Friday's Headlines: YouTube Scores a Touchdown in the Streaming Wars

Friday's Headlines: YouTube Scores a Touchdown in the Streaming Wars

Happy Holidays from all of us here at MyWallSt. With Christmas time upon us, we’ll be taking a break from posting the Market Headlines next week. They’ll return on Tuesday, January 3, 2023. In the meantime, keep your eye on the MyWallSt app for our 2022 Roundup all across the coming week.
 

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

IMAX (IMAX) +4.0%

Calavo Growers (CVGW) +3.9%

FedEx (FDX) +3.4%

Evolent Health (EVH) +1.4%

Ulta Beauty (ULTA) +1.1%

Moving Down ⬇️

2U (TWOU) -10.3%

Tesla, Inc. (TSLA) -8.9%

Atlassian (TEAM) -8.9%

Teladoc (TDOC) -8.5%

Redfin (RDFN) -7.0%
 

YouTube Scores a Touchdown in the Streaming Wars 🏈

After days of speculation, the National Football League (NFL) announced yesterday that the rights to its ‘Sunday Ticket’ streaming package have been awarded to none other than YouTube. The Google-owned video platform will pay approximately $2 billion for the rights in a seven-year deal. However, this is not the first time that the NFL has engaged with one of the less traditional broadcasters, with the rights to its ‘Thursday Night Football’ offering currently with Amazon.

Commissioner of the NFL, Roger Goodell, spoke strongly about his convictions for the future of the partnership:

"For a number of years we have been focused on increased digital distribution of our games and this partnership is yet another example of us looking towards the future and building the next generation of NFL fans."

The ‘Sunday Ticket’ package will be available to subscribers of YouTube TV, or as a standalone PPV option as part of YouTube’s Primetime Channels. This signifies Google’s intent to further monetize and legitimize YouTube as a true streaming behemoth.

This also marks the latest in an arms race between some of the largest names in streaming and tech, as Google, Apple, and Amazon all compete to situate themselves as the place to be for live sport over the next ten years. That’s not to even mention the traditional broadcasting companies, who are unlikely to simply roll over and accept this new wave of competition. There’s also the impact of a little old streaming company from California called Netflix to be accounted for.

2023 looks set to be a very interesting year. Watch this space.
 

More Chaos For AMC 🚨

Shares in AMC Entertainment took a sharp turn for the worse yesterday and are continuing to slide premarket today. The beleaguered meme stock announced a new capital raise of $110 million, while also proposing a reverse stock split — although this would require shareholder approval to be implemented.

The market duly responded to the news, with AMC plummeting to the point where trading had to be briefly paused. It finished the day down 7%, having made a slight recovery from double-digit losses earlier in the day. Premarket, AMC has already slid a further 7% at time of writing.

AMC wants to raise equity through its controversial APE units, a preferred share named after the company’s most ardent followers. CEO Adam Aron spoke about these APE units in a news release yesterday:

“Clearly, the existence of APEs has been achieving exactly their intended purposes. They have let AMC raise much-welcomed cash, reduce debt and in so doing deleverage our balance sheet and allow us to explore possible activity.”

AMC is currently trying to reduce its debt and return to profitability, but that particular end goal appears to be a long way off as of yet. The theatre chain is currently down over 81% for the year and almost 92% off all-time highs witnessed in mid-2021.
 

TuSimple Teeters Close to the Edge 😰

TuSimple, a self-driving trucking company that emerged during the 2020 autonomous tech boom, announced on Wednesday it will lay off 25% of its workforce as part of a broad restructuring plan. The news is just the latest of many blows to the company’s stock, coming after the announcement that TuSimple and Navistar will end their deal to co-develop purpose-built autonomous semi-trucks.

On the layoffs, TuSimple CEO Cheng Lu stated:

“While I deeply regret the impact this has on those affected, I believe it is a necessary step as TuSimple continues down our path to commercialization. This is part of our overall strategy to prioritize investments that bring the most value to shareholders.”

It’s been quite a year for TuSimple which started its public life as a darling of Wall Street, reaching a valuation of more than $8 billion, and boasting investors like Volkswagen and UPS. However, the company has since been plagued by many controversies, such as:

  • Founding CEO Xiaodi Hou being ousted after an internal investigation uncovered employees were sharing confidential information with Hydron, a China-backed hydrogen-powered trucking firm.
  • It suffered a humiliating PR debacle after one of its autonomous trucks veered across a 10-lane highway and slammed into a concrete barrier in April.
  • And finally, it’s under investigation by the Federal Bureau of Investigation, U.S. Securities and Exchange Commission, and Committee on Foreign Investment in the United States on suspicions of illicit technology transfer.

On top of all of these issues, TuSimple has been struggling to make enough revenue to cover its cash burn. If TuSimple can recover, it would be quite a comeback.

TuSimple’s stock is down more than 96% since its IPO and is down more than 20% this week alone.