Tech stocks and the beleaguered Nasdaq jumped today in a rally led by streamers Spotify, Netflix and Roku. All have seen their shares pummeled, with Netflix in particular being hit by disappointing subscriber numbers last quarter and Spotify embroiled in a Joe Rogan controversy.
Spotify is up 12% at $193, Netflix by more than 10% at $493 and Roku nearly 7% (at $161). The broader Nasdaq, which entered official “correction” territory in Jan. – defined by a dip of at last 10% – is up by 2.63%.
Netflix shares were stomped after its fourth-quarter earnings, plunging over 20%. Votes of confidence in the form of share purchases by Bill Ackman’s hedge fund Pershing Square and by founder and co-CEO Reed Hastings, who bought on the dip, helped the shares rally. Then Citigroup analyst Jason Bazinet upgraded the stock to “buy” this morning. He told CNBC that the current price, which has come down from a $52-week high of $700 in the fall, basically builds in zero subscriber growth. Edward Jones also upgraded Netflix from “hold” to “buy.”
Citi upped Spotify to “buy” as well. The music streamers shares are way down from their 52-week high of $387, roiled recently by an artist backlash to its lucrative Joe Rogan podcast for the ex-Fear Factor host’s take on Covid-19 vaccines. Neil Young and Joni Mitchell pulled their tunes off Spotify last week to protest what Young calls Rogan’s “vaccine misinformation.” CEO Daniel Ek said Spotify would add content warnings and disclaimers to the streaming service. The Joe Rogan Experience host said he was sorry the musicians left and at not “having more experts with differing opinions right after I have the controversial ones.”
Backlash by or against artists or content, i.e Netflix with Cuties or Dave Chappelle, usually blows over without a lasting impact on company economics or shares. Spotify reports quarterly earnings on Wed. and Ek will certainly be asked about the controversy.
Snap and Fubo are up respectively 5% and 8%. Twitter, Amazon, Faceook, Apple and Google parent Alphabet are all well in the black. Facebook reports earnings Wed., Amazon and Snap are next week.
Markets have been rattled by the prospect of higher interest rates, technology stocks in particular – the companies are valued heavily on expected future earnings, which would be pressured by higher rates.
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