Retailers feeling zeen netflix drops in earnings after mitting their mark netflix shares plummeting reporting its biggest earnings since it went public it was 19 short of expectations netflix all important was anticipated. Looking ahead to next year, netflix is looking at tough comparisons. Sorry hopeful ho a note the ceos saying in their letter to shareholders that they remain healthy and engagement per member household was up solidly. That was key that means they shouldnt see any downturn with a growing number of other players, including disney, net flicks has its video call and it starts in about an hour. Julia has the latest. With that call getting under way in about an hour we are in the zone we have the stock reaction, shareholder letter is all we have to trade on one highlight to me, tim, was that they expected it. They talked about it before, that there was pull forward from the back half of the year. Why are we so taken aback here because it is a growth story and priced to perfection i have been out there thinking that netflix was overpriced. I have largely been wrong for a long time. If you look at the year over year subs, they were 6. 8 over a year to the same quarter we have pulled forward a lot of subs, but the growth in a lineal approach to extrapolating where they will be is disappointing. Hastings has done a good job with the linear followup tv they are happy, bring on the competition. I think the real question is cash burn. They have gone out of their way to buy content at any price. You see that in cash flow. Do they have Pricing Power yes, more original content, more engagement than ever, but can they raise prices because otherwise i think it will be difficult on profitability in the shortterm we have seen in Free Cash Flow for the past two quarters has been helped by the fact there hasnt been any production so their costs have been lower they have talked about 2021 and the impact, expect the Free Cash Flow to be negative to 1 billion, so that comes back into play immediately it is amazing that a company has had this much success and here we are talking about break even, like that is so great. However, to tims point about cash flow and Pricing Power, i think the Pricing Power story is part of what the bulls hang their hat on which makes sense, but when they talk about the competition, you have to wonder how many dollars per month are people willing to spend and how do they divide that against all of the competition, so therefore does netflix lose some of their Pricing Power . For Many Companies and this one in particular, you have to listen to the call i would be hesitant to trade it in the after market now. There is a lot of color we want to hear from them. They often underpromise and overdeliver in a lumpy kind of way, over time they have had several bad quarters i would wait and hear what they have to say before i panic and sell it if i am a longterm believer i wouldnt short it. Should we be concerned about competition or does that metric which they made so much of, the engagement of household, guy, address that issue, that households love netflix, they are Binge Watching i have been going right through the cobra kai. You can see the excitement in my eye. Come on i am serious. Only if Ralph Macchio is going to be back in it he is in it, by the way there you go. Even more of a reason for season 3 to be a blockbuster. We have seen this 475, 560 range for a while. I thought we would blow through the alltime highs, but this is where we were. This 495 is where we were at the end of september it has been doing this dance between 480 and 560 for the last six months this is still a record year for sub adds for netflix which probably the price is taking that into consideration. I think its netflix and everybody else i will say that again. I think netflix has set the bar and i think they have a decade head start on everybody else what about your take on the quarter given the stock has moved down 6 . I would have guessed that guy would have said double topee or triple topee i saw those as good resistance and this month it reached 572. 489 is your moving day average it tapped that last month as well thats important because it hasnt been below these averages for quite sometime if you look at the 200 moving average that goes back to the corona low it hasnt been that level for quite sometime i do believe it is netflix and everybody else, but i look at it this way when we first started talking about streaming, we thought you would have one or two. Now you are going to have probably eight to ten and you will be replacing your cable and have all of these add ones, a 5 one or 10 one i think netflix should raise prices as aggressive as they have because they have a receptive audience you are going to have netflix and prime and everything else, but i think for a host of reasons this is a time to be a seller of tech i think this has been overbought for quite sometime lets bring in gene muenster on the netflix what are the major questions you would have for the netflix management on that call . Amazon, they need to transform. It is not about growing subs nationally or inter nationally my question for investors are how will they transform the streaming business i think they will localize around National Content which has been a strength of theirs. There is not a lot of questions i have for them. The reason is simple the result tonight is an example of why this business is difficult to predict they typically underpromise and underperform and in this case they did not hit the lower goal. I dont think there is anything on the call they could tell me that would change the longer term view. If they would return to prepandemic growth levels, that