Time to buy Netflix and just… chill?

A massive crackdown on Netflix fans sharing their subscription codes and letting friends or family watch for free has helped the O.G. streaming company add 9.3 million subscribers in the first quarter — five times the number it added a year earlier. 

While that’s fewer than the 13.1 million subscribers it added last quarter, it’s clear evidence the company’s crackdown on password sharing is bearing fruit. But so too are the company’s multiple pricing tiers and its plans for new and more varied programming to appeal to a wider customer base. Still, Netflix doesn’t expect to see as many new subscribers next quarter and said it will stop reporting subscriber numbers on a quarterly basis, focusing instead on revenue and profit figures.

Netflix now has 297 million paying subscribers worldwide, and it has set full-year 2024 revenue growth at 13 to 15 percent. The company has been unabashed in its self-admiration, as it leaves rivals including Amazon Prime, Disney+ and Apple TV+ in the dust. “No entertainment company has ever programmed at this scale and with this ambition before,” Netflix said in an investor letter introducing its quarterly results. “To satisfy such a large audience, we need many great stories that appeal to lots of different tastes — and by great, we mean movies, series and games our members love.” 

Media analyst Rich Greenfield at LightShed Partners said Netflix is locking in its position as the world’s leading streaming service: “All signs point to Netflix having reached escape velocity, with subscribers scaling far faster than investors expected.” So what does this mean for Netflix shareholders? While shares fell nearly 8 percent in midmorning trading Friday, there’s no need to get riled by a few bumps in the road. 

Maybe just buy Netflix and chill?

'The Halving': A quadrennial crimp in Bitcoin supply could boost the price further

Some time this Friday evening or early Saturday morning, the amount of Bitcoin able to be mined by obsessively compulsive computer programs will halve. Known simply as “The Halving,” it happens every four years, and despite the name, it has most definitely not been a horror story. 

The halving means that the remaining supply of Bitcoin that can be mined daily from its algorithm will drop to half of what it was four years ago. Traditionally, that drives up the price of Bitcoin’s limited supply. Only 21 million bitcoins can ever be mined, according to the algorithm developed by the legendary Satoshi Nakamoto, and 19 million of them are already in circulation. This week’s halving will lower from 900 to 450 — the number of bitcoins that can be mined in a day. That usually results in a price jump, but maybe not this time. The recent boost in Bitcoin value, up about 40 percent this year, was led by the legalization of Bitcoin ETFs, which launched a pricy hunt for the currency to fill ETF accounts. That’s led some analysts to suspect The Halving is already baked into the current price of about $60,000.

Still, every time Bitcoin rises in value, more Bitheads come out of the woodwork convinced they’ll get rich with a currency that is still too volatile to buy much. Like other speculative investments, Bitcoin’s also been hammered by the worsening geopolitical situation, particularly in Ukraine and the Middle East. Minutes after Israel said it had rocketed an Iranian air base on Thursday night in retaliation for Iran’s massive drone attack last Saturday, Bitcoin fell more than 5 percent in morning trading in Asia. 

Tesla board vows to forge on with plan to offer Musk $47 billion pay package

What’s a stable genius worth? According to Tesla’s board of directors, even more than X. On Wednesday, Tesla’s board vowed to revive a massive pay package for Elon Musk, the company’s chief executive, giving him $47 billion over 10 years. That’s $3 billion more than Musk shelled out for X (formerly Twitter) in 2022. 

In January, a Delaware judge said Musk had effectively overseen his own compensation plan, abetted by compliant board members. Calling the process “deeply flawed,” she nixed the package, which had been prepared in 2018. The pay package includes an option to buy 304 million shares for $23.34 a share. Tesla closed Thursday at $149.93, for a potential profit of $38.4 billion on stock options alone. The directors will now have to give shareholders more information about how the plan was devised and ask them to approve it again. That vote will take place as investors are increasingly worried about the 8.5 percent drop in sales in the first quarter, and the even steeper drop in its share price, down about 37 percent this year, and down 63 percent from its all-time high of $409 in November 2021. 

