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A bevy of billionaires — the inheritors of the Walton family fortune — announced plans Tuesday to launch their own music and art festival. According to the organizers, the Walmart heirs’ hometown of Bentonville, Arkansas is in for a makeover as a go-to place for culture, in the vein of Texas' Austin City Limits or Tennessee's Bonnaroo. The new must-visit event will be known as FORMAT (For Music + Art + Technology).
Clearly, after Miles Davis himself, if anyone personifies the archetype of cool, it’s the billionaires who own America’s largest big-box retailer. | | | • | | Netflix lost subscribers in the company’s latest shocking stumble. | | • | | Blackstone spends $13 billion on a giant stake in the student housing market. | | • | | Chipotle is boosting its tech investments. | | | | |  | Streaming | Netflix Loses Subscribers in Latest Streaming Drama | | Two years ago, Netflix was on top of the world. Public health restrictions turned binge-watching into a popular endurance sport, earning the streaming giant pandemic darling status and 37 million new subscribers in 2020.
All of that ended in a reversal of fortune worthy of Seinfeld (now streaming on Netflix, thanks to a $500 million deal in 2019). On Tuesday, the company reported its first quarterly subscriber loss since 2011, falling shockingly short of its own forecasted gain of 2.5 million subscribers. | Turn On, Tune In, Drop Out | | Even before Tuesday’s result, Netflix’s stock performance so far this year has been as unrelentingly grim as David Fincher’s FBI procedural Mindhunter. Shares were already down over 40% year-to-date, after 2021 saw the company add less than half the new subscribers it drew in 2020. The troubling trend revved up in the first quarter of 2022, with Netflix losing 200,000 subscribers. The result: a revenue miss, with its $7.87 billion generated falling short of analysts’ projections of $7.93 billion.
The news rippled throughout the streaming world. Netflix's stock tumbled 26% after the bell on Tuesday, erasing $40 billion in stock market value. Roku fell 6%, Walt Disney 5%, and Warner Bros Discovery 3.5%. And, like each consecutive season of House of Cards, Netflix's future is primed to get worse. The company now says it expects to lose another two million global subscribers in the current quarter. For its part, Netflix blames a multitude of outside forces: | • | | Shuttering its service in Russia following the nation’s invasion of Ukraine led to 700,000 lost subscribers, Netflix said. Excluding that impact, the company would’ve gained 500,000 subscribers, still two million shy of projections. | | • | | Competition from other streamers like HBO Max and Disney+ ate into Netflix’s market share. But perhaps not as much as its own users: the company estimates 100 million nonpaying households use shared passwords held by one of its 222 million paying customers, something it plans to crack down on. | | | | Quality Control: Netflix has been criticized for pumping out as much generic content as possible to win eyeballs. For example, action movies The True Memoirs Of An International Assassin and The Last Days Of American Crime have the dubious honor of a 0% score on film review site Rotten Tomatoes. Executives said Tuesday improving quality is a priority while, at the same time, chief financial officer Spencer Neumann noted the company will be "pulling back on some of our spending growth." Netflix was previously slated to spend $17 billion on content this year, up 25% from 2021.
Ad to Your Favorites: Co-CEO Reed Hastings, previously an opponent of streaming ads, said a low-cost version of Netflix with ads, something rivals HBO Max and Disney+ have already rolled out, may be on the way. Streaming video ad revenue grew 51% last year to $39.5 billion, according to the Interactive Advertising Bureau. | | | | | | Real Estate | Blackstone Drops $13 Billion on Student Housing Developer | | Going to college is expensive, said every student in America. Why yes, yes it is, replied US investment giant Blackstone, which knows a good business opportunity when it sees one.
On Monday, the private equity giant agreed to acquire American Campus Communities, the country’s largest developer and owner of student housing, for $12.8 billion. It’s a big bet that there’s plenty of future money to be extracted from student loan-backed youngsters in need of a place to crash between nighttime keggers and the next morning’s ENGL 430: Literature of the Middle Ages class. | Dorm Wars | | New York-based Blackstone, which also made multibillion dollar acquisitions in apartment and single-family home rentals within the last year, first dipped its toes into the student housing market in August, when it bought a majority stake in eight student-housing properties for $784 million.