is an indication for what would be a great business, but not a great stock. When you say evolve the business, what does that mean . It seems like a lot of Media Companies are trying to evolve into what netflix is when you look at disney with the new emphasis on content, and peacock as well. Thats the challenge. They are driving into what is a dead end this is a great service. Consumers get a lot of value for their net flicks subscription, but i am thinking to make money in the business. If you think about google and what they are doing, amazon, what they are doing, apple what they are doing with ai and wellness wearables, these are transformative on our life i dont know what the case is with netflix. I dont know where they go with this the same playbook they have used over the last ten years this has been a 250 billion company, bigger than i thought it would be, but i dont think it will yield the same price appreciation i am skeptical of some the same issues, but the bulls will tell you the foundation of this subbase gives them the ability to flip the subbase at some point. What are your concerns around next years content costs, any thoughts into that i dont think there is a ton of leverage in this business we saw it in previous quarters as far as when they have been cutting back some of the production coston the pandemic they still have a relatively large amount of debt they can have some margin of improvements over time, but i dont see this being a massive Margin Expansion story for the reason that content is king. You cannot pull back on that content spending i think probably the most bullish part of this netflix story is that the logical investor would say that its run its course, that there is i think the esteemed panel today, it sounds like we are largely in agreement, i think the bull case, thats probably the most opt his particular thing on the stock. Gene, good to hear from you netflix closed in the after hour session lower karen . If netflix is a decade ahead and still doesnt make money, these other competitors will have to drop off if they cant afford the content cost. Maybe thats one benefit snap is another big mover. Lets get back to julia who has the details. Snap soaring on better than expected results with revenue growing twice as fast as expected a profit of 1 cent per share rather than the 5 cent per share loss anticipated they far surpassed the 4 million to 6 million that snap forecast for quarter three. They point to covid pushing advertisers to try snap. The augmentation has happened faster than imagined we feel well positioned to execute on opportunity ahead snap says Fourth Quarter revenues growth as much as 50 is attainable. And expect year after year to double they look for a 50 increase in time spent watching shows on snap some other social stocks on the move face book, pintrest, twitter moving higher after hours. Not just that these are social stocks and you waste a lot of time on these platforms but snap was the first to advertise and the other ones use the advertising dollar as well can we extrapolate snap to some of the others . I think you can, but in the case of snap they are getting some derived benefit from this massive investment they have made talking about a 20 year over year growth cycle. These Revenue Growth numbers are far in exset of what we are seeing thats obviously the top line advertising is built into that yes, these are good trends and better than social media might have been expecting. Facebook back in june said it was resilient. I dont think this has been a recycle boom for anyone in the Media Business social media, too. I think a lot of this is snap on its own giving a better result than expected. And it has been surprising over the last three quarters. When you see a stock pop up or down 22 on earnings, in this case up, they are caught offguard kudos to them. They labeled who are the key players in the digital ad space. It was snap and facebook they are weary of twitter monotizing but with snap they dont have the judiciary committees that facebook and twitter will have soon every one got on the wrong side of the boat. When corona hit what was the thirst thi first thing every one thought would be cut advertising. But with the kids off they are more and more into it. But that being said i would not be a buyer guy, if you were a believer that advertising dollars float into all of these platforms in the third quarter, where are they coming from the pie is only so big do we assume that broadcast tv, cable tv are the platforms losing out its interesting. My pushback would be we have been pretty bullish on snap for a while and said that some of facebooks problems would lend itself for snap to crawl out from under the thumb of facebook that has proven to be the case you look at average revenue peruser in north america was 4. 39 that is a staggering number. They are running their business better i would encourage folks of the interest to go back and look at Evan Spiegels first Conference Call which was an absolute disaster, but ever since then they have figured it out good for snap. I would be inclined to see why you would take profits i would be inclined to stay with snap i think they have figured it out at least since it was a 17 stock back in january. The return of sports was a big thing for snap coming up, we will break down the after hours action of texas instruments. The number one biotech analyst joins us for an update othn e race for a cure. Much more fast money straight ahead. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. Expectand action. 