Netflix KO’d Disney

Also in today’s edition: Enfield needs a kick-start, Eureka Forbes has a US owner, Influencers rake in more than bankers.

Good morning! Elon Musk’s battle with Joe Biden is now evolving into a saga. The entrepreneur, who is under investigation by the SEC for fraud, was asked by a user why Biden hadn’t congratulated Musk on SpaceX’s accomplishment. The Dogefather said the POTUS was probably sleeping. Musk was nodding to the derogatory nickname, Sleepy Joe, former President and failed casino owner, Donald Trump, had given to Biden. Strange times.


The Market Signal

Stocks: Indian benchmark indices began the week with a sharp downturn on the back of weak global cues. The losses were distributed all around as all sectoral indices except FMCG closed in the red, with Metal the biggest drag. The BSE midcap and smallcap indices fell nearly 2% each.

Grande fall: Shockwaves from the imminent collapse of Evergrande, China’s second-largest real estate developer, dampened sentiment across global markets. Its confirmation that it won’t be able to pay the debt obligations due this week (part of its $300 billion debt) is likely to keep real estate and allied sectors bogged down in the near future.


Battleground Emmys: Player Netflix

Yesterday was a landmark day for Netflix. For the first time ever, it registered more wins at the Emmys than any other network or platform. Its 44 awards matched the record for a single year’s wins set by CBS in 1974. Its closest competitors, HBO and HBO Max, and Disney+ scored 19 and 14 wins respectively. Amazon Prime and Hulu won nothing.

The year of the pandemic: This is everything Reed Hastings dreams about. A fully involved audience, critical acclaim, and now being taken seriously at the Emmys. Americans watched Netflix for over 600 hours in 2020. They revisited classics like The Office but watched the new shows too, like The Queen's Gambit, which recorded 11 Emmy wins

Apple TV’s surge: The interesting story beyond Netflix was Apple TV+’s performance. Apple’s streaming service is the latest entrant in the field and its originals are primarily being used as an advertising tool for its products. But it has managed to capture the imagination of audiences through Ted Lasso. Fair play.

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Can Lal Fix A Sputtering Enfield?

Just a month after CEO Vinod Dasari’s exit, Royal Enfield may soon bid goodbye to two more top level executives. This week, the company’s shareholders would also reconsider ‘turnaround man’ Siddhartha Lal as the Managing Director after voting against it at the annual general meeting.

Quitting spree: The two key members are Lalit Malik, the COO since 2013, and Shubranshu Singh, the global head of marketing, who launched two cool models of the Interceptor series. Their exit in the midst of plans to launch some premium bikes could be a big blow to the company.

Silver bullet? Back in 2005, Lal along with his team successfully revived RE which was on the verge of collapse. The company that once beat Harley Davidson in market cap is going through a rough patch again. With low sales, job cuts, delay in its product launch due to the global chip shortage, and his crack team gone, can Lal bring life back to the company once more? If re-appointed.


Shapoorji Pallonji Begins A Sale

The 150-year-old Shapoorji Pallonji (SP) Group is selling Eureka Forbes, synonymous with vacuum cleaners and water purifiers in India, to US buyout firm Advent International for ₹4,400 crore.

The conglomerate with businesses ranging from construction to consumer durables is grappling with a growing mountain of debt as cash flows suffered during the pandemic.

Mounting debt: The total group borrowings were more than ₹25,000 crore at the end of FY21. Earlier this year, the Reserve Bank of India’s KV Kamath Committee, set up to resolve pandemic-induced corporate stress, had thrashed out a one-time debt restructuring which involved a moratorium on loan repayment and sale of key assets to raise ₹10,332 crore.

Family jewels: The assets identified included Eureka Forbes, Sterling and Wilson Solar, Afcons Infrastructure, and land parcels. The deal with Advent is the first in the series.

