“It’s going down, I’m yelling
Looks like Ke$ha got the lyrics wrong…
Twitter, everyone’s favorite app to bully complete strangers from the comfort (and safety) of their own homes, released earnings after the bell on Tuesday. How did investors react to the announcement? Not well…not well at all. Shares of Twitter (TWTR) closed Wednesday’s trading session down 10.8%. Despite reporting that the changes in Apple’s advertisement-tracking system impacted Q3 revenue less than expected, Twitter reported a net loss of $537M or $0.67/share.
- The company took a one-time hit of $766M relating to a previously announced settlement with a group of shareholders that accused the company of misleading investors. C’mon, look at Jack. He looks like a trustworthy guy.
- Excluding the settlement-related charge, operating income was $23M.
- According to Refinitiv, adjusted EPS was $0.18/share vs. an expected $0.15/share on $1.284B vs. an expected $1.285B.
Spotify has joined the long list of tech companies to outperform quarterly earnings expectations.. Well, not you, Twitter. The bane of all musicians’ existence posted dual 19% increases in active user and paying subscriber numbers up from last year, as well as a 75% increase in ad revenue YoY. The stock rose 8.30% Wednesday to close at $273.19.
- $SPOT made much of these gains by squeezing customers they’d already gotten their hooks in. Back in April they increased the price of their family plans for US users, as well as the cost of all their plans for European users.
- Over the course of the pandemic, the streaming service has mainly attracted new users through their extensive selection of podcasts. SPOT’s actually on track to surpass Apple on this front, projected to net 28.1M monthly listens over AAPL’s measly 28M. Suck it Tim Apple.
- If it seems like SPOT was inevitably poised to benefit from the pandemic, consider that their numbers initially suffered in early 2020, possibly because nobody can bear listening to Joe Rogan unless they’re stuck in a long commute.
Not a Model IPO
Rent the Runway (RENT) made its debut yesterday, and the first day as a public company had more ups and downs than a bipolar pole vaulter. Shares started out at $23, higher than the IPO price of $21, and it was looking like Zoolander hitting the crowd with Blue Steel. Alas, the stock ran out of gas, and finished the day down 8.14%. The clothing as a service (CaaS) business was founded in 2008 but hit hard times during 2020 as consumers found little use for a high-end subscription service as they spent their days in sweatpants. Clothing rental certainly isn’t a new concept, but RENT’s “Closet in the Cloud” demonstrated that everything can be disrupted by technology, as many of us remember a lower tech method of short term clothing use called “leave the tags on.”