![[Noam Galai/Getty Images]](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/7Fzbq76dpoAcSOm4le0eyY_2_GettyImages-1251623833.jpg)
Hey Snackers,
Russia intensified attacks on civilian targets in Ukraine even as Moscow said it would let Ukrainians flee — but only to Russia and its close ally Belarus. The US is investigating whether Russia’s actions constitute war crimes.
US stocks plummeted to start the week, with the S&P 500 dropping 3% for its worst day in nearly two years. Investors are concerned a US ban on Russian oil imports could make oil prices soar even further and slow the economy's rebound. FYI: The White House said no decision on a ban had been made.
Bed Bath & Beyond shares soar on word that GameStop’s Ryan Cohen has a big stake — and bigger demands
A plush bed for Poochie... Shares of Bed Bath & Beyond soared as much as 86% yesterday after Chewy founder Ryan Cohen disclosed a nearly 10% stake in the battered housewares chain. Cohen’s an activist investor who made his first fortune selling his pet-food biz Chewy to PetSmart for a reported $3.4B. He later became chair of GameStop’s board, promising an ecommerce turnaround. Now he’s eying BB&B:
- Just don’t touch the coupons: In a letter, Cohen told BB&B’s board to hone its focus, pay execs in stock to spur growth, think about spinning off its fast-growing Buy Buy Baby biz, and consider selling to a private-equity buyer.
- Hanging on by a Wamsutta thread: Despite a pandemic bump, BB&B’s stock is down 70% over the past decade as it’s faced steep competition from Amazon, Walmart, and Target (while the average US stock has more than doubled).
If this all sounds familiar… Cohen sent GameStop’s board a similar letter in November 2020, prompting its stock to skyrocket 27X in a Reddit-powered investment blitz two months later. When Cohen grabbed the reins shortly after, he promised to quickly expand into ecommerce. But that hasn’t happened.
It’s a big test for the meme-funding model… By pressuring BB&B to reorganize, Cohen’s jumped into a second turnaround project before completing his first: GameStop’s revenue and profit have remained nearly flat under his command. But since GS shares are still up 8X since Cohen’s original letter, the company’s raised $1.6B by selling new shares to pay off all its debts. And if Cohen succeeds in revamping GameStop’s sales, duvet covers could be next.
Disney+ is rolling out an ad-supported tier as streamers start adopting cable-y habits
Waiting 10 seconds to skip… as your kid rewatches “Encanto” for the third time. Disney’s aiming for a cheaper subscription plan for its Disney+ streaming service (to debut later this year). The pricing is TBD, but it’ll be less than its standard $8/month (or $80 a year) option. There’s just one catch: commercials. Disney already has ad-supported versions for its Hulu and ESPN+ plans, but hasn’t added commercials to its namesake streamer. Here’s why it’s doing it now:
- Growth: Disney execs hope that a cheaper streaming option will help it reach 230M D+ subscribers by 2024. Since its launch, in 2019, Disney+ has added 130M subscribers (FYI: Netflix has 220M).
- Profits: Disney+ still isn’t profitable as a stand-alone segment, probably because it’s splurging so much on original content and keeping prices low to drive subs. The Mouse House is boosting spending by up to $1B on new programming this quarter alone.
If you can stream it, you can do it… Ad-supported services use a model that's helped make the TV biz profitable since forever. That’s why streaming rivals like Comcast’s Peacock and WarnerMedia’s HBO Max also offer cheaper commercials-based plans. Unlike streaming pure play Netflix, OG media conglomerates have to justify spending extra $$ on streaming costs as they balance more profitable parts of their biz (think: amusement parks and internet service).
Streaming is starting to look a lot like cable… bundles, ads, and all. The streaming market is saturated, and it’s a fight for every new sub. (Last year, the average number of subs per user fell for the first time.) Streamers are trying to sweeten their value props by offering cheaper ad-filled tiers and bundles (think: Disney+, Hulu, ESPN+) but risk resurrecting a long-hated biz model along the way.
What else we’re Snackin’
- Rated: Investors have been worried about coming interest-rate hikes, but with so much geopolitical turmoil, central banks worldwide are rethinking their plans. Many are delaying or softening hikes.
- Unstream: TikTok suspended new uploads in Russia, citing a law that would imprison anyone who posts info that authorities consider to be “fake” about the war. Meanwhile, Netflix pulled out of Russia altogether.
- Incoming: President Biden is reportedly planning an executive order this week that will outline the government’s strategy for regulating crypto, including the possibility of a Fed-backed digi-dollar.
- Robo: Intel filed to take its self-driving-car unit, Mobileye, public. The chip giant bought the Israeli company for $15B, but it could nab a $50B valuation as a solo company, #PeopleFamiliarWithTheMatter said.
- Inception: Kohl’s has opened 200 Sephoras within its stores. Now the struggling department chain wants to expand its Sephora biz to $2B in annual sales, and is on track for 600 more “stores in stores” by next year.
Tuesday
- International Women’s Day
- Earnings expected from Dick's Sporting Goods, Petco, Bumble, and MongoDB
Authors of this Snacks own: shares of Comcast, Disney, Amazon, Walmart, and Netflix
ID: 2069587