Tuesday Oct.05, 2021

🔌 Clean cable energy

With great cables come great responsibility [Westend61 via Getty Images]
With great cables come great responsibility [Westend61 via Getty Images]

Hey Snackers,

It’s the not-so-final frontier for the legendary Captain Kirk: “Star Trek” actor William Shatner plans to board Jeff Bezos’ Blue Origin tourist rocket launch next week. At age 90, he’ll become the oldest person to fly to space.

The tech-heavy Nasdaq fell more than 2% yesterday after a selloff in shares of Facebook and other big tech companies. The moves weighed on other major indices too. Meanwhile, President Biden warned that the US might default on its $28B debt ceiling for the first time.

Plug

The UK just plugged in the world’s longest undersea cable — but the transformation of the power grid is just beginning

Not your average extension cord… The world’s longest undersea electricity cable started sending electricity between the UK and Norway earlier this week. Shares of National Grid, the UK energy giant behind the 450-mile cable, which trades on the NYSE, rose nearly 2% yesterday. NG has big plans for its network:

  • Wind, water, wire: The new $1.9B North Sea Link cable will send British wind power to Norway and Norwegian hydropower back to the UK.
  • Underwater energy superhighway: NG already built “interconnectors” in the Netherlands, France, and Belgium — and it has plans to connect even more countries.
  • Low carbon: NG aims for 90% of its imported electricity to come from zero-carbon sources by 2030.

Energy sharing = energy caring… One issue with renewables is intermittency, which happens when solar panels stop generating electricity on cloudy days and wind turbines slow down in less gusty weather. But power grids need to keep the lights on in all kinds of weather. One solution: electricity sharing. National Grid’s new cable enables both the UK and Norway to borrow spare juice from each other when their own wind and water systems slow down.

Better grids are key to a renewable future… Shared energy grids are crucial now that 160+ countries have adopted renewable-energy targets and need backup when their sources wane. Businesses and orgs like the Renewable Energy Institute are working to connect cables across borders to make “supergrids.” Others, such as battery giants LG and Panasonic, are building mega-batteries that can store renewable energy, while carmakers Tesla, VW, and Nissan are working to transform their EVs into mini power plants. But countries still have a ways to go to reach targets: The US needs to triple its renewable investments by 2030 to hit its global climate goals.

Squid

Netflix’s K-thriller ‘Squid Game’ series goes viral, underscoring Netflix’s big opportunity overseas

"Hunger Games" meets "Black Mirror"… Netflix’s new South Korean fictional thriller “Squid Game” debuted 10 days ago and is already on track to becoming its biggest show ever (sorry, “Bridgerton”). The drama follows hundreds of cash-strapped contestants competing in children’s games for a big $$ prize (think red light, green light), but losing could mean death. The results are viral:

  • From the couch to the monitor: Fans are using apps like TikTok to recreate the series’ tasks (see the Dalogna candy challenge). Game makers on Roblox are also creating playable spinoffs.
  • 82M million subscribers are expected to tune in by the end of the month. It’s now the top show in 90 countries.

Netflix’s streaming passport… is full of stamps. Since its international debut in Canada a decade ago, ’Flix has added 180+ countries to its roster. America still accounts for about a quarter of Netflix’s 209M global paying memberships, but US growth is tapping out. To unlock new audiences, Netflix is looking overseas:

  • International reels: This year, Netflix plans to spend half its $17B original content spend on productions outside the US.
  • Hits: Popular shows like Germany’s “Barbarians,” the French series “Lupin,” and South Korea’s “Sweet Home” have boosted Netflix’s international subscribers 18%+ since 2018.

Going global means it might be time to “copy and paste”… Netflix’s US subscriber base is no longer growing — it actually dropped by 400K people this year — which means the streaming giant has two options to grow: Raise prices or win new customers somewhere else. With hits like “Squid Game,” Netflix is doubling down on high-quality international content to win over new subscribers overseas. The push seems to be working, but it does bring some new costs: Think pricey licensing fees and conflicts with broadband providers facing traffic spikes.

