July 20, 2021
Today's newsletter is 710 words ... 2½ minutes.
The dashboard: S&P 500 closed up 1.5%, nearly erasing that loss yesterday.
- Biggest gainer? Hospital operator HCA Healthcare (+14%) after reporting a big rebound in demand for health care services.
- Biggest decliner? Paintmaker PPG Industries (-4%) as material shortages and higher costs crimped results.
1 big thing: Space business gets billionaire boost
Blue Origin's successful flight is the rising-tide-lifts-all-boats story of the moment for the sector, Axios' Hope King reports.
Why it matters: For investors, it doesn’t matter which billionaire hits space first. Recent headlines only generate more interest, some of which turns into investments — and that's good for companies that need cash.
What they're saying: Sending humans to space twice on largely privately funded enterprises in less than two weeks is unprecedented, Ken Herbert, managing director at Canaccord Genuity, tells Axios.
- The Blue Origin and Virgin Galactic flights “validate what private capital is able to do,” he adds, and their success also points to a safety record that will support public confidence.
- Today’s mission "is likely an indication that achieving access to space can become a more regular event, which means (to my mind), that all of the ancillary companies that depend on space access can also be incrementally more likely to succeed," says Pete Skibitski, senior aerospace analyst at Alembic Global Advisors.
By the numbers: It’s not yet clear how much an individual seat will cost, but Bezos' larger goal is to get millions of people to work and live in space.
- Meanwhile, Virgin Galactic is focused on space travel with ticket price estimates upward of $250,000.
- Bank of America and Canaccord analysts project it will take Virgin at least four years to break even or become profitable.
What to watch: Both Blue Origin and Virgin expect to launch more flights this year.
- So far, investor interest for Virgin has come largely from the retail side, Herbert says, pointing to the stock’s volatility this year as a sign.
- More investment opportunities will materialize over the next two years when about a dozen new companies — including launch vehicle developers and space data companies — will come to the public market, says BofA's Ron Epstein.
2. Charted: Netflix's subscriber slowdown
Netflix added the fewest new subscribers in years last quarter, the company said today.
- Blame that pandemic boost. Growth was bound to slow after Netflix added an unprecedented number of new streamers when the world locked down.
- It lost subscribers in the U.S. and Canada for only the second time since it starting reporting these figures, per Marketwatch.
Be smart, via Axios' Sara Fischer: Netflix said it hoped momentum will pick back up in the second half of the year.
- But that a bounce-back may not be as big as initially expected — or at least not in the third quarter.
3. What's moving
💰 Square is launching small business savings and checking accounts. (Reuters)
- The services come after the payments company was given the OK to open a bank last year. The stock closed up 6%.
👀 President Biden will nominate longtime Google critic Jonathan Kanter to lead the Justice Department's antitrust division. (Axios)
- If confirmed, it would fill a key slot as the administration looks to pursue a raft of cases against tech giants
4. Robinhood pulls back the roadshow curtain
Robinhood wants to lure the retail investors who used its no-fee trading app to set off an at-home trading phenomenon to its soon-to-be listed stock.
- It will livestream part of its roadshow on Saturday, with a presentation and Q&A session with CEO Vlad Tenev.
Part of that may be because it's setting aside a portion of IPO shares for customers. It only makes sense to try to target them directly.
But it's also another example of how the masses are being included in at least some of the process that's meant to drum up demand for its shares among bigwig investors.
- Flashback: Coinbase traded a traditional roadshow for a Reddit Q&A — and explainer videos — ahead of its direct listing.
What’s next: Robinhood is expected to begin trading next Thursday.
5. Convenient insurer perk: Peloton
UnitedHealthcare will pay for either a 12-month digital Peloton membership or a four-month "all-access" Peloton membership (each costs $156) for workers who are in a fully insured plan, Axios' Bob Herman reports.
The bottom line: Peloton gets new, subsidized members who hopefully convert to full-paying members, and UnitedHealthcare gets to insure people who are less likely to have expensive or chronic health conditions.
6. What they're saying
“I also want to thank every Amazon employee and every Amazon customer because you guys paid for all of this.”— Jeff Bezos after the launch of the Blue Origin flight. It's the quote that captured the internet today.
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