TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<ul>
<li>Across the board miss as DTC losses peak, park margins weaken, and linear likely to fall off a cliff. </li>
<li>Big FY2023 guide down on revenues (HSD vs. LDD previously) and OI growth (HSD vs. ~25% consensus previously). </li>
<li>Disney profitability lower for longer as macro headwinds on parks, accelerating cord cutting, and pushed out D+ profitability means OI likely down $2B in both FY23-24.</li>
</ul>


Across the board miss as DTC losses peak, park margins weaken, and linear likely to fall off a cliff. 
Big FY2023 guide down on revenues (HSD vs. LDD previously) and OI growth (HSD vs. ~25% consensus previously). 
Disney profitability lower for longer as macro headwinds on parks, accelerating cord cutting, and pushed out D+ profitability means OI likely down $2B in both FY23-24.


Disney 4Q2022: Cord Cutting Exacerbating DTC Losses

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on the 17 October, <strong><a href="https://www.smartkarma.com/entities/news-corp" target="_blank" data-smartkarma-citation="entities:26926:1" rel="noopener">News Corp (NWS AU)</a></strong> announced it had begun exploring a potential combination with <strong><a href="https://www.smartkarma.com/entities/fox-corporation" target="_blank" data-smartkarma-citation="entities:36135:1" rel="noopener">Fox Corporation (FOXA US)</a></strong>.</li>
<li>A merger of two parts of Rupert Murdoch’s media empire would combine Fox News and TMZ assets with NWS’ newspaper and online news operations.</li>
<li>Murdoch split his empire in 2013, placing the print business in a newly created NWS, and the TV and entertainment under Fox,</li>
</ul>


Back on the 17 October, News Corp (NWS AU) announced it had begun exploring a potential combination with Fox Corporation (FOXA US).
A merger of two parts of Rupert Murdoch’s media empire would combine Fox News and TMZ assets with NWS’ newspaper and online news operations.
Murdoch split his empire in 2013, placing the print business in a newly created NWS, and the TV and entertainment under Fox,


News Corp (NWS AU)'s Proposed Merger With Fox Corp. Again.

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Private Capital Markets

UBTech Robotics / Private Capital Markets

<ul>
<li>UBTech Robotics is a pioneer in AI and leader in intelligent humanoid robots. The company commercialized robots for consumers with a mission to deliver the affordable robot to each family. </li>
<li>UBTech Robotics has raised ~$940M in equity financing and closed an $820M Series C round in May 2018, the single largest funding ever for AI private company.</li>
<li>We were impressed by healthy growth at scale, diversified business lines, core AI and robotics technologies, and strong partnerships with Tencent, Apple, and Walt Disney. </li>
</ul>


UBTech Robotics is a pioneer in AI and leader in intelligent humanoid robots. The company commercialized robots for consumers with a mission to deliver the affordable robot to each family. 
UBTech Robotics has raised ~$940M in equity financing and closed an $820M Series C round in May 2018, the single largest funding ever for AI private company.
We were impressed by healthy growth at scale, diversified business lines, core AI and robotics technologies, and strong partnerships with Tencent, Apple, and Walt Disney. 


UBTech Robotics: China’s Global AI and High-Tech Robotics Unicorn

<ul>
<li>Netflix's stock has outperformed the market by 25% over the past quarter on faith that the new advertising tier will unlock the next leg of the growth narrative. </li>
<li>3Q22 had two of its biggest hits ever - Stranger Things and Dahmer, Netflix beat its own guidance of 1M by only 1.4M...APAC added 1.4M, most from low ARPU India</li>
<li>Pulling subscriber guidance is a yellow flag, as is the lack of details on how AVOD will be "neutral to positive" over time. </li>
</ul>


Netflix's stock has outperformed the market by 25% over the past quarter on faith that the new advertising tier will unlock the next leg of the growth narrative. 
3Q22 had two of its biggest hits ever - Stranger Things and Dahmer, Netflix beat its own guidance of 1M by only 1.4M...APAC added 1.4M, most from low ARPU India
Pulling subscriber guidance is a yellow flag, as is the lack of details on how AVOD will be "neutral to positive" over time. 


<ul>
<li>Netflix has had a slew of upgrades recently on bullish estimates for its coming advertising supported tier...with the upgrades buying into Netflix's exorbitant CPM demands.</li>
<li>We think advertising supported is revenue accretive for the US and Canada, but question how this works out internationally.</li>
<li>Disney is far better positioned for AVOD. It has a developed ad infrastructure, owns all its content, and has better brands to sell advertising against.</li>
</ul>


Netflix has had a slew of upgrades recently on bullish estimates for its coming advertising supported tier...with the upgrades buying into Netflix's exorbitant CPM demands.
We think advertising supported is revenue accretive for the US and Canada, but question how this works out internationally.
Disney is far better positioned for AVOD. It has a developed ad infrastructure, owns all its content, and has better brands to sell advertising against.


Ad-Based Streaming: Are We Sure This Is Netflix's Panacea (Or Disney?)

United States

The Walt Disney Company is an entertainment company that conducts operations in media networks, studio entertainment, theme parks and resorts, consumer products, and interactive media. The Company produces motion pictures, television programs, and musical recordings, as well as books and magazines.

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The Walt Disney Co (DIS US)

Disney 4Q2022: Cord Cutting Exacerbating DTC Losses

Disney shockingly weak profitability outlook for FY2023 is more a reflection of the return of cord cutting to being issue #1 denting the model,...

Aaron Gabin

News Corp (NWS AU)'s Proposed Merger With Fox Corp. Again.

The merger remains very much in the exploratory stage. NWS is trading rich from a historical point of view Without the benefit of clarity on a...

David Blennerhassett

UBTech Robotics: China’s Global AI and High-Tech Robotics Unicorn

Tencent-backed UBTech Robotics is one of the key players in the global consumer robotics market, which is expected to reach ~$94B by 2028, growing...

Andrei Zakharov

Netflix 3Q22: Coast Is Clear?

Netflix's stock has outperformed by 25% over the past quarter on blind faith that the new advertising tier unlock incremental subs and margins. We...

Aaron Gabin

Ad-Based Streaming: Are We Sure This Is Netflix's Panacea (Or Disney?)

Aince last quarter’s earnings Netflix is up 18%, outperforming the S&P by nearly 23%. 4 recent upgrades share the thesis that ads will stimulate...

Aaron Gabin

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