Verizon Mobile Posted Its First Ever Mobile Subscriber Loss, Plus Spotify Presses Toward an IPO
QUOTE OF THE DAY
“I have unicorn crap all in my hair and on my nose. I have never been so stressed out in my entire life.”—Starbucks barista Braden Burson on the special-edition Frappuccino that took social media—and Starbucks locations—by storm.
- Stocks on all U.S. indices rose Thursday, with the Nasdaq closing at a record high, thanks to solid earnings reports and economic data
- U.S. treasury yields continued their uptrend despite terrorism in France ahead of a contentious presidential election beginning Sunday
Can You Hear Me Now?
In the first six weeks of 2017, Verizon lost almost 398,000 users. It managed to gain some of them back by reintroducing unlimited data plans. But when all was said and done, the company lost 289,000 customers last quarter.
Consumer tastes are changing
And Verizon is trying to keep up. The 113.9 million customer carrier has long argued that people will pony up for premium service on its network—ranked best in 48 of 50 states—and has spent billions updating it in recent years.
But when competitors like Sprint
(+0.06%) and T-Mobile
(-0.49%) caught up, and began offering cheaper plans with more data, customers followed their wallets.
T-Mobile ended two-year contracts four years ago, when Sprint and AT&T also started focusing on unlimited plans. Verizon was the last provider to shift—and its new plan is more expensive than all except AT&T at $80 per month for one line. Competition means lower prices, and we’ll never complain about unlimited data for Netflix binging.
Tesla Puts On the Brakes
(+0.99%) is recalling 53,000 Model S and X vehicles due to a possible parking brake malfunction. There’s no safety issue, Tesla claims, but a third-party gear in the brake could theoretically cause it to be immovable. Luckily, it only affects 5% of the cars recalled.
Elon Musk’s electric vehicle company made news last week when it passed automotive giants GM
(+0.92%) and Ford
(+2.50%) in market value thanks to the upcoming Model 3. You win some, you lose some.
Spotify Presses Toward an IPO
Swedish streaming service Spotify has reached a deal with Merlin, a digital rights agency for indie music, which controls about 12% of the world’s music. This comes just weeks after Spotify reached a similar agreement with Universal, the largest record label in the world. It’s another step on Spotify’s mission to go public—and to run the digital music world.
Now, Spotify only has two of the three major labels left to renegotiate deals with—EMI and Sony—before a public offering would be likely. However, this IPO won’t be like others: Spotify is reportedly looking for a direct offering, in which existing stockholders could list and trade their shares, but the company would not offer any new stock or raise capital.
Instagram Touches Up
Popular bot service Instagress has shut down as part of Instagram’s pledge to clean up its platform. The company previously used “bot farms” to fabricate followers and likes for users desperate enough to pay money to inflate their numbers (hey, we’re not judging).
Sketchy activities abound on Instagram, and the Facebook-owned
(+1.08%) app isn’t the only one taking note. Yesterday the Federal Trade Commission, which regulates advertising, sent letters to over 90 prominent Instagram users warning them that they must clearly disclose when they’re advertising a product or company in a post. Whether your photo gets 100 likes or 1 million, Instagram (and the FTC) wants to make sure you’re doing it legitimately and transparently.
What Else Is Happening…
- Subway is the latest victim in the fast casual wars, closing 359 restaurants last year
(+4.74)wants to take on Square
(+2.97%)with its new card reader
- Buffalo Wild Wings
(+5.99%)is under pressure from an activist investor to get its act together
(+2.05%)wants to replace your debit PIN with a fingerprint reader
- Monday: United Airlines Earnings (+); Housing Market Index (-)
- Tuesday: Bank of America (+), Goldman Sachs (-), IBM (+/-), Johnson & Johnson (-), Netflix (+/-), Yahoo (+) Earnings
- Wednesday: American Express (+), BlackRock (+), CSX (+), eBay (+), Morgan Stanley (+), Qualcomm Earnings (+); Fed Beige Book (+)
- Thursday: Verizon (-), Visa (+) Earnings; Weekly Jobless Claims (+)
- Friday: GE, Morningstar Earnings; Existing Home Sales
Home, Sweet Home
As the flowers bloom and graduation nears, many grads will grab their diplomas and set out to join the rest of their cohort…at home…on the couch. New Census Bureau numbers show nearly a third of all U.S. 18-to 34-year-olds live with their parents. But wait, there’s more:
- The demographic is half white and majority male. Most don’t have a high school diploma. And it’s not a short stint: 9 of the 10 young people who were living with their parents a year ago still haven’t moved out.
- Millennials are getting married later, and maybe that’s because they’re still living with their parents. Compared to their parents’ generation, more 18-to-34-year-olds live with a parent than with a spouse.
- Here’s the kicker: among 25-to-34-year-olds living at home, one in four is neither working nor enrolled in any kind of school. While that percentage only accounts for 2.2 million people, the trend is striking.
Question of the Day
You have two six-sided dice. How can you label the faces in such a way that the probability of any number from 1 to 12 is the same?