Today is Thursday, February 3, 2022.
New to this newsletter? Sign up here.
Facebook Loses Daily Active Users
Shares of Facebook’s parent company Meta Platforms (Nasdaq: FB) fell 22.89% in after-hours trading on Wednesday after the technology giant posted negative earnings.
Financials: Meta reported earnings per share of $3.67 and revenue of $33.67 billion; both were slightly below estimates.
Falling Short: Daily active users hit 1.93 billion and monthly active users reached 2.91 billion; both were below estimates. This is also the first time the company has lost active users. And the company’s guidance of $27 billion to $29 billion in revenue for the first quarter was low.
Internal Problems: Reality Labs, Meta’s virtual and augmented reality segment, lost $3.3 billion in the quarter. The company also anticipates higher expenses due to increased technical and talent costs.
External Problems: Meta said that changes involving Apple (Nasdaq: AAPL) iOS will impact ad targeting and measurement. Likewise, macroeconomic challenges such as cost inflation and supply chain disruptions will impact budgets for advertisers on Facebook.
Quote: “We expect continued headwinds from both increased competition for people's time and a shift of engagement within our apps towards video surfaces.” - Meta’s earnings release.
Final Thoughts: With such a big drop in price, buying Facebook stock could be seen as a long-term bet. However, the company is currently struggling.
Notable Earnings Today: Ford Motor (NYSE: F), Amazon (Nasdaq: AMZN), Snap (NYSE: SNAP), Pinterest (NYSE: PINS), Nokia (NYSE: NOK), Penn National Gaming (Nasdaq: PENN), Merck (NYSE: MRK), Activision Blizzard (Nasdaq: ATVI), ConocoPhillips (NYSE: COP), Eli Lilly (NYSE: LLY), Honeywell International (Nasdaq: HON), Unity Software (NYSE: U), Estee Lauder (NYSE: EL), Cigna (NYSE: CI), Royal Dutch Shell (NYSE: RDS.A), Fortinet (Nasdaq: FTNT), Skyworks Solutions (Nasdaq: SWKS), Skechers USA (NYSE: SKX), Vista Outdoor (NYSE: VSTO), GoPro (Nasdaq: GPRO), ABB (NYSE: ABB), Abiomed (Nasdaq: ABMD), Allstate (NYSE: ALL), Aptiv (NYSE: APTV), Becton Dickinson (NYSE: BDX), Biogen (Nasdaq: BIIB), Boyd Gaming (NYSE: BYD), Cantaloupe (Nasdaq: CTLP), Cardinal Health (NYSE: CAH), Clorox (NYSE: CLX), Corteva (NYSE: CTVA), Cummins (NYSE: CMI), Deckers Outdoor (NYSE: DECK), Hain Celestial Group (Nasdaq: HAIN), Hanesbrands (NYSE: HBI), Hartford Financial Services Group (HIG), Hershey (NYSE: HSY), Intercontinental Exchange (NYSE: ICE), Lazard (NYSE: LAZ), Lions Gate Entertainment(NYSE: LGF.A), Lumentum Holdings (Nasdaq: LITE), Meritor (NYSE: MTOR), Microchip Technology (Nasdaq: MCHP), News Corp (Nasdaq: NWS), Nintendo (OTCMKTS: NTDOY), Nokia (NYSE: NOK), NortonLifeLock (Nasdaq: NLOK), Parker-Hannifin (NYSE: PH), Post Holdings (NYSE: POST), Prudential Financial (NYSE: PRU), Quest Diagnostics (NYSE: DGX), Ralph Lauren (NYSE: RL), Roche Holding (OTCMKTS: RHHBY), Suncor Energy (NYSE: SU), Synaptics (Nasdaq: SYNA), Takeda Pharmaceutical (NYSE: TAK), W.W. Grainger (NYSE: GWW), WestRock (NYSE: WRK), World Wrestling Entertainment (NYSE: WWE), Lightspeed (NYSE: LSPD), Suncor Energy (NYSE: SU).
Notable IPOs Today: Investcorp Europe Acquisition Corp I Class A Ordinary Shares (Nasdaq: IVCB), Murphy Canyon Acquisition Corp. Unit (Nasdaq: MURFU)
Notable Equity Crowdfunding Campaigns Ending Today: N/A.
Notable Economic Events Today: Jobless claims (8:30 a.m. ET), Nonfarm productivity (8:30 a.m. ET), Markit services PMI (9:45 a.m. ET), ISM non-manufacturing employment (10:00 a.m. ET), ISM services index (10:00 a.m. ET).
Spotify Sunk by Slow Growth
Shares of Spotify (NYSE: SPOT) dropped 10.43% in after-hours trading on Wednesday after the audio streaming company posted mixed earnings.
Financials: Spotify reported a €0.21 loss per share and revenue of €2.69 billion; both were better than expected.
The Problem: The user guidance from the company was seen as weak. Spotify forecasted 418 million monthly active users and 183 million premium subscribers; both were lower than expected.
Final Thoughts: With shares of Spotify down 39% in the past year, some investors may want to buy the stock. The problem is that there is questionable growth for the foreseeable future.
2 Streaming Entertainment Stocks to Check Out
Here are two streaming entertainment stocks that had a bad 2021, but are aiming to go back up this year.
Rocking with Roku: Shares of Roku (Nasdaq: ROKU) are down 63% in the past year, but some investors are hopeful that the company can turn things around. Fox News International recently expanded its distribution on Roku.
Fun with FuboTV: Shares of FuboTV (NYSE: FUBO) are down 78% in the past year, but there are some positive signs. Last week, LightShed Partners upgraded the stock to neutral.
Final Thoughts: While both companies have their challenges cut out for them, the streaming market is robust and could support the growth of both businesses.
Trends to Watch
Lofty Goals: Alphabet eyes $2 trillion value after blowout results (Reuters)
Banking Meets Crypto: Federal Reserve Bank of NY Lays Out Possible Stablecoin Scenarios (CoinDesk)
Falling: Qualcomm plunges despite Q1 earnings beat (Seeking Alpha)
Another One: After Raising Almost $30 Million, StartEngine Plans Another Self-Crowdfunding Round in 2022 (Crowdfund Insider)
Thank you for reading!
Forward to a friend and tell them to sign up here.
Want more investing tips? Listen to the podcast.
Questions or comments? Hit reply to reach out.