🎙️ The Podcast Bubble is Bursting

MARKET UPDATE

Good Morning Investor! Shares of behemoth drugmaker Eli Lilly ($LLY) surged 2.6% in pre-market trading off the news that an FDA advisory panel unanimously endorsed its new Alzheimer's drug donanemab, paving the way for full regulatory approval later this year. Meanwhile, struggling streaming company Paramount ($PARA) saw its shares tank over 7% after news emerged of its merger deal with Skydance falling apart.

TODAY’S BIG HEADLINES

The Podcast Bubble is Bursting

Southwest Airlines vs Activist Investors

Bitcoin and Ethereum ETF inflows are Surging

MEDIA & STREAMING

The Podcast Bubble is Bursting🎙️

Start Rolling: Remember the days when podcasts seemed to take over the world faster than avocado toast? Every influencer worth their blue checkmark had a podcast, and some of these audio adventures even landed exclusive deals with big names like Spotify ($SPOT). The king of them all? Joe Rogan’s whopping $200 million deal in 2020, which made his podcast a Spotify exclusive, drawing listeners by the millions.

• During this podcast gold rush, an eight-to-ten episode series could fetch a dazzling $500,000 deal. Those were the days when podcasters were practically rolling in dough just for chatting into a microphone.

• Fast forward to today, and those glittering figures have taken a tumble, dropping to a more modest $150,000 to $250,000 per series. It’s like finding out the fancy coffee you’ve been splurging on is now just regular joe.

Shifting Focus: Not only have the valuations dropped, but scoring a buyer is also tougher than ever. Streaming platforms are getting pickier, focusing more on profitable projects.

• Landing a deal now involves jumping through more hoops than ever, with lengthy approval processes that dictate what content can or can’t make the cut.

Money Tap is Shut: With budgets tightening, podcast teams are shrinking faster than a sumo wrestler on a crash diet. Over the past 18 months, many shows have had to lay off staff to stay afloat. And even those drastic measures aren't always enough to keep the lights on.

• As the podcasting landscape shifts, we're likely to see more shows going the self-funded route, merging with others, or teaming up to create new media creation and distribution companies entirely.

• When the market is dominated by a few heavyweights like Spotify, Apple, and Amazon, creativity in funding and distribution becomes essential.

AIRLINES & SUPER INVESTORS

Southwest Airlines vs Activist Investors⚔️

A Turbulent Turnaround: Southwest Airlines ($LUV) has been the darling of budget travelers for years, slashing through high fares, bag fees, and seat assignments like a discount superhero. But now, it seems, the low-cost pioneer has a target on its back, and the arrows are starting to fly.

Holiday Wrecker: Southwest may be America’s favorite airline, but financially, it’s not quite soaring. The company’s disastrous 2022—thanks to its outdated infrastructure leading to thousands of canceled flights and billions in losses—didn't help. The airline, which sticks exclusively to Boeing ($BA) 737s, is struggling to grow due to limited plane deliveries.

• Unlike Delta ($DAL) and United ($UAL), Southwest’s commitment to free seating and baggage has kept its revenue on the tarmac.

• This has led to the airline contemplating the removal of its long-standing and accommodative practices such as group boarding, open seating, and “bags fly free”. This could end up backfiring if the company’s existing loyal customer base begins to feel alienated as a result of these changes.

Enter the Arena: Over the weekend, Elliott Management swooped in, buying an 11% stake in Southwest and signaling a revenue-boosting revolution. This activist investor plans to introduce fees for bags, seats, and other services, much to the delight of shareholders, who sent the stock up over 7% on Monday.

• With Elliott Management pushing for a leadership overhaul, they’re eyeing a 77% return for shareholders, potentially lifting the stock to $49 per share.

CRYPTOCURRENCY

Bitcoin and Ethereum ETF inflows are Surging🪙

The Party Goes On: Bitcoin is showing more resilience than a mountain goat on a cliff, holding steady in the $70,000 range thanks to bullish sentiment and a whopping $2 billion in ETF inflows just last week.

• Not to be outdone, little brother Ethereum enjoyed its largest institutional buying spree since March, with big players like BlackRock, VanEck, and Grayscale leading the charge, bolstered by the SEC’s green light on Ethereum ETFs.

Bitcoin Dominance & Altcoin Action: Bitcoin led the inflow parade with an eye-popping $1.973 billion, while Ethereum followed with $68.9 million.

• Meanwhile, basket-like multi-asset products saw $5.5 million in outflows, proving they might need to reconsider their party invitations.

• Smaller inflows were observed in smaller altcoins such as Solana, Litecoin, and Chainlink, each receiving $0.7 million.

• Meanwhile, products which focused on shorting Bitcoin faced outflows of $5.3 million, indicating a shift in market sentiment towards a more bullish outlook.

Driving Force: BlackRock’s Bitcoin Spot ETF is the jewel in the crypto crown, now boasting $21 billion in assets under management, the fastest accumulation of wealth for an ETF ever. With 304,976 Bitcoin under its belt, BlackRock is proving it's the ultimate crypto custodian.

MORE NEWS

Additional market-moving events🌎

Fish Farming Surge: Acorrding to a new report from the UN’s Food and Agriculture Organization, in 2022, a 94 million tonnes of fish were farmed, surpassing the amount caught in the wild for the first time in history. (OK)

Nuclear Bill: Bill Gates-backed Nuclear firm TerraPower has begun construction on a next-generation nuclear power plant in Wyoming, aiming to transform power generation with a sodium-cooled reactor. (APNews)

British IPO Overhaul: The UK is on the precipice of approving the biggest overhaul of its own IPO regime in 40 years. (FT)

Retail Comeback: The retail apocalypse appears to be coming to an end as shopping center vacancy rates hit a two-decade low. (NYTimes)

OUR PICKS

Our selections performance👾

On Monday the 11th of March, we released our “two superperformers” stock picks which we believe will provide significant outperformance compared to the S&P 500. Then on the 10th of June we released our next stock selection.

Here’s how the three stocks have performed since:

• Evolution AB: 1,114.00 SEK (📉-15.12%)

• Hims & Hers Health: $22.04 (📈+52.32%)

• PayPal: $64.77 (📉-3.59%)

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