Netflix And Yahoo Release Sub-Par Earnings, Plus Uber Hits Two Billion Rides Served

“I don’t see a chance that [Twitter] is an independent company in 24 months” — Ross Levinsohn, former interim president of Yahoo. Twitter has been riding the struggle bus as of late and Levinsohn believes that there are several tech companies swimming in cash (think: Apple) that could snag it for real cheap. Savage.

MARKET SNAPSHOT

Big Picture

  • U.S. markets closed positive, reaching all-time highs again on Monday as positive earnings reports led investors to pull out of safe haven assets and pour back into stocks
  • Turkey’s stock market tumbled 7% on Monday after the failed coup on Friday scared many investors, along with Moody’s announcement that the country would need to have its investment grade reviewed

Market Movers

  • GameStop saw shares soar 8% after its CEO stated that sales were up 100% in stores that were also Pokémon Go “gyms”

CORPORATE PRIMER

Brexit Can’t Stop, Won’t Stop

…Japanese telecom giant SoftBank. Yesterday, SoftBank bought chip designer ARM for a mighty $32 billion. You might have never heard of ARM, but the company is a pretty big deal. London’s largest tech company is a chip provider for big names like Apple and Samsung. The deal came as quite the shock, as many believed Brexit would stifle M&A action with British firms. SoftBank CEO Masayoshi Son has made some questionable investments in the past (cough, cough Sprint), but SoftBank is hoping this one pays off.

Yahoo Lets Us Down

…Again. More bad news for Yahoo, as the struggling tech company released subpar earnings after the closing bell yesterday. CEO Marissa Mayer insists that the company is making strides, but many believe this will be her final earnings report. Mayer took the helm in 2012, tasked with transforming the company from a washed-up search engine to something much bigger. Clearly, that’s not going well. Don’t feel too bad for Mayer though: she is set to make $55 million if Yahoo gets sold, which is pretty likely. Not a bad gig.

Netflix Can Do No Wrong

…Or so we thought. While everyone’s favorite binge-enabler beat earnings expectations yesterday, the win was overshadowed by lower-than-expected subscriber numbers. Quick refresher: Netflix announced in April that it would “ungrandfather” old subscribers, meaning price hikes for many day-one Netflixers. “Ungrandfathering” has caused many existing subscribers to leave, while higher prices for new users has stumped subscription growth. Couple those two factors together and naturally investors were left unhappy, sending shares down 13% after-hours. Ouch.

Xbox is Swimsuit Ready

…And is ready to show off its sleek physique. Microsoft announced yesterday that the slimmer Xbox One S is set to launch on August 2. Microsoft’s new product is 40% smaller than the original Xbox One, has support for 4K/HDR video and comes with a revamped controller. Sounds pretty sweet, but many people will be waiting to upgrade their gaming systems until the fall when Project Scorpio, which will support virtual reality experiences, is released. What else is happening on August 2? The date coincides with Microsoft’s update for Windows 10. Better mark your calendars.

OTHER STORIES

ECONOMIC CALENDAR

  • Monday: Bank of America (+), IBM (+), Netflix (+), Yahoo (-) Earnings
  • Tuesday: Goldman Sachs, Johnson & Johnson, Microsoft Earnings; Housing Starts
  • Wednesday: eBay, Morgan Stanley, American Express Earnings
  • Thursday: AT&T, Chipotle, General Motors, Starbucks, Visa Earnings; Weekly Jobless Claims; Existing Home Sales
  • Friday: General Electric, American Airlines Earnings

ALL HAIL UBER

Think back to last Christmas. Not too long ago, right? Last December, Uber hit one billion rides after six years. Pretty impressive right? How about this, since then—in just six months—the ride-sharing company gave another billion, bringing its lifetime total to two billion rides. Let’s go for a spin:

  • Uber provided an average of 5.5 million rides a day, or 230,000 an hour in order to hit one billion rides in six months.
  • Who was the two-billionth rider? It was too close to call: there were actually 147 rides that all technically drove Uber past the historic mark. All of the riders and drivers will receive $450, since Uber is now in 450 cities. Sweet deal.
  • So where and when were these 147 trips? It all started at 4:16 AM GMT yesterday, and they occurred in 16 different countries across five continents.

INTERVIEW QUESTION OF THE DAY

Watermelon is 99% water. I have 100 pounds of watermelon. After a week in the sun, the shriveled watermelon had dried down to being 98% water. What is the total weight of the watermelon now?

(Answer)

BUSINESS TERM OF THE DAY

Tail Risk — A form of portfolio risk that arises when the possibility that an investment will move more than three standard deviations from the mean is greater than what is shown by a normal distribution. Tail risks include events that have a small probability of occurring and occur at the ends of a normal distribution curve. Think: 2008 housing bubble.

FOOD FOR THOUGHT

Japan Tobacco Inc. recently debuted its cigarettes in North and South Carolina at extremely cheap prices. The company sells a pack of cigarettes for $2.81 compared to Marlboro packs that run for $4.92. Its current U.S. market share is just .34%, but that number can only grow.