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Good Morning!
Happy Wednesday! Here’s what we’re breaking down in this issue:
👉 Netflix earnings are in
👉 Klarna offers new service
👉 FAA puts boots on the ground
Let’s get into it!
EARNINGS: Netflix
In its strongest final quarter ever, the streaming leader added 13.1 million subscribers, a significant increase from the previous year's 7.7 million, signaling the success of its crackdown on password sharing. Netflix is now focusing on expanding its content offerings and advertising business, ending the year with 260.28 million subscribers, a 13% year-over-year increase.
Source: Netflix
Revenue rose to $8.8 billion in the fourth quarter, a 12.5% increase from the previous year, though net profit slightly missed forecasts. The company's operating margin improved notably to 16.9%. The introduction of its $6.99 ad-supported tier in the U.S. has started to pick up, now representing a significant portion of new sign-ups.
Despite recent price hikes for some plans, Netflix remains the dominant player in the streaming market, even as competitors like Warner Bros. Discovery and Disney begin licensing their content to Netflix, marking a strategic shift in the streaming landscape.
Earnings:
Earnings: $2.11 per share vs. $2.22 per share
Revenue: $8.83 billion vs. $8.72 billion expected
Total memberships: 260.8 million vs. 256 million expected
🎯 GRIT TAKE: Netflix had absolutely fantastic earnings, but the thing…upgrade to VIP to read the full GRIT Take.
KLARNA: Offers Subscription
Klarna, a Swedish fintech, is introducing a $7.99 monthly subscription, Klarna Plus, in the U.S., aiming to engage core users before its upcoming IPO. The service provides fee waivers, double rewards, and special discounts with key partners.
Source: CNBC
This strategy is part of Klarna's effort to boost its value, especially after its valuation dip in 2022. At one point, Klarna was Europe’s most valuable startup. The subscription, successfully tested in Ohio, is expected to broaden Klarna's appeal beyond its usual "buy now, pay later" offering. Klarna has around 37 million US users, and they believe the plan is attractive to roughly 15% of the user base.
FAA: Boots On The Ground
The FAA, led by Administrator Mike Whitaker, has increased its presence at Boeing's 737 Max factory to ensure quality control. They have added dozens of new inspectors at Boeing factories. This comes after a recent incident where a door plug failed on a nearly new 737 Max 9 during an Alaska Airlines flight.
Source: ABC News
This resulted in no serious injuries but significant cabin damage. In response, the FAA has halted this Boeing model's operations and initiated an audit of the Max production line. These actions come amidst Boeing's ongoing efforts to improve its safety reputation after two fatal crashes involving another model, the 737 Max 8. Boeing has also paused some production lines for safety training and appointed an independent advisor to review the recent incident.
Headlines You Need To Know: 🎙
Breaking The Bank of England
You might know him as the controversial money machine behind multiple political campaigns or his charitable donations. However, George Soros is one of the greatest investors ever to live. In fact, he has built an $8 billion net worth just from trading stocks.
Source: The Globe and Mail
In 1992, England faced economic hardship, where the economy faced high inflation and slow growth. England made a deal with Germany where 1 pound was worth 2.7 Deutchmarks. George Soros realized this deal was utterly unrealistic and made a $10 billion bet by shorting the pound.
On a day now known as Black Wednesday, England was forced to abandon the deal, and The British pound crashed. George Soros profited $1 billion from this trade; the rest is history.
Chart of the Day
📊 The Cost of Not Investing
Source: CNBC
GRIT Meme of the Day 😂
Tag GRIT Capital on social media for a chance to be featured in our meme or Tweet of the day in our GRIT daily newsletter! 👇
Source: @wallstreetbets
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