Disney’s Dreams Came True 💰

Initial unemployment claims in the US have fallen for the third week in a row. That’s a bullish indicator for the job market and economic recovery. 📈

In the period ending Aug. 7, 375,000 people filed for unemployment. Continuing claims (the number of people still collecting unemployment after one week) measured 2,866,000 in the previous week. Those figures are a far cry from the 23,128,000 continuing claims we saw at COVID’s peak. In fact, they’re the lowest numbers we’ve seen since mid-March 2020.

The end of enhanced unemployment sent millions back to work, but not everyone is rushing back — there were 10.1 million job openings in June, and over 8.7 million unemployed in July. 🤔 To bring employees back, companies are pushing more aggressive benefits and better pay. But “better pay” could just be the result of inflation.

As more people go back to work, inflation could increase even more. Inflation has run hot as the economy recovers from the worst of the pandemic. But higher inflation means more urgency to raise interest rates down at the Fed. Interest rates will likely rise as people go back to work, but if they do… it’ll spell trouble for most investors. 

Analysts were split prior to Disney’s earnings report today. On one hand, analysts thought Disney+ numbers would fall (because other streaming services have seen drops in active users as the pandemic has waned). They also anticipated an unlucky quarter for Disney’s parks.  

Some analysts, however, expected a blowout. 🏰 ✨

Many investors will be happy to hear that analysts were a bit too pessimistic. Disney reported an EPS and revenue beat today, with $17.02 billion in revenues and $0.80 EPS. Analysts expected revenues of $16.76 billion and EPS of $0.55.

The big beat came as Disney’s media and entertainment division posted $12.68 billion in revenue, an 18% YoY increase. Disney’s Parks, Experiences, and Product segment grew more than 100% YoY to $4.31 billion — this is evidence of a strong post-COVID recovery. It hasn’t fully recovered, but the PEP vertical posted a profit of $356 million this quarter, compared to a loss of $1.87 billion this time last year. 

Disney’s “direct-to-consumer” streaming division concerned investors, but ultimately delivered. Disney is a stakeholder in Hulu, which reported higher subscription and advertising revenue. Hulu’s performance offset a higher loss from Disney+ caused by programming/production/marketing/technology costs. Despite its loss, it’s hard to discount that Disney+’s paid subscriber count has grown over 100% YoY.

All-in-all, the company’s profit reached $918 million. That might seem ‘small’ for a $200 billion company, but Disney’s recovery is admirable. You could even say… magical. 😉 This time last year, $DIS reported a quarterly loss of $4.72 billion.

$DIS climbed aboard its magic carpet in the afterhours, soaring 5.14% after the close. 🌙

Authentic Brands is about to add another huge consumer brand to its biz — Adidas AG plans to sell Reebok to Authentic in a $2.5 billion deal.

Adidas purchased Reebok for nearly $4 billion in 2006, but Reebok has underperformed for years. Even though the company reached profitability in 2019, its sales growth was insufficient for Adidas. Reebok, on the other hand, is a sufficient addition to Authentic’s portfolio of scrappy companies … which reek of the 2000s. 😅 Many are underperformers which are no longer as popular among customers, but their holdings still provide plenty of value. 

In 2020, Authentic reported $211 million in revenue. 

Among Authentic’s portfolio brands are Forever 21, Sports Illustrated, Volcom, Eddie Bauer, and Juicy Couture, to name a few. Authentic also retains brand rights for Shaquille O’Neal, Muhammad Ali, and Elvis Presley, among others.

The acquisition comes at a critical time for the brand group, which filed for a $1.5 billion IPO earlier this month. It’s still unknown whether or not investors will take a bite out of the brand. Nonetheless, Authentic’s star-studded lineup of bookrunners makes the $AUTH IPO one to watch. 🌟

Authentic’s notable owners include BlackRock, Leonard Green & Partners, General Atlantic, and Lion Capital LLP.

Coinbase added five new tokens to its arsenal yesterday. Now you can trade, send, receive, and store IoTeX (IOTX), Orion Protocol (ORN), Tribe (TRIBE), and TerraUSD (UST). 🙌 🤑

For now, the new coins are only available on Coinbase Pro, so you’ll have to trade on that platform. Any Coinbase user can access Coinbase Pro with their Coinbase log-in info. Let’s unpack these new tokens: 

• Orion: An Ethereum token that powers Orion Protocol, which aggregates liquidity from centralized and decentralized exchanges onto a single platform. In short, it looks for the best price you can get.
• IoTeX: IOTX aims to connect IoT (Internet of things) devices (like cameras, fitness trackers, drones) and decentralized applications. IOTX users are in complete control of their own information and data. Currently, over 6,900 devices use IOTX’s blockchain. 
• Tribe: The governance token for Fei Protocol, an issuer of the FEI stablecoin to decentralized finance (DeFi) users. Token holders can vote on Fei Protocol changes and the monetary policy of FEI.
• Quickswap: An Ethereum token that powers QuickSwap — a decentralized exchange running on the Polygon Network. It’s another governance token that offers holders voting rights, but it can also be staked for a percentage of Quickswap’s trading fees. 🙊
• Terra USD: Terra USD (UST) is a decentralized stablecoin pegged to the US dollar. 💵 The native token on Terra blockchain protocols is Terra (LUNA), which is also used to maintain prices of Terra’s stablecoins. Unlike centralized tokens, Terra USD isn’t backed by US dollars in a bank account. To mint 1 TerraUSD, US$1.00 worth of TerraUSD’s reserve asset (LUNA) must be burned, according to Coinbase.