Here are five things you need to know this morning:
Netflix a thrill: Not that long ago, conventional knowledge was that the streaming market was saturated, Netflix’s golden age of