The Signal

While the storied conglomerate is selling off some of its jewels, it is unable to touch the most valuable asset in its portfolio — the 18.4% stake it owns in Tata Sons. Being a private company, the holding is illiquid and realistically has only one buyer, the Tata group. After a bruising corporate battle between the two groups, SP offered to sell its stake to the Tatas at a valuation of ₹1.8 lakh crore. The Tatas thought it was at best worth ₹80,000 crore. Although last year it raised a ₹1,400 crore bridge loan from Deutsche Bank pledging those shares, it will be difficult to raise long-term debt as lenders would be unable to sell them without Tata Sons’ permission in the event of a default. Tata Sons had converted itself into a private company in 2017.

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TikTok + Financial Advice > Bankers

Wall Street is out. TikTok, Instagram, and YouTube are making the calls now. A generation of financial influencers or “finfluencers” are minting more than Wall Street bankers, making upwards of $500,000 a year.

Wait, what? Millennials and GenZ-ers are turning to social media for easy-to-understand financial advice (like everything else). When one explains Bitcoin using references to Jennifer Lopez, it’s bound to get eyeballs. It’s not just ad money. Broking firms and other financial apps are partnering with these next-gen content creators to drive traffic to their own sites, tapping into a market that was thus far out of reach.

Catapult: The creator economy, especially for financial creators, is at a nascent stage. Well-informed, high-quality content is catching the fancy of a generation eager to learn about how to grow its money. Closer home, finfluencers such as Rachana Ranade and Pranjal Kamra on YouTube have grown even faster than the tearaway Sensex.


Xi Says #NoFilter

Kids below the age of 14 in China will soon only be able to watch 40 minutes of content per day on Douyin, the local version of TikTok. Only between 6 AM and 10 PM at that. Douyin’s “youth mode” restrictions come shortly after China’s crackdown on its videogame industry that set time limits for younger users.

Hit list: Next in the line of fire could be the country’s cosmetics industry, according to experts. Going by China’s restrictions on idolisation and “good-looking” actors, there may be clampdowns on medical aesthetic surgeries that youngsters throng to for improved appearances.

Controlled life: President Xi Jinping has embarked on a “common prosperity” drive that lays down strict guidelines for the country’s businesses and cultural endeavours. The tech, education, and entertainment industries have already seen valuations plummet because of government limitations. As the country expands its definition of what challenges its morals, more industries are likely to meet similar fates.

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What Else Made The Signal? 

Payout: Twitter will pay a settlement amount of $809.5 million to get out of a lawsuit that claimed Jack Dorsey, former CEO Dick Costolo, and board member Evan Williams misled investors about its slowing growth.

Must be jabbed: The US has declared that all foreigners entering the country have to be vaccinated.

Money for startups: Sony is instituting a venture fund worth $200 million for Indian startups, and will co-invest in startups alongside celebrities.

Funding flow: FloBiz, a startup helping small and medium businesses digitise, has raised $31 million in its Series B round led by Sequoia Capital.

Hopping onboard: Used-car platform Cars24 has received $450 million in equity and debt funding led by SoftBank, Tencent, and Falcon Edge’s Alpha Wave Incubation.

Bidding adieu: Didi’s Co-founder and President, Jean Liu, may leave the company amid the possibility of a government takeover.

Vax update: After a five-month hiatus, India will begin exporting surplus Covid-19 vaccines to meet its global commitment. Meanwhile, Pfizer’s clinical trial results show that the vaccine is safe and effective for children between 5-11 years.


FWIW

Bitcoin messiahs: A father-and-son pair in the US is helping people recover “lost Bitcoin” through ethical hacking. The duo retrieves forgotten passwords to Bitcoin wallets.

Box to the top: Manny Pacquiao, Philippine’s boxing star, is set to run for President in next year’s elections. His pitch? He is a fighter “inside and outside the ring”.

Pope star: YouTube is roping in Pope Francis for a feature-length documentary surrounding a critical letter he wrote. It is set to air next year.

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