General

Top 5 stories of the week: Could this be the end of Netflix?

Ben Weiss, Friday, 13 September 2019

Weekly Review Netflix

It’s cheaper. It already features some of the world’s top movie stars. And it’s going to be immediately available in over 100 countries. The full plans for Apple TV+ were announced this week and it sounds impressive. So, could this be the end for Netflix? Elsewhere, WeWork’s path to its highly anticipated IPO has hit a considerable block, while Facebook’s Libra has faced yet more criticism. Here’s the highlights from the last week.

WeWork IPO delayed?

WeWork’s IPO has been long-anticipated, but despite the news earlier on in the week that JP Morgan secured the lead role in the process worth an estimated $122 million, latest updates now suggest that there could be a delay in going public.

Major shareholder, SoftBank, a Japanese firm that owns approximately 30% of the WeCompany, advised their partners to rethink the $47 billion valuation that they had put on the company. It explained that this was their estimation at the time, and that external investors might not see things the same way at the time of the IPO.

A new valuation as low as $15 billion has now been cited, after there have been signs of weak demand from investors. Part of the problem is also said to be the power that founder and CEO, Adam Neumann, had over the company in terms of voting rights. It might be enough for the IPO to go ahead after all, and a lower valuation may even help the WeCompany avoid a disastrous debut on the market like Uber and Lyft experienced previously.

Whether it will happen in 2019 or the beginning of next year, make sure you’re ready for WeWork’s IPO – here’s everything you need to know.

WeWork

Is this the end of Netflix?

The end of Netflix is nigh.

Apple released its iPhone 11 this week, but despite spouting promos about improved battery length and enhanced camera functionalities, it failed to steal the spotlight. Why? Because Apple announced something bigger. Something more headline-catching than the 100-something edition of the iPhone with a battery that will last ten minutes longer than its predecessor. A streaming service that aims to target the likes of Netflix and Amazon Prime.

Bulls were in town as Apple’s share price rose. But this venture has thrusted the company’s proverbial neck thoroughly on the line. This is not a small project - $6 billion has been spent by Apple. Get it wrong, and the consequence could be devastating. Get it right, though, and they could be on the way to dominating yet another sector.

13 SEP Apple

With Netflix so established in such a tough industry, it will be hard to knock it off its perch. But if anyone can, Apple can.

SEP Netflix

Eurozone bolstered by EU stimulus

Everyone’s favourite central bank, the ECB, was back in action this week, as the eurozone’s monetary committee met to address recent recession fears in its monthly meeting.

The main stimulus measure they implemented was quantitative easing. A total of 20 billion euros will be pumped into the economy, offset by debt from 1 November in an attempt to re-energise the eurozone. Fears that the ‘engine’ to the European economy, Germany, was entering a recession has hindered the eurozone as a whole, with uncertainty coursing through the markets – not helped, of course, by the B word.

The Dax experienced volatility as the ECB’s decision was announced. The index is a main reactant to eurozone news, given Germany’s contribution to the European economy.

Libra faces French block

Facebook officially announced its plans to launch Libra, its own cryptocurrency, back in June… and it had people worried. A number of authoritative parties have since come out to denounce its viability, including President Donald Trump and Fed Chair Jerome Powell, and now French finance minister Bruno Le Maire has said France will block any development of the crypto in Europe as it’s a threat to the monetary sovereignty of nations.

It’s not all one-way criticism of Libra though. A number of huge firms have already announced their support and are on board with implementing Libra once released.

While it’s true that countries may lose sovereignty over their own currency, that will only happen if Libra is more efficient and scalable than other currencies. If that’s the case, then is it necessarily a bad thing that Libra will take over? Who even allowed France to speak for the whole of Europe anyway?

Strikes cost BA £80 million

British Airways pilots completed a two-day strike earlier on this week in what was said to cost the company £40 million per day. They were protesting against, what was seen as, insufficient pay rises. Currently, wages for BA pilots range from £25,000 - £200,000 depending on experience.

Further strikes are set for next month, but given the chaos caused this week, BA will look to avoid them at all cost. It’s always hard to tell the impact BA has on the markets, with it being a part of the International Consolidated Airlines Group which also owns the likes of Vueling and Iberia. However, it’s likely that the markets had already priced in the cost of the strikes, as they were planned well in advance.

It might be one to watch out for next month, though, if a resolution isn’t met before the 27 September, as it’s highly likely the second set of strikes have not been priced in.  

 

 

 

Share article