What else we’re Snackin’

  • Spill: Shares of Amplify Energy plunged 42% after the company revealed that its offshore pipeline caused a massive oil spill in Southern California over the weekend.
  • Out(r)age: Facebook’s stock slid nearly 5% yesterday over fallout from this weekend’s scandalous CBS whistleblower interview and an hours-long FB, Insta, and WhatsApp outage.
  • Taxiing: The global airline biz is expected to cut losses in 2022 by 78%, to $12B, a sign that airlines are (slowly) recovering from the pandemic.
  • Shifting: Volvo, which is owned by the Chinese auto giant Geely, reportedly plans to raise $2.9B in an IPO in Sweden to accelerate its EV plans.
  • Pharma: Walmart, CVS, and Walgreens are headed to federal court for their roles in the opioid epidemic, and could face up $15B in fines.
  • #FedUp: Sen. Elizabeth Warren asked the SEC to investigate whether senior Federal Reserve officials’ stock trades violated insider-trading rules.

Tuesday

  • Earnings expected from PepsiCo

Authors of this Snacks own shares of: Netflix

ID: 1861994

Get Your News

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Latest Stories

Casey Newton
Platformer
4h
Meta’s new AI paves the way for social networks where nothing is what it seems

Five ways of thinking about Llama 3, its latest large language model

Screenshot of Meta’s AI image generator, frog in a bathrobe
Power
Matt Phillips
7h

World out of balance: It costs the US 3¢ to make 1 penny

The cost of producing the US penny rose 13% in fiscal 2023 to 3.07 cents. Yes, that means that Uncle Sam loses more than two cents for every cent it produces. (And no, you can’t make it up on volume.)

For the record, that’s the 18th-straight year the penny’s face value has been below production costs, fueling calls for abolishing the lowest value denomination coin. Canada started to phase out the penny in 2013, joining Australia, Brazil, Finland, New Zealand, Norway, and Israel, according to Smithsonian Magazine.

3.07¢

Pop Quiz!

What’s the world’s busiest airport?
Don't be a sucka
Sponsored by
Go Deeper with Market Depth

Nasdaq TotalView powers the need-to-know data serious investors rely on.

Read more
Scuba Diving in the Wild Blue Yonder in French Polynesia
Business
Rani Molla
9h

Netflix is going to stop sharing subscriber numbers

After posting subscriber numbers that beat expectations today, Netflix says it’s no longer going to share those numbers starting in the first quarter of 2025. That’s a big deal since subscriber numbers have long been one of the main metrics that investors have looked at.

“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential,” its shareholders letter read. “But now we’re generating very substantial profit and free cash flow.” The company said that it will focus on revenue and operating margin as its main financial metrics, while it will look at time spent on the platform to gauge customer satisfaction.

Another way to read this? They’ve hit market saturation and just aren’t going to be growing that much anymore, and they thought they’d end on a good note. Going forward they’re focusing on how to get more money out of the customers they do have.

They’re doing so by cracking down on password sharing and charging for extra members. They’re also pushing people to ad tiers, which are more profitable than non-ad tiers.

“Scaling ads to become a more meaningful contributor to our business in ‘25 and beyond,” Netflix said.

Netflix’s ads membership grew another 65% in Q1 over the previous one, after rising 70% the quarter before, and 40% of signups in ad markets continue to be for those ad plans.

9h

Frozen Dead Guys

The audacious and expensive world of cryogenics

Jamie Wilde
US-NORWAY-TRADITION-DEATH-FESTIVAL-OFFBEAT
Jack Raines
Adios, ERP
12h
By one measure, stocks haven't looked this bad in decades

Earnings are important, but they aren't everything in the stock market.

Dow Jones Industrials Average Closes Day 477 Points Up
Tech
Rani Molla
12h

Meta’s not telling where it got its AI training data

Today Meta unleashed its ChatGPT competitor, Meta AI, across its apps and as a standalone. The company boasts that it is running on its latest, greatest AI model, Llama 3, which was trained on “data of the highest quality”! A dataset seven times larger than Llama2! And includes 4 times more code!

What is that training data? There the company is less loquacious.

Meta said the 15 trillion tokens on which its trained came from “publicly available sources.” Which sources? Meta told The Verge’s Alex Heath that it didn’t include Meta user data, but didn’t give much more in the way of specifics.

