WeWork Co-Founder Has Cashed Out at Least $700 Million Via Sales, Loans

This sort of stuff gives the markets jitters.... Aivars Lode

WeWork Cos. co-founder Adam Neumann has cashed out more than $700 million from the company ahead of its initial public offering through a mix of stock sales and debt, people familiar with the matter said—an unusually large sum given that startup founders typically wait for the IPO to monetize their holdings.

Mr. Neumann, who is chief executive of the shared office-space giant and remains its single largest shareholder, over several years has sold some of his stake in the company and borrowed against some of his holdings, the people said. 

The exact size of Mr. Neumann’s current ownership in WeWork couldn’t be learned. He recently set up a family office to invest the proceeds and has begun to hire financial professionals to run it, they said.

Investors in startups have generally frowned upon founders who cash out large chunks of shares ahead of a public-markets debut, because it raises questions about their confidence in the company. On the other hand, people close to Mr. Neumann say, his borrowings against some of his WeWork shares indicate that he is bullish on the company’s long-term prospects.

Jefferies Analyst Review of Microsoft Corporation

IBM underperforms, Netflix underperforms and so does Microsoft . Feels like a trend starting. What impact will that have on the markets?  Aivars Lode

Key Takeaway from Jefferies Equity Research, July 18, 2019. 
MSFT reports after the close today. Estimates appear somewhat reasonable, as consensus F4Q19 rev sequential growth is below the historical F4Q cc sequential growth. F1Q estimates are above typical seasonality although any outperformance in F4Q will mitigate this. We believe management and investors are likely to focus on MSFT's continued cloud efforts.

Read full Jefferies report here

Netflix Hammered After Q2 Earnings Release

If we have consistent news like this and IBM missing numbers will that be the trigger for the tech sell off?  Aivars Lode

Netflix shares are getting beaten down to the tune of 11 percent following the company’s Q2 earnings report on Wednesday afternoon, because international net additions were 2.8 million. Analysts thought that number would be closer to 4.8 million.

While most investors are aware of the streaming media company’s domestic prowess, Netflix has a significant and crucial international subscribership as well. Netflix can only sustain its lofty valuation if the company’s global subscriber growth can validate increasing content spending and debt. Therefore advancement  is entirely dependent on Netflix’s prospects internationally, especially in countries such as India and Malaysia. If Netflix misses by that much such a massive amount, 42 percent on international net additions, the stock is understandably going to get brutalized by investors.

It was just last Tuesday at the market’s close that shares of Netflix were up as much as 2 percent, following the online streaming company’s news that it bested Wall Street expectations on earnings, revenue and subscribership for the first quarter.

The company is blaming a number of factors such as price increases in certain countries, an anemic menu of original content in the second quarter, and a particularly robust first quarter that may have offset results from March to June. Netflix is now counting on a new season of “Stranger Things” to help with international growth next quarter.

“Our missed forecast was across all regions, but slightly more so in regions with price increases,” Hastings wrote in his letter to shareholders. “We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions.”

Netflix still faces competition from up and coming rivals though, as well as a loss of key programming. WarnerMedia announced the name for its upcoming streaming service recently, HBO Max, and confirmed it will be the new home for the beloved NBC sitcom “Friends” along with new original programming. This means Netflix will lose the Emmy-winning comedy series come spring 2020.

One of Netflix’s most popular TV shows, The Office, is also leaving the streaming service for NBCUniversal’s rival product in January 2021.

Last month, Netflix tweeted out the news. “We’re sad that NBC has decided to take The Office back for its own streaming platform,” it said.

By Ian Young - ETF Trends