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It’s official – Netflix just became dead money

Apr 20, 2022

Good morning!

The markets are largely flat after yesterday’s run.

Here’s my playbook.

1 – Netflix is dead money

Netflix lost 200,000 subscribers when Wall Street - in its infinite wisdom and my voice dripping with sarcasm - expected a net gain. Now Netflix is going to be cracking down on password sharing, raising prices AND introducing advertising.

Obviously not a good recipe - shares are down 25% as I type.

Here’s my take with the fabulous Dagen McDowell sitting in for Maria Bartiromo earlier this morning. (Watch)

There’s already chatter … “who knew” cry those who got caught flatfooted. Short answer … we did, my friends.

2 – The next Nike

LULU is well known for yoga pants but the company’s a whole lot more than that. Management wants to double 2021 revenue in the next 5 years.

I think they’re going to do it.

The last time they did this kind of “objective setting” the company tripled digital revenue while also doubling menswear revenue 2 years ahead of schedule.

Anecdotally, I’m hearing a lot of chatter from Asia that LULU is gaining traction. Might be worth a look in the $350-$400 range. (Read)

3 – Not just Tesla

Tesla is going to take a 90,000 vehicle hit as a result of the three-week COVID shutdown in Shanghai, according to Credit Suisse. (Read)

I don’t think it’s going to be the only one to take a hit.

Though it won’t be as pronounced of a supply chain shock as 2020, Shanghai is still a production powerhouse, and I think we’ll see major disruptions in a couple of months over here.

Makes sense to have at least a few large-scale software and cloud services because they don’t deal with, you know, stuff.

You can find my choices in the One Bar Ahead™ model portfolio, which you can get by signing up here.

4 – If you thought Apple’s app store fees were bad

Meta – the company formerly known as Facebook – plans to take a 47.5% cut of all digital sales on the Horizon Worlds platform (their virtual universe). Not surprisingly, potential sellers are enraged. (Read)

This dwarfs Apple’s app store fees but nobody is raising a stink. Makes me wonder why and who’s protecting who inside the beltway. Betcha a few lobbyists know all too well.

Zucked again.

5 – The last mask mandate

Disney lifted Covid-related mask requirements after a federal judge in Florida binned a national mask mandate on public transportation. Could be good for park traffic now that legions of parents pushing sugar-addled kids want to make up for lost ground and visit. (Read)

Not sure it’ll move the needle stock-wise but it’s another step in the right direction.

Bottom Line

The way forward in today’s markets is filled with risk, is uncertain, is uncomfortable and more.

But …It’s still the way forward.

Get with the program or get left behind.

You got this – I promise!

Now let’s get out there and MAKE it a great day.



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