Airbnb's Record Plunge, Disney's Mixed Earnings | Bloomberg Technology

Airbnb's Stock Plunge

• Airbnb's stock experienced a record plunge due to a weak outlook for the peak holiday season.
• The company reported a moderation in sequential growth, indicating that the growth wasn't as strong in the previous quarter.
• Airbnb's executives acknowledged that booking windows are shortening, suggesting a potential slowdown in travel demand.
• The company plans to invest more in expanding supply in new areas like Latin America and Asia, indicating that they are facing saturation in existing markets.
• Airbnb's CEO took to social media to reassure investors that the current stock price presents a good buying opportunity.
• Despite being a category leader, concerns remain about Airbnb's ability to sustain double-digit growth in the next two to four quarters.

Market Volatility

• The outlook for the market is volatile and not expected to subside despite recent rallies.
• The VIX volatility index indicates that large up and down days are likely to continue for several trading sessions.
• Smaller cap and value stocks have seen a decline in trading activity as technology stocks rally.
• The Nasdaq 100 is up almost 2% while the Russell 2000 is only up 0.8%.

Hedge Fund Losses

• Some of the world's biggest equity hedge funds lost hundreds of millions of dollars from investing in popular tech stocks during the market downturn in mid-July.
• Renaissance Technologies, a hedge fund, experienced a 9% decline in July due to a large position in Nvidia.
• Other hedge funds have also seen losses due to concentrated positions in Microsoft, Amazon, and Nvidia.

Reddit's Growth and Partnerships

• Reddit beat expectations on sales growth and revenue forecast for the third quarter.
• Reddit's advertising market is stable and expected to continue growing in the second half of the year.
• Reddit's user growth is driven by improvements to the platform, making it easier to access, post, and connect with communities.
• Reddit has invested in its ad platform to serve more advertisers and grow its advertising base.
• Reddit is focusing on delivering unique and engaging content to its users, including partnerships with the NFL and NBA.
• These partnerships provide opportunities for advertisers to support content that aligns with their target audience.
• Reddit is exploring the potential of licensing data to AI companies, but a long-term vision for this business model is still developing.
• Reddit is still in the early stages of exploring AI and its potential for advertising.
• Reddit has a strategy for partnerships that involves learning and finding ways to work with AI.
• Reddit believes in the open internet and wants to allow people access to important information.
• Reddit has a set of rules for data usage and access, including protecting user privacy.
• Reddit is having conversations with various players, large and small, about accessing its data.
• Reddit has signed deals with companies that respect its rules and policies.
• Reddit is not a big player in political ads and has never been.
• Reddit sees a lot of conversation about politics on its platform, but it is not a major focus.
• Reddit has diverse communities that have moments at different times, so political activity is not always the biggest focus.
• Jen Wong, Reddit's COO, will be joining the discussion to talk about the company's deals and data licensing partnerships.

Supermicro's Earnings Miss

• Supermicro's shares initially surged after hours, but then dropped significantly after the company missed revenue and profit estimates for the quarter. However, the company provided an outlook that was billions of dollars above what analysts were expecting.

SoftBank's Buyback

• SoftBank announced a $3.4 billion buyback of its own shares, planning to purchase up to 6.8% of its free-floating outstanding shares by August 7, 2024. This move comes as the CEO prepares for large-scale investments in AI and semiconductors.

Plus Acquires Juniper Networks

• The UK Competition and Markets Authority cleared the $14 billion deal for Plus to acquire Juniper Networks, after investigating whether the deal would lessen competition in the UK. The deal was similarly approved by the European Union last week.

Sony's Revenue and Profit Forecast

• Sony raised its revenue and profit forecast for the fiscal year ending March, driven by successful performance in its gaming division, which generated operating profits of $1.9 billion. However, PlayStation 5 console sales reached only 2.4 million units, significantly below the 3 million units analysts had expected.

Shopify's Earnings Beat

• Shopify reported earnings results before the opening bell, beating estimates. The company's president, Harley Finkelstein, attributed the success to the company's ability to earn the trust of millions of merchants and businesses worldwide. He also highlighted Shopify's ability to achieve both growth and profitability, with revenue excluding logistics sales up 25% for the quarter and free cash flow margin more than doubling from 6% to 16% year-over-year.
• Shopify is experiencing healthy growth rates and is gaining market share by adding new merchants.
• Shopify is using a data-driven approach to marketing, experimenting with new channels like social media platforms.
• In Q1, Shopify experimented with a new social media platform, doubling its investment in Q2.
• Shopify is focused on expanding beyond English-speaking countries and into the point-of-sale business.
• Shopify achieved five consecutive quarters of 25% topline growth while remaining profitable.
• Shopify's growth is driven by its ability to help merchants discover new markets and customers.
• Shopify's marketing spend on social media platforms is generating a significant return on investment.
• Shopify has expanded beyond e-commerce and now offers a point-of-sale solution that has surpassed $100 billion in gross merchandise volume.
• Shopify is seeing strong growth in international markets, with over 50% of its growth in Q2 coming from outside core English-speaking regions.
• Shopify is not reliant on any one type of merchant, with a diverse customer base including Nestle, Heinz, Mattel, and Staples.

