🎶 The Cardi IPO

Warner has got New Rules... as a newly publicly-traded company. Warner Music stock popped 20% during its first day on Nasdaq (ticker symbol WMG — so much for JAM). Warner owns major labels like Warner Records and Atlantic Records, signing deals with Dua Lipa, Cardi B, and Ed Sheeran's vocal chords.

• It's the third largest of the music "three-opoly," after Universal Music and Sony Music. Those two are owned by big conglomerates, making Warner the only pure-play "music stock."
• It's the biggest American IPO in 2020 so far — Warner saw enough market momentum to take its music public as the economy begins to pick up.

Thinking out loud... Streaming music success makes sense, but what about the blow from cancelled concerts? Warner did lose out on concert promotions and tour merch. Buut — streaming has been accounting for more of Warner's biz each year:

• Recorded Music made up 86% of Warner's total sales in 2019, and that was mostly thanks to streaming sales/licensing, which popped 23%.
• Warner signs artists and negotiates with streamers like Spotify to get paid on listens, then dishes out 40% of that as artist royalties.
• Warner had a 12% surge in recorded music streaming sales this April, fueled by heavy hitters like Dua Lipa's latest album. The more streams, the more $$$.

Best actor in a heating role... Cream of Mushroom. In March, we talked about how canned soup is making a comeback — Campbell's CEO was (pleasantly) shocked at a 1% sales growth driven by Millennials. Campbell's latest quarterly earnings reveal soup is still thriving:

• Campbell's soup sales soared 35% and total sales jumped 15% during the 3 months ending April 26 (aka, pre to mid corona-conomy).
• Confidence soared 100%: Campbell's CEO expressed newfound confidence that elevated demand will continue, and Campbell's raised its 2020 sales forecast.

A tomato bisque timeline... Consumer behaviors shifted quickly and dramatically with the quick/dramatic onset of COVID-19:

• Pre-corona: For years, consumers moved away from uber-processed packaged products (soup sales fell for 7-straight years), opting for fresher and less unpronounceable ingredient-packed foods (the reason why Kellogg's acquired Rx bars).
• Early-corona: As fear/lockdowns set in, consumers super-stocked up on cheap and nonperishable foods like canned soup and Kraft mac & cheese with expiration dates in 2038.
• Mid-corona: When unemployment rose and the economy took a major hit, the move toward cheaper, non-perishable Big Foods brands (like Campbell, Kraft, General Mills) continued.

Blame the Trolls... It's been a wild year for the world's largest movie theater chain — we'd never thought we'd cover so many AMC headlines in our lives. AMC's 11K+ movie screens around the globe have been closed since mid-March — now everyone is biting their nails over how this blockbuster will end:

• In April, AMC shares soared on word it had enough cash to survive until partial theater reopenings around Thanksgiving — AMC also said it would raise $500M in debt.
• A few weeks later, drama erupted over the Trolls World Tour movie, which was a smash success after Universal released it straight to streaming. Then AMC banned all Universal movies from its theaters.
• In May, rumors swirled around the possibility of an AMC acquisition by Amazon.
• Now, AMC says it has "substantial doubt" that it can remain in business. Lots of twists.

"We are generating effectively no revenue..." Not the first thing investors want to see in a regulatory filing. But as we know, public companies are required to be brutally honest about financials.

• Sales fell 22% in the first quarter, and AMC expects to have lost between $2.1B-$2.4B.
• AMC still believes it has enough cash to survive until a reopening "this summer or later." But opening isn't the only issue...

• Ghost: Snapchat decides to stop promoting President Trump's Snap account on its Discover page.
• Aerie: American Eagle said that sales are roughly 95% of their normal levels as its store reopen post-lockdown.
• Aviate: The US bans Chinese commercial airlines from flying to the US, as China hasn't permitted US airlines to resume flights to China.
• Reverse: Hydrogen-battery powered truck maker Nikola is expected to make its public trading debut today.
• iSale: Apple cuts prices of its latest iPhones in China to keep momentum as the economy reopens.

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• Weekly jobless claims
• Earnings expected from Slack, DocuSign, and AMC

Disclosure: Authors of this Snacks own shares of Spotify and Apple

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