At $30M an ep, we’d be smiling too (Bryan Bedder/Getty Images for Netflix)
Not even the business luminaries at Davos were spared from inflation. On the menu at the World Economic Forum, which just wrapped up in Switzerland: a $51 burrito and a $22 side of fries.
Stocks rose for a fifth straight day on the back of retail earnings that weren’t as dire as expected, putting the S&P 500 and Nasdaq on track to end their seven-week losing streaks.
Dialing it up to Eleven… Grab some popcorn: the fourth season of one of Netflix’s OG hits, “Stranger Things,” drops today. But the premiere comes at a strange time for the streamer, which is trying to reverse its first subscriber loss in more than a decade.
It’s been 36 weeks since “Squid Game”… and Netflix is desperate for another huge hit. It’s lost nearly 70% of its market cap this year. To reverse its stock slide, Netflix has started cutting costs by laying off staff and telling employees to curb spending — and even starting work on a free ad-supported tier. But there’s one place Netflix still isn’t skimping: content.
Cutting costs comes with a cost… Splurging on content is in Netflix’s DNA: it became the top streamer by bankrolling hits like “The Crown” ($520M and counting). But now it’s in a predicament: it needs to cut costs to compete with faster-growing rivals like HBO and Apple — and it can’t afford to turn off its content firehose. Doubling down on existing shows could cost Netflix to miss out on its next surprise hit. “Squid Game,” Netflix’s most-watched show ever, cost 1/12th of one episode of “Stranger Things.”
Mega-deal alert… Yesterday, chipmaker Broadcom confirmed plans to buy software developer VMware for $61B — what would be the third-largest tech deal in history and one of the biggest overall deals of the year. Refresher: VMware was one of the pioneers of early cloud-computing tech for big biz (aka: the $672B enterprise market), and was spun off last year by its former owner, Dell. What’s on the table:
Broadcom’s bag of chips… has a lot of variety. From WiFi and Bluetooth to powering appliances, Broadcom’s semiconductors play a crucial component in connecting most of your everyday gadgets. But in the past year the global chip shortage has forced the company to limit how many orders it can fill, sacrificing sales. Enterprise software is an attractive way for B’com to diversify because it’s a strong market filled with deep-pocketed customers that provide recurring revenue streams.
Nothing’s done till it’s done… Broadcom tried to buy rival chipmaker Qualcomm in 2018 but was blocked by the Trump administration on antitrust and national-security grounds. Even though VMware isn’t a direct rival, the Biden administration has been skeptical of big corporate tie-ups: it recently sued to block a different chip merger between Nvidia and Arm, which led to the deal’s collapse.
Authors of this Snacks own shares of Amazon, Apple, Canopy Growth, Google, Microsoft, Netflix, and Twitter