Companies
Peloton (PTON) shares closed down 24 per cent at $24.22, below its IPO price and about 85 per cent below the ATH, after reports it is halting production of some products... Market cap is now below $8bn... Apple (APPL) should just buy it. Turns out it was just an exercise bike with an iPad attached… everyone knows what happens to exercise bikes. The wheels are off, but were they ever on? Netflix (NFLX) was dumped after hours as it missed on subscriber growth... shares down 20 per cent after the closing bell. Top and bottom line numbers were actually good but stock down on weak subs guide and is caught in the broad mood against pandemic bubble winners.
Britishvolt factory plans charged up by £1.7bn in funding
Britishvolt has secured about £1.7bn in funding from abrdn (ABDN) and industrial property company Tritax to build its battery plant in Blyth, Northumberland.
The so-called Gigaplant has also secured an undisclosed amount of government funding, reportedly about £100m, from the UK government through its Automotive Transformation Fund.
The £3.8bn project is being built on an old coal stocking yard at the former Blyth Power Station. Once complete, the plant will employ more than 3,000 people and produce enough cells each year for 300,000 electric vehicle battery packs. By the end of the decade, it will have the capacity to manufacture batteries capable of producing 30 gigawatt-hours of power. The non-profit Advanced Propulsion Centre estimates that demand from electric cars and vans at that time will be around 90 GWh.
Other partners in the project include commodities giant Glencore (GLEN), industrials group Siemens (GER: SIE) and lender Barclays (BARC).
Netflix finding subscriber growth harder to come by
Netflix (NFLX) subscriber growth is slowing. In the fourth quarter of 2021, it added 8.3m paid subscribers which was a little below expectations of 8.5m. More concerning for investors is the streaming service is now only forecasting 2.5m net adds in Q1 2022, which is 62 per cent of the 4m it added in the same quarter last year.
The tricky thing for Netflix is that competition for consumer attention is increasing at pace. Disney Plus now has 118m subscribers and expects to have between 230 and 260m by 2024. On top of this, Amazon and Apple have also upped their content game and the rising popularity of cloud gaming is taking more of people’s attention. There is only so much time in a day people can spend looking at a screen.
To ward off this competition, Netflix has been investing heavily in content. It released big hits like The Witcher, Emily in Paris and Squid Games and has branched out into mobile gaming. However, this investment meant the operating margin slipped to 8.2 per cent in Q4 down from the mid-20s.
It expects operating margin to return to around 20 per cent in 2022 thanks in part to planned rise in the price of its US subscriptions. It has done the opposite in India though, where it has slashed prices in a bid to attract customers in the world’s second most populous country.
The market doesn’t seem too impressed by this new plan with the share price down 17 per cent since the beginning of the year. With interest rates to rise, the $15bn debt pile is also a weight around the neck. Content creating is an expensive business and competition is stiffer than ever. AS