16 people died did he catch our bad guy . Were know as the charmed ones. You got one day to show me what you got. I want to fight. You need us harry. What a goal bockey ball, hockey ball, you name it ball. Im gonna be ready. Just say show me peacock into your xfinity voice remote or download the app today. Welcome back we have after Hours Movement in texas instruments. I caught up with mitch over at rbc he calls this a solid q3 results. He says executives on the call say revenue is higher than expected. They call that a notable rebound in automotive returning to levels similar to a year ago they also called out personal electronics. We know people are buying tablets. Industrial down, low Single Digits so about even to a year ago. Applying to Strong Aerospace weak executives say they remain cautious as the broader effects of the pandemic could continue for a year guy the only problem with texas instruments, a great quarter love josh lipton he is the man. With that said, 26 times next years numbers, even if they earn 6, thats not a cheap stock. Amd probably has more Growth Potential and qualcomm is probably cheaper and has more potential. Just because he led me down the path, when i look at texas instruments, you look at the stocks index of semiconductor. Texas instruments underperformance, up about 17 yeartodate everyone has been favored at one point in time. I think that one is so overdone. Up about 138 but you have ai, nvidia, everything under the sun there is a lot under the chip plays. We think we are watching and witnessing, the laggard ones that havent performed i think you will see nvidia come in with techs in, you are starting to see a late inning game where they are catching up and not close to catching up you were talking about the pull forward effect in terms of netflix. Would there be a pull forward effect in terms of these chip stocks in terms of how many pcs, tablets, cars, am i going to buy outside of whichever quarter they are produced . Texas instruments is conservative a year ago they were giving guidance and two years ago that weighed heavy on the chips i think if anything this is positive for intel which reports on thursday which has not been outperforming. It may have secular issues, but in the ones that texas talks about being bullish, i think this is a good shine thats my interpretation but, yes, i think we have had an extraordinary period of Electronic Device pull forward lets soar where it goes uber trade is arriving next and gm says go big or goom he. What the company is unveiling tonight. Flexshares may look simple on the outside. But inside every etf. There are untold hours of careful construction. Infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. For a prospectus containing this information. With this seal, this restaurant is committing to higher levels of cleanliness. The expertise that helps keep hospitals clean, is helping keep businesses clean too. Look for the ecolab science certified seal. That selling carsarvana, 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. Welcome back uber cruises higher. Details . They said a recovery is being led by asia. They said on the work of the classification battle in california, uber is looking at what their business could look like if they lose that ballot issue and have to reclassify drivers as employees costs would increase by 25 to 100 he said the size of the business would be a question mark in california that backs away from the notion uber could leave the state entirely if it doesnt go their way. On the other hand, it could set the tone for other states considering similar moves making uber looking less like a tech company and more like a taxi company. He said he has scaled back on ambitions and considering a new regulatory landscape as would have been unthinkable in another ear raw. Its market cap around 64 billion may reflect that investors are giddy over the fact uber may not leave california and that by hiking prices they have narrowed the difference in rides between uber and taxi rides perhaps they are filling that gap and getting paid more for it there has been such a focus since they went public at delivering profitability, perhaps at the expense of longterm ambitions. They recovered in asia so perhaps they will recover here also, uber has made this pivot towards food delivery away from ride sharing what do you think about these comments from the ceo . I think he talked about profitability in 2021 which may be part of what moved the stock. I cant help but wonder, lets say if they have to increase prices dramatically, i dont know that uber rider will ride no matter the price. California remains a question mark i am not as excited about the delivery business. I think management is fantastic, but i dont love the business or valuation at this point. The price increase could be up to 20 to 40 above prices in the large cities in california and up to 100 in the small cities in california if you are a consumer and that discount for an uber ride goes away you are oldfashioned, you probably go outside and hail a taxi yourself. Thats why you wait a long time for those yellow cabs to come by. They obviously have done study on this and believe they can put those increases in place and not have a huge disruption i am not sure of that in california uber has outperformed lyft i would be inclined to sell uber and buy lyft were you a fan of bo jackson back in the day . Crickets. I say that because i dont know who yes, you do know bo knows sports. We should make tshirts. Great nickname by nathan, but great job by debo. She knows. We have an outstanding San Francisco viewers. We will get a full report on what to expect later and major flex from kohls what they announced today. Were excited to do business with you but before we sign i gotta ask. 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