🥱 Netflix earnings underwhelm investors as Hastings sets stage for exit
Hey Snackers,
We know Tesla’s Cybertruck sales have been plagued since the first stainless steel monstrosity rolled off the assembly line in 2023, but here’s a new data point to show just how bad it’s gotten: in the fourth quarter, of the 7,071 Cybertrucks that were registered in the US, one-fifth of them were bought by SpaceX or other companies Elon Musk runs.Â
On Thursday, stocks rallied on news of a 10-day ceasefire between Israel and Lebanon, then pared some gains on reports from Gulf and European officials that the US-Iran deal could take six months to finalize. Ultimately, the S&P 500, Nasdaq 100, and Russell 2000 all set new record closing highs.
🧠Trivia time… Take a swing at our Snacks Seven Quiz:
Adjusted for inflation, which golfer took home the biggest prize money from winning the Masters Tournament?
Netflix beats on Q1 revenue, gives downbeat Q2 forecast, and says Hastings will leave in June
Streaming giant Netflix reported results for its first quarter after markets closed on Thursday and said its cofounder and chairman, Reed Hastings, would leave the company’s board in June after his term expires.Â
The company posted revenue of $12.25 billion, above Wall Street’s consensus of $12.18 billion. Its per-share profit of $1.23 was above estimates of $0.76, but that’s likely because it was boosted by the $2.8 billion breakup fee from walking away from its merger deal with Warner Bros. Discovery.
Shares fell sharply after-hours following the earnings report.
Hastings is leaving in order to “focus on his philanthropy and other pursuits,” the company said. He has been with Netflix since 1997 and stepped back from CEO duties in 2023.Â
The Takeaway
Investors seemed to love Netflix walking away from the Warner Bros. deal, bidding the stock up more than 25% since late February, when it decided to bail. A decent chunk of those gains were seemingly taken away in the immediate aftermath of this earnings report. Going forward, Netflix will have to stay in investors’ good graces without Hastings, the man who transformed the company from a DVD-by-mail business to one of the earliest streaming success stories.
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Elon Musk wants to go “light speed” on Terafab. The biggest chipmaker in the world says “there are no shortcuts.”
Tesla CEO Elon Musk has reportedly asked the chip industry suppliers for his Terafab chipmaking project to move at “light speed” in an effort to help Tesla and SpaceX manufacture the AI chips they need. But on an earnings call this morning, TSMC, the world’s biggest chipmaker and a Tesla supplier, said it isn’t convinced that’s physically possible.
TSMC Chairman and CEO CC Wei offered a blunt assessment of Musk’s ambitious Terafab timeline: “There are no shortcuts.” According to Wei, the physics of a modern foundry, which he says takes roughly five years to build and ramp, remains the ultimate speed limit, regardless of the customer’s urgency. “That’s a fundamental of the foundry industry,” he said.
Remember, Musk has enlisted Intel to join in the Terafab effort.
Meanwhile, TSMC crushed Q1 expectations and gave upbeat guidance, but investors were unimpressed.
The Takeaway
It’s hard to overstate how important the Terafab project will be, if you believe what Musk says about chip supply being the “limiting factor” for Tesla’s growth in three to four years. During a presentation for Terafab last month, Musk said, “We either build the Terafab or we don’t have the chips.” Growth is already slowing at Tesla, where revenue declined for the first time ever last year, so not having the chips the business requires isn’t really a palatable option. A better alternative to keep that growth up: maybe Musk should just take our advice and merge Tesla with SpaceX.
Bitcoin nears key level that capped previous January rally
Bitcoin has rallied almost 10% in April, after a meager 1.8% gain in March. But a CryptoQuant report says that $76,800 is a break-even point for many traders, which has “acted as a powerful bear market resistance level.” Meanwhile, Glassnode analysts said “the recovery remains measured rather than aggressive.”
Snacks Shots
🏀 🏆 The first round of the NBA Playoffs begins this weekend! In case you’re wondering, traders think the Oklahoma City Thunder (46% favorites*) will emerge as the champions, aided by a phenomenal performance by Shai Gilgeous-Alexander (the 41% favorite to win the Finals MVP).Â
*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.
What else we're Snackin'
Spirited away: Spirit Airlines could liquidate as early as this week, which was good news for rival discount carrier FrontierÂ
Pep rally: Hims & Hers rose after Health Secretary Robert F. Kennedy Jr. said on Wednesday that the FDA may ease restrictions on 12 peptidesÂ
“Don’t be evil”? Google has ditched its objection to defense work and is now pitching its Gemini AI model to the Pentagon
This week, Oracle is partying like it’s 1999
Snack Fact of the Day
On the heels of its AI pivot announcement, Allbirds stock was traded more than JPMorgan and Exxon Mobil on Wednesday.Â
Friday
Earnings expected from State Street