It did mention that it includes AI-generated data, or synthetic data: “we used Llama 2 to generate the training data for the text-quality classifiers that are powering Llama 3.” There are plenty of known issues with synthetic or AI-created data, foremost of which is that it can exacerbate existing issues with AI, because it’s liable to spit out a more concentrated version of any garbage it is ingesting.

AI companies are turning to such data because there’s not enough good, public data on the entire internet to train their increasingly greedy AI models. (Meta had reportedly floated buying a publisher like Simon & Schuster to satisfy its insatiable data needs.)

Meta, of course, isn’t the only company that’s tight-lipped about where its AI data is coming from. In a now infamous interview with WSJ’s Johanna Stern, OpenAI’s chief technology officer Mira Murati was unable to answer questions about what Sora, OpenAI’s video generating app, was trained on. YouTube? Facebook? Instagram — she said she wasn’t sure.

Meta’s battle with ChatGPT begins now

Meta’s battle with ChatGPT begins now

What is that training data? There the company is less loquacious.

Meta said the 15 trillion tokens on which its trained came from “publicly available sources.” Which sources? Meta told The Verge’s Alex Heath that it didn’t include Meta user data, but didn’t give much more in the way of specifics.

It did mention that it includes AI-generated data, or synthetic data: “we used Llama 2 to generate the training data for the text-quality classifiers that are powering Llama 3.” There are plenty of known issues with synthetic or AI-created data, foremost of which is that it can exacerbate existing issues with AI, because it’s liable to spit out a more concentrated version of any garbage it is ingesting.

AI companies are turning to such data because there’s not enough good, public data on the entire internet to train their increasingly greedy AI models. (Meta had reportedly floated buying a publisher like Simon & Schuster to satisfy its insatiable data needs.)

Meta, of course, isn’t the only company that’s tight-lipped about where its AI data is coming from. In a now infamous interview with WSJ’s Johanna Stern, OpenAI’s chief technology officer Mira Murati was unable to answer questions about what Sora, OpenAI’s video generating app, was trained on. YouTube? Facebook? Instagram — she said she wasn’t sure.

Matt Phillips
13h

Today’s earnings: Who’s making money edition

Here are some some notable numbers out this morning, as earnings season gathers steam. Thursday’s main event will be Netflix after the close of trading. (Keep an eye on its advertising business.) But until then...

7.13%

The 30-year fixed rate mortgage is back above 7%, according to weekly numbers from the Mortgage Bankers Association, the highest level in four months. High borrowing costs are creating havoc for would-be buyers, as affordability lingers at the low levels not seen consistently since the late 1980s.

Your inbox is ready

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Business
Rani Molla
17h

Amazon’s spy ops on rivals: shell companies, printed docs, and a fake Japanese streetwear brand

Some companies check out rivals’ websites, stores and public filings to stay abreast of the competition. Amazon made its own fake shell company and brands, transacted hundreds of thousands of dollars per year undercover on competitors’ platforms, and kept its intel operation a secret for nearly a decade even from others at Amazon, according to a fascinating investigation by the Wall Street Journal.

Working as a seller called Big River, a secret group of Amazon employees gained access to rival platforms, including Walmart, FedEx, and Alibaba. They used Big River email addresses and went to seller conferences as Big River employees. They even stayed hidden within Amazon itself. These employees would take screenshots of competitors’ systems that they would then show others at Amazon in person to avoid an email paper trail.

Perhaps most strange of all, the company created a fake Japanese streetwear brand called “Not So Ape” (clearly a play on A Bathing Ape) and continues to sell products from the brand on a Shopify store, presumably as an attempt to learn the inner workings of the shopping platform. Of course, copying is old hat for Amazon.

In meetings where they’d use this clandestine information to inform Amazon’s own business practices, the group resorted to literal paper. “[T]he team avoided distributing presentations electronically to Amazon executives. Instead, they printed the presentations and numbered the documents. Executives could look at the reports and take notes, but at the end of the meeting, team members collected the papers to ensure that they had all copies."

