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Daily Brief 12/4 – Theater Industry Shakedown

Theater Industry Shakedown: On Thursday, AT&T’s WarnerMedia announced its intent to release its entire slate of 2021 movies directly on HBO Max at the same time they hit theaters. AT&T, as is typical for the stock, barely moved on the news.

The real news is the impact on movie theater chains. $CNK was down 21.95% and $AMC was down 15.97% once the headline hit. Adam Aron, CEO and president of AMC Entertainment said in a statement, ““Clearly, Warner Media intends to sacrifice a considerable portion of the profitability of its movie studio division, and that of its production partners and filmmakers, to subsidize its HBO Max startup.”

Source: Koyfin

A Cinemark company rep said “At this time, Warner Bros. has not provided any details for the hybrid distribution model of their 2021 films.” Hard to believe this was such a shock to movie theater operators, but they insist it was. If theater companies are so unprepared for announcements like these, it leads to the question of what their future will look like.

Pfizer vaccine: According to the WSJ, “Pfizer Inc. expects to ship half of the Covid-19 vaccines it originally planned for this year because of supply-chain problems, but still expects to roll out more than a billion doses in 2021.”

A company spokeswoman said, “Scaling up the raw material supply chain took longer than expected.” Fine, fair enough, this vaccine has been created, approved, and now being mass produced on a light-speed timeline. However, this doesn’t inspire confidence that the vaccine distribution will be completely smooth.

A truck leaves the Pfizer vactory in Belgium.

Famous Short Sellers get it wrong too: Jim Chanos, short selling legend, has been short Tesla’s stock for five very long years. “It’s been painful, clearly,” Chanos said in a Bloomberg “Front Row” interview.

He continues to believe that Tesla’s valuation and business model are absurd, and he’s not wrong. But it’s not enough to be right, your calls have to make money too.

Source: Koyfin.com

Is Tesla an EV company, an autonomous-vehicle company, or a clean-energy play? “It’s whatever people want to believe Elon Musk is touting,” said Chanos, pointing out that Tesla’s five straight quarters of profit are due to sales of regulatory credits rather than cars.

House Approves restrictions on Chinese companies: Per Bloomberg, “The U.S. House of Representatives approved legislation that could ultimately lead to Chinese companies — including behemoths like Alibaba Group Holding Ltd. and Baidu Inc. — getting kicked off American exchanges if regulators aren’t allowed to review their financial audits.”

Few things are as bipartisan in 2020 as anything anti-China. The bill gives a phase-in period with penalties that only kick in after 3 straight years of non compliance, but the intent signals increased hawkishness.

Tweets and Charts we like:

One possible timeline courtesy of the New York Times:

Party like its 1999 in 2020?

US Household debt service as a % Disposable Income at the lowest level in decades – thanks Jay Powell!

Our senators clearly had us at the forefront of their minds

Raise your hand if you expected healthcare to be best performing sector since 1990?

That’s your millennialmkts update! Thanks for reading, if you like this content please consider following this blog and following us on twitter @millennial_mkts

Posts are not investment advice or endorsements.

3 replies on “Daily Brief 12/4 – Theater Industry Shakedown”

Thank you Mahima! Very glad others are enjoying my posts as much as I enjoy posting them. I work in investing and come across many interesting things and I just want to talk about them! I also find documenting my work very beneficial. Thank you for following.

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