Friday,
February 26, 2021

Market recap

Dow Jones

31,402.01

-559.85 (-1.75%)

S&P 500

3,829.30

-96.13 (-2.45%)

Nasdaq

13,119.43

-478.54 (-3.52%)

Netflix

$548.18

-$5.23 (-0.95%)

AB InBev

$60.04

-$5.21 (-7.98%)

Gamestop

$108.82

+$17.11 (+18.66%)

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Top Story

Netflix’s Investment in South Korean Media

As Domestic Subscriber Growth Slows, Netflix Looks for International Viewers

Netflix (NFLX) is planning to spend $500 million on South Korean films and TV shows this year, one of its largest recent international investments. As the streaming industry becomes more crowded, Netflix wants to maintain its lead and is hoping that audiences around the world will be drawn to its South Korean content.

Netflix hit the 200 million subscriber benchmark at the end of 2020. Its subscriber growth in the US has fallen recently, so it is doubling down on gaining international subscribers. During the last quarter of 2020, Netflix gained 2 million subscribers in Asia and 4.5 million in Europe, the Middle East, and Africa. It added just 860,000 in the US and Canada during the same time frame.

South Korean Media Gains Global Attention

The South Korean entertainment industry is gaining attention on a global scale. The film Parasite made history at last year’s Oscars, becoming the first non-English-language title to win best picture. It also took home three other academy awards.

Other South Korean cultural exports are also gaining ground around the world. K-pop band BTS received a Grammy nomination and has topped billboard charts in the US. South Korean variety and comedy shows are also gaining international fans.

Other Investments in International Content

Netflix is also pouring resources into local content in Europe, the Middle East, and Africa, as well as other parts of Asia. The streaming giant spent $400 million on local content in India during 2019 and 2020 and it is expected to announce another significant investment in Indian content next month. Netflix is also working on anime films with Japanese companies and this content is gaining fans worldwide.

Streaming services have seen viewership numbers spike during the pandemic as people have searched for ways to pass the time at home. As vaccine rollout unfolds, there will be more in-person entertainment options competing for people’s attention. There are also an increasing number of streaming platforms crowding into the space. Netflix sees international content as a way to maintain its lead.

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AB InBev Sees Hard Seltzer Sales Pop

As Beer Sales Slump, Seltzer Is a Bright Spot

Demand for hard seltzer is helping beverage companies regain some of their sparkle. Anheuser-Busch InBev (BUD), the world’s largest brewing company, has seen sales of Budweiser, Bud Light, and other products slump during the pandemic as a result of shuttered bars and canceled events. But flavored, alcoholic sparkling water has provided a bright spot for AB InBev and the alcohol industry as a whole.

As part of its Q4 report yesterday, AB InBev shared that sales for its “beyond beer” category, which includes readymade cocktails and hard seltzer, grew by double digits and topped $1 billion. The company reported overall organic sales growth of 4.5% during the fourth quarter. Much of this growth was driven by hard seltzer sales.

Traditional Alcohol Companies Jump on the Seltzer Trend

AB InBev is relatively new to the hard seltzer game. Early last year, the company rolled out Bud Light Seltzer and it recently launched Michelob Ultra Hard Seltzer.

White Claw, which is owned by Mike’s Hard Lemonade, was an early leader in the market. Larger, more traditional brewing companies noticed White Claw’s success and have rushed to develop and market their own hard seltzers in recent years.

Traditional domestic beer is still the largest alcohol category in the US, but it has been losing market share to other types of alcohol in recent years. This trend has been accelerated by the pandemic.

Seltzer Sales Expected to Keep Bubbling

AB InBev sees hard seltzer as a way to win back people who used to drink its beer and have recently become more interested in craft beers, mixed drinks, and other products. Additionally, the company hopes to use seltzer to attract new consumers who might not be drawn to its beer products.

IWSR, the leading alcohol industry data provider, expects that sales for hard seltzer and ready-to-drink cocktails will climb by 21.8% per year between 2019 and 2024. These drinks will mainly cut into beer’s market share. This means that AB InBev, and other brewers, are eager to hold on to customers as they make the shift from beer to newer products.

Friday Fundings: Plume, Truvian, and Anuvia Plant Nutrients

Connected Home Company Raises $270 Million

Plume, a software platform that helps users run their connected homes, just raised $270 million in a Series E round led by Insight Partners. The company’s valuation is now $1.35 billion.

Plume’s platform helps curate services in people’s homes, like motion sensing, parental controls, and optimum Wi-Fi. The work from home boom has caused demand for Plume’s services to surge. The company currently provides services to about 22 million households—up from 20 million in December 2020. With its new funding, the company plans to grow its workforce, gain new customers, and invest in developing new products.

Truvian Raises $105 Million for Blood Testing

Truvian, a blood testing startup, raised $105 million in a Series C round. The company is building a blood analyzing tool, which it hopes to present to the FDA for clearance by the end of the year. The device can run 36 common tests like blood count, kidney function, and glucose levels.

Like other healthcare startups, Truvian has attracted investor interest during the pandemic. But some investors are wary of the blood testing sphere after the rise and fall of Theranos, a startup which defrauded investors and claimed it could run tests on a single drop of blood. However, many investors see Truvian as very different from Theranos because it is seeking regulatory approval at every stage of its development.

Sustainable Fertilizer Maker Secures $103 Million

Anuvia Plant Nutrients is a startup developing sustainable, bio-based fertilizers from materials like livestock waste and food waste. The company recently secured $103 million in a Series C round co-led by TPG ART and Pontifax AgTech.

Investor interest in agricultural technology has surged over the past five years. Since 2015, venture capitalists have put roughly $15.7 billion behind agricultural technology (or agtech) companies worldwide.

Anuvia plans to use its new funding to improve its Florida production facility and form new partnerships with farmers and companies around the world. Anuvia’s products are already used on some US farms. The company hopes to have its fertilizers used on 20 million acres of farmland by 2025.

Not-So-Breaking News

  • After GameStop CFO Jim Bell’s alleged ousting, shares of the video game retailer soared 104% before trading was halted. At the end of the trading day yesterday, GameStop was up about 19%.
  • Autonomous trucking company TuSimple filed to go public and plans to begin trading on the US stock market as early as March. The company has received hundreds of millions of dollars in funding from US freight-hauling companies and Chinese investors.
  • After an $81 billion auction for the license to use airwaves that are important for 5G, the Federal Communications Commission announced results. Verizon (VZ) was the top bidder, followed by AT&T (T). Both companies will have access to the important airwaves as they build their 5G networks.
  • Best Buy (BBY) beat expectations with its Q4 earnings report, but its revenue was worse than expected. The company’s sales surged at the beginning of the pandemic as people purchased supplies to work and study at home, but that growth has dropped off.
  • Papa John’s Pizza (PZZA) shares fell yesterday after the company missed earnings estimates. Though its sales climbed during the quarter, higher food costs and employee bonuses weighed on the restaurant’s bottom line.
  • Overspending happens to the best of us, so let’s talk about a few ways to get back on track after going over budget.

Financial Planner Tip of the Day

“You may not be able to completely reform an overspending habit overnight. But by tracking your spending, setting up a basic budget, and altering some of your everyday habits, you may soon be able to gain control over your financial life, and start reaching your short- and long-term savings goals.”

Brian Walsh, CFP® at SoFi

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