That’s wiped out $700 billion in equity and there’s no apparent plan to rebuild momentum. Musk is even considering shutting a plant meant to produce a $25,000 EV. Technically, Musk hasn’t been paid for the past six years, and to be fair, the package was conditional on his boosting the share price, which he has done. Just not recently. 

Musk does have his fans, though. Contrarian investor Cathie Wood and her Ark Innovation ETF just put $14 million into Tesla. But Tesla’s critics say Musk needs to turn the company around. “This has gone from a Cinderella story to… a horror show,” Wedbush Securities managing director Dan Ives told CNBC. “Musk needs to turn this around next week.” 

The Trump Bump has turned to 'Dump!': Truth Social’s fallen below its launch price

There is no escaping the law of gravity, especially when it comes to meme stocks. Remember Gamestop, the money-losing video game retail chain whose share price soared in early 2021, when angry gamers took on short-selling hedge funds and drove up the share price before it plummeted 80 percent in just a few months? That’s the hard lesson being learned by Trump fans who bought shares in Trump Media & Technology Group, the parent of Trump’s alt-X site, Truth Social. 

After nearly doubling when the company began trading under the DJT ticker in March, shares have now wiped out all its gains, closing Thursday at $33.19. While that’s up from Monday’s low of $26.61, it's well off its March peak of $79.38 and below the IPO price of $44, and shorts are having a field day. That prompted the company to post an FAQ explaining how to prevent shares from being loaned to a short seller. 

Meanwhile, two Apprentice contestants, Wes Moss and Andy Litinsky, who first pitched Trump on the idea of starting his own alternative to X, are suing the company. They say they’re not being allowed to cash out some of their $220 million stake, as they watch the share price plummet. The pair were a key part of the talks that led Trump Media to merge with Digital World, a SPAC that had raised $300 million in an IPO. Trump Media countersued blaming the pair for the company’s woes, saying they had “failed spectacularly at every turn.” 

That said, Truth Social is gaining ground in the micro world of right-wing social media platforms. Traffic in March was up 130 percent to 1.5 million unique visitors, eclipsing rival right-wing social media platforms Parler, Gettr and Gab. But as the New York Times pointed out this week, “Just because Truth Social is more popular than some of its competitors doesn’t mean it has a viable business.” Its 2023 revenue was only $4.1 million and it lost $58 million.

Gimme shelter from the interest rate storm: No cuts coming

It ain’t happening. That rate cut we all keep hoping for is not on the horizon, according to the cryptic murmurings of Fed officials this week. In the oblique language favored by Fed chairs, Jerome Powells said Tuesday that inflation at 4.6 percent is still too high for a rate cut from the current 5.25 to 5.5 percent target. 

“Given the strength of the labor market and the progress on inflation, it’s appropriate to allow restrictive policy further time to work and let the data and evolving outlook guide us,” Powell said. In other words, inflation hasn’t been low enough, long enough. That’s a bit of a reversal from Powell’s early March comments to Congress that the Fed was “not far” from having the confidence it needed to make new cuts. 

This week, Powell said “the process of moderating inflation to 2 percent has a long way to go.” The problem is that the Fed raises interest rates to make it harder for people to spend, but people keep spending. Some of the price pressure is maybe coming from profiteering by food and consumer goods companies that are raising prices because they can get away with it. That prompted the Federal trade Commission last month to tell Congress and policymakers to take a closer look at competition in the grocery business, where profit margins rose almost 15 percent. 

High rates have also sapped the housing market. The average 30-year fixed mortgage hit a five-month high of 7.43 percent, leaving many first-time homeowners unable to afford a house, and those with existing lower-rate mortgages unwilling to move. In part, that’s because home prices have jumped 50 percent since the pandemic, according to Capital Economics. The prospect of a few prospective homeowners being able to buy, means fewer homebuilders are willing to build on spec, creating a vicious cycle of low supply and higher prices. 

Still, probably the winningest long-term bettor on the U.S. economy says we’ll land softly without a recession: Goldman Sachs chief economist Jan Hatzius says the factors pushing up inflation in the first quarter were temporary, and there’s been no sign of the real recession indicator: mass layoffs.

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