Exclusive | Inside Amazon’s Secret Operation to Gather Intel on Rivals

Exclusive | Inside Amazon’s Secret Operation to Gather Intel on Rivals

Working as a seller called Big River, a secret group of Amazon employees gained access to rival platforms, including Walmart, FedEx, and Alibaba. They used Big River email addresses and went to seller conferences as Big River employees. They even stayed hidden within Amazon itself. These employees would take screenshots of competitors’ systems that they would then show others at Amazon in person to avoid an email paper trail.

Perhaps most strange of all, the company created a fake Japanese streetwear brand called “Not So Ape” (clearly a play on A Bathing Ape) and continues to sell products from the brand on a Shopify store, presumably as an attempt to learn the inner workings of the shopping platform. Of course, copying is old hat for Amazon.

In meetings where they’d use this clandestine information to inform Amazon’s own business practices, the group resorted to literal paper. “[T]he team avoided distributing presentations electronically to Amazon executives. Instead, they printed the presentations and numbered the documents. Executives could look at the reports and take notes, but at the end of the meeting, team members collected the papers to ensure that they had all copies."

World
April 18th
19h
What’s happening
21h

Tesla pushes for a massive Musk pay package as the EV maker rides the struggle sedan

Jamie Wilde
Read
21h

Big Banks Earnings Wrap: Investment banking rebounds, but interest rates are a double-edged sword

Nia Warfield
Read
Tech
Time’s ticking
4/17/24
Big tech vs. big government
Jack Raines
More taxes, eh?
4/17/24
Capital gains taxes won’t fix Canada’s terrible housing market

Canada's proposed solution to its housing crisis may exacerbate the problem instead.

SWITZERLAND-DIPLOMACY-ECONOMY-SUMMIT-DAVOS
Crypto
Jack Morse
4/17/24

Worldcoin pivots to the blockchain… with a 'humans only' discount

Worldcoin, the “proof of personhood” crypto project launched by OpenAI’s Sam Altman, said it plans to launch its own ethereum layer-2 (L2) blockchain dubbed World Chain. The pitch: a blockchain where it’s both easier and cheaper for people to transact than bots.

Worldcoin has made waves for its iris-scanning metallic orb that promises a future where people can mathematically prove they’re real humans and not AI bots.

But it’s run into trouble: the orbs have been banned across Europe and Africa, and the associated WLD crypto token has plunged 50% over the past month.

For project insiders, who reportedly received a token allocation of 25% of supply, that could equal significant losses. 

Which is what may make World Chain attractive. Crypto exchange Coinbase launched its own L2, Base, last year. Base has since seen rapid user growth — activity that’s generated the exchange millions of dollars in weekly fees. 

Worldcoin could benefit from similar revenue if its L2 is adopted around the world.

Worldcoin, Sam Altman's Crypto Project, Is Building a Layer-2 Chain

Worldcoin, Sam Altman's Crypto Project, Is Building a Layer-2 Chain

But it’s run into trouble: the orbs have been banned across Europe and Africa, and the associated WLD crypto token has plunged 50% over the past month.

For project insiders, who reportedly received a token allocation of 25% of supply, that could equal significant losses. 

Which is what may make World Chain attractive. Crypto exchange Coinbase launched its own L2, Base, last year. Base has since seen rapid user growth — activity that’s generated the exchange millions of dollars in weekly fees. 

Worldcoin could benefit from similar revenue if its L2 is adopted around the world.

Rani Molla
Ad-ing up
4/17/24
Turns out Netflix makes more money if it just acts like regular TV

Streaming companies will let you watch ad-free, but it will cost you.

German Shepherd Dog on TV Screen
Markets
Earnings
4/17/24
Companies report things
Business
Nia Warfield
4/17/24

Smooth sailing? Not for superyachts

Sales of the luxury boats sank 17% last year. Meanwhile, Super-SUPER yachts (over 650 feet long) took the biggest sales dip, falling around 40%. Part of the problem: a pandemic-era backlog has led to a three- to four-year waitlist for new yacht orders. Meanwhile Russian oligarchs — former MVP customers — are largely out of the boat-buying business due to sanctions.

Read more

Superyacht sales plunge as wait times rise, Russian oligarchs drop out of the market

Superyachts
Dr Martens shares have been stomped

American sales of Docs have dropped

Tom Jones, David Crowther4/17/24