, Chegg didn’t have a written security policy until January 2021 and did not provide security training to staff despite suffering three recent phishing attacks.
The FTC has proposed a number of corrective measures which Chegg has agreed to adopt. This will see the textbook provider limit the scope of its data collection and build a comprehensive security program that includes encryption.
In response to the FTC’s report, Chegg released a statement calling data privacy its “top priority”.
Chegg’s stock has fallen more than 5% on the news.
Netflix Scoops Up Another Gaming Studio 🎮
Netflix’s gaming empire just got a little bit bigger. On Monday, Spry Fox, the creator of “Triple Town,” “Alphabear” and “Cozy Grove”, announced it had been acquired by the streaming giant. This marks the sixth independent studio to be scooped up by Netflix, each dedicated to mobile gaming. Interestingly, these studios span a number of genres which shows even in gaming, Netflix hopes to have a little something for everyone. Spry Fox is known for its non-violent massive multiplayer online games, similar to “Animal Crossing”.
Amir Rahimi, vice president of game studios at Netflix, stated the acquisition will help Netflix accelerate its game development.
“Our games journey has only just begun, but I’m proud of the foundational work we’ve been doing to build out our in-house creative capacity so that we can deliver the best possible games experience — including no ads and no in-app purchases — to our members as part of their membership”, Rahimi said in blogpost.
It would appear, Netflix is jumping into gaming with both feet. A few weeks ago, Netflix VP of gaming Mike Verdu announced the streamer’s new gaming studio in Southern California. This is on top of the studio it opened earlier in the year in Helsinki, Finland.
Netflix is hoping gaming can become a value add-on for subscribers and a way to keep them engaged with the key titles after they’ve already watched them. To this end, the streamer has 55 games in the pipeline many of which are based on its key franchises.