Disney's Streaming Challenges

• Disney reported its first-ever profit in streaming.
• The company is facing challenges with subscriber growth and has raised prices.
• Disney is reducing programming and relying on movies to drive streaming service subscriptions.
• Disney is focused on profitability and does not expect significant subscriber growth in the near future.
• Disney is in negotiations with Comcast to acquire their 33% minority stake in Hulu.
• The two companies have disagreed on the fair value of Hulu and have entered into arbitration proceedings.
• Disney shares are down 1.9% on the day.
• The discussion focuses on Disney's streaming services, particularly Disney+ and Hulu.
• The speaker expresses concern about the profitability of Disney+ and its ability to generate significant free cash flow.
• The speaker believes that Hulu needs to be resolved as part of Disney's streaming strategy.
• Investors are expecting a significant amount of money to be spent on Hulu, with Comcast potentially benefiting more than Disney.
• The speaker suggests that Disney should focus on long-term growth in streaming by investing aggressively and engaging consumers.
• The speaker highlights the importance of consumer love and engagement for streaming services.
• The speaker expresses concern about the slowdown in Disney's theme park business.

Reddit's Potential in Sports Advertising

• The speaker mentions Reddit as a company with potential in the sports advertising market.
• Google's investment in Reddit is a strong indicator of the platform's potential, as Google is a leader in AI and search.
• Reddit's increasing visibility within Google search results suggests a growing user base and engagement.
• Reddit's ability to target advertising effectively, without relying on third-party cookies, makes it an attractive investment opportunity.
• The upcoming lockup expiration for Reddit stock is seen as a potential catalyst for growth.

Lyft's Profitability and New Features

• Lyft reported its first profitable quarter, with revenue growth of 40% year-on-year and strong booking numbers.
• Despite the positive results, Lyft's stock price declined due to a slight adjustment in the company's guidance for the next few quarters.
• Lyft's CEO, David Risher, attributes the stock decline to Wall Street's short-term focus, while he remains optimistic about the company's long-term prospects.
• Lyft is implementing a new feature called "Price Lock" that allows riders to lock in a price for a specific route and time each day.
• Lyft is introducing a new subscription service that will allow riders to pay a small fee to lock in a consistent price, eliminating surge pricing.
• Lyft is also investing in advertising, seeing it as a new form of advertising that will be highly effective due to the company's access to first-party data about rider preferences.
• Lyft believes that autonomous vehicles (AVs) will be a significant growth driver for the company, as they will provide a way to commercialize expensive assets and integrate them into Lyft's platform.
• David Risher, CEO of Lyft, believes that creating a proprietary ride-hailing app and fleet of self-driving cars is a risky strategy, and that a better approach would be to make Lyft's technology widely available to other car manufacturers.
• Lyft's stock price rose after Tesla delayed its robotaxi event, suggesting that investors believe Lyft is well-positioned to benefit from the development of AV technology.
• Lyft's second-quarter revenue missed analyst estimates, leading to a decline in the company's share price.

Rivian's Earnings and Cost Efficiency

• Rivian, an electric vehicle manufacturer, reported that its second quarter earnings were in line with previous guidance.
• Rivian's CEO, RJ Scaringe, stated that the company's focus is on driving cost efficiency and achieving positive free cash flow and profitability.
• Rivian made significant changes to its production process and supply chain in the second quarter, resulting in a positive gross profit margin for each vehicle sold.
• Rivian aims to achieve a long-term gross margin of around 25%.

Tesla's Software Update

• Tesla will release a software update to most of its cars sold in China to address a potential safety hazard.

X's Antitrust Lawsuit

• X, formerly known as Twitter, filed a lawsuit against a group of companies for allegedly organizing an illegal boycott against the platform.
• A social media company is accusing an industry group of violating antitrust laws.
• The company alleges that the group, which represents advertisers, engaged in anticompetitive behavior by advising its members to boycott the company's advertising.
• The company claims that this boycott has cost them billions of dollars in revenue.
• The company argues that the boycott is illegal, although the speaker acknowledges that boycotts are common and often used by consumers and businesses to express displeasure.
• The speaker suggests that the lawsuit may be a signal that the company is struggling financially and that they are willing to fight back against the industry.
• The speaker also points out that the company's lawsuit ignores the behavior of its CEO, Elon Musk, who has been known to make controversial statements and engage in aggressive behavior towards advertisers.
• The speaker suggests that some advertisers may be choosing to boycott the company because they do not want to work with Musk.