Along with competing asset managers like Brookfield, it’s offering decked out student housing, with luxuries including gaming rooms, state-of-the-art gyms, swimming pools, and super fast Wi-Fi — all the things one needs to stay sane during finals week. Monday’s big purchase looks smart because, while college enrolment is falling, student landlords are doing just fine: | • | | As of December, students at 200 post-secondary US institutions tracked by real estate data firm Yardi Matrix paid an average monthly rent of $791 per bedroom for housing, up 2% year-over year. And they’re signing up early to do so: 94% of rooms were pre-leased — up 5.2% year-over year. That’s despite a 6.6% decrease in undergraduate enrollment in the US. | | • | | American Campus Communities, which made roughly $35 million in net income on $940 million in revenue last year, gives Blackstone a whopping 166 properties in 71 university markets, including Arizona State and the University of Texas at Austin. Blackstone’s purchase price of $65.47 per share gives ACC shareholders a 14% premium over Monday’s closing price. | | | | How They Do It: Blackstone uses subsidiaries Blackstone Real Estate Income Trust (BREIT) and Blackstone Property Partners to buy real estate, because, unlike the firm’s main private-equity funds, they can hold on to properties as long-term investments. | | | | | | SPONSORED BY startengine | Feeling Bull-ish? Check Out This Rare Offering | He’s the most successful Bull of all-time. No, not Warren Buffett or Bill Ackman — we’re of course talking about Michael Jordan. According to Axios, sports cards have consistently outperformed the PWCC 500 Index (essentially the S&P 500 for trading cards) over the last 12 years. With StartEngine, you can diversify into marquee collectables like this Jordan Fleer Rookie Card that are virtually impossible to find elsewhere: | • | | Available exclusively on this platform, this card is in mind condition — graded a PSA 10 — the highest possible rating. | | • | | There are only a fixed number of such cards in such condition, which is why analysts consider this card a barometer for the entire sports card market.* | | | | | | | | Restaurants | Chipotle Launches $50 Million Venture Fund for Restaurant Tech |  | | In the 1960s, General Motors revolutionized its automobile assembly lines with automated robotic arms. Now, a wave of tech innovation is coming to the most critical assembly line of the 21st century: the burrito line.
On Tuesday, Chipotle announced a $50 million venture fund as a vehicle for investing in food service technology startups. | Quesadillas Ex Machina | | Dubbed Cultivate Next and managed by company CTO Curt Garner, the fund will target tech startups in the early “seed to Series B” stages of their life cycles, and could touch every piece of the burrito pipeline, from agriculture to ingredient tracing and tracking to point-of-sale systems.
While Chipotle’s embrace of tech is hardly beating competitors to the soda fountain fruit punch — with every quick-service restaurant, from Starbucks to Yum Brands’ Taco Bell and KFC investing in tech such as digital ordering and AI-powered customer relationship platforms — the popular Mexican chain boasts a long history of experimenting with new-age solutions: | • | | In March, Chipotle introduced the tortilla chip-producing ‘Chippy’, an AI-driven kitchen assistant created by food-service automation startup Miso Robotics. Last year, Chipotle invested in Nuro, a startup commanding a fleet of delivery robots. | | • | | Of chief importance (and on the significantly less flashy sci-fi side), Chipotle tripled down on its app and online order capabilities, with the option now routinely accounting for roughly 50% of all sales. In December, the chain opened its first takeout-only digital ghost kitchen in Cuyahoga Falls, Ohio. | | | The Robot Revolution: Like it or not, restaurants are increasingly replacing human workers. A 2020 report from restaurant consultancy Aaron Allen & Associates projects over 80% of restaurant jobs could eventually be automated. While a robot cook is a lot less likely to slip you a free serving of guac, here’s hoping AI can finally help Chipotle crack the code for tasty queso. | | | | | | Extra Upside | | | • | | The US is getting its first electric luxury Mercedes SUV. | | | | | | | | |  | Just For Fun | | | | | Written by Sean Craig and Brian Boyle. | Disclaimer | | | *Please note that these are historical returns for the sports card market as a whole, based on research conducted by PWCC, and do not reflect the value of, or potential returns on this individual collectible. This Reg A+ offering is made available through StartEngine Collectibles Fund I, LLC. No broker-dealer or other intermediary is involved in this offering. StartEngine Collectibles Fund I, LLC is not currently accepting investments from WA, NJ, FL and TX. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. Please see the offering Offering Circular and Related Risks for more information.
*The preceding post was written and/or published as a collaboration between The Daily Upside’s in-house sponsored content team. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. The Daily Upside may receive monetary compensation from the issuer, or its agency, for publicizing the offering of the issuer’s securities. This content is for informational purposes only and is not intended to be investing advice. This is a paid ad. Please see 17b disclosure linked in the campaign page for more information. | | | | | No longer want to receive these emails? Unsubscribe here. Copyright © 2022 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, NY 10065 | | | | |
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