Spotify has 500 million monthly active users, yet the business model economics are far from proven. It doesn't help to grow users without any regard for profitability, or all that is happening is that the losses are getting bigger! In our research, we delve into both the strategic drivers and the key trends in ARPU and gross margin to arrive at our conclusion. Spoiler alert: we are bearish.
Use the podcast player below to listen to our discussion on Comcast and its Q4'22 result, which accompanies the detailed write-up below: (Date of report: 9 March 2023) Comcast is a bit like the love child of AT&T and Disney, with a traditional cable broadband business making most of the money that funds the management team’s adventures in the media industry. Reading back into the history of Universal Film and NBC shows just how significantly media has changed in the last few years, as for decades it was all about the initial growth of TV and radio. Steeped in history, Comcast’s [...]
Use the podcast player below to listen to our discussion on Netflix and its Q3’22 result, which accompanies the detailed write-up below: (Date of report: 27 October 2022) When we recap stocks we’ve previously covered, we usually recap at least two companies in one show. Netflix is an exception, as the model is changing and Netflix is exhibiting the characteristics of a startup. Coupled with exciting recent price action, we felt that there’s been enough interest in this company and movement in the underlying thesis to warrant another standalone podcast and report. Welcome to Netflix: The Sequel! In January, Netflix was [...]
Burgers and fairy tales. These are the things that people like to invest in. No, really. In this episode of Magic Markets, we take a step back and discuss two investment themes that we find interesting. The first is the quick-service restaurant (QSR) industry, which commands premium valuations in markets across the world. There are global giants and regional powerhouses, with examples on the JSE as well as in international markets. We discuss the different types of models followed, along with concepts like franchise vs. corporate-owned models and the benefits of each strategy. We then move on to the art of [...]
Use the podcast player below to listen to our discussion on Hasbro and its Q4’21 result, which accompanies the detailed write-up below: (Date of report: 16 March 2022) Play hard, invest harder! Selling toys is a serious business. There’s far more to Hasbro than plastic Star Wars or My Little Pony toys. With a movie studio and digital gaming business in the group, Hasbro’s toy box is full of surprises. Gaming geeks will be thrilled to learn that the real gem is the Wizards of the Coast business. Magic: The Gathering and Dungeons & Dragons are high margin businesses with cult [...]
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