Oh, it's on...
Hey Snackers,
Big financial news day for Animal Crossing residents: the Bank of Nook slashed interest rates on all savings accounts. To apologize for the inconvenience, the bank gifted disgruntled savers a floor mat shaped like a bell. Island residents are now turning to the "stalk market," a marketplace to trade and invest in... turnips.
Real-world markets surged on positive results from a Gilead trial of its possible COVID-19 treatment (Dr. Fauci highlighted remdesivir's significant effect in reducing recovery times). This overshadowed news that the US economy shrank 4.8% in the 1st quarter — the most dramatic GDP shrinkage since the '08 recession.
FYI, your Snacks Daily podcast co-hosts are meeting up with Mrs. Dow Jones on Zoom @ 4pm EST today — we're whipping up takeaways on the corona-conomy. Click here to get involved!
Grab the popcorn... Things are getting spicy between AMC Theaters and Comcast's Universal Pictures. Yesterday we talked about the unexpected triumph of the Trolls World Tour movie, and how it could change "movie math" forever:
Who knew Trolls could cause so much drama?... NBCUniversal CEO Jeff Shell was so thrilled with the digital success that he said Universal will release movies in both theaters and digital when theaters reopen. AMC, the world's largest movie theater chain, was not about it (at all) — So its CEO wrote an aggressive open letter:
Pre-emption is key... AMC struck fast and hard against normalization of the one thing that could destroy its biz forever: digital releases. Movie theaters aren't in the strongest position right now — but they can set expectations ASAP. Regal Cinemas also warned Universal to respect the theatrical window. Now Universal is backtracking, saying it "absolutely" believes in the theatrical experience and AMC misunderstood.
A double, wouble-whammy... Boeing's dealing with it. The plane-making giant posted its 2nd consecutive quarterly loss and burned $4.7B in 3 months. Last year, Boeing enjoyed positive cash flow — more $$$ was coming in than out. But to start 2020 it burned a $4.7B-sized hole. Investors were actually relieved — given Boeing's 2 major issues, they were expecting losses to be even worse:
Feeling the (cash) burn... Spending more than you make is not sustainable forever. The more cash you burn each month, the quicker your cash pile is going to run out.
Cash is the difference between surviving and flopping... At least in the corona-conomy. Boeing still has it better than most corona-hit companies: it's got $15.5B in cash and a $9.6B credit line (aka some runway to survive). Plus, as America's 1 big commercial plane manufacturer (and the 2nd largest on Earth), Boeing is too important for the US gov to let it sink. Small businesses won’t be so lucky if they run out of cash.
"Every day now looks like the weekend”... Dope quote straight out of Spotify corporate. Because of WFH, lockdown life has all but erased commuting habits — so our listening habits have changed too:
Same biz, different biz model... Spotify and Netflix are both content streamers with monthly subscriptions that cost roughly the same price. And they're both relieved that they haven't been hit by the corona-conomy. But unlike Netflix...
Spotify has no reason to play "sad vibez" playlist... Despite a few pandemic-related hiccups, Spotify's 1 key metric (paid subscribers) is looking good: paid subscribers grew 31%, which is better than last quarter's 29% growth — and that's what investors are looking at. Spotify's stock soared 12% on the earnings beats.
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Disclosure: Authors of this Snacks own shares of Amazon, Apple, Twitter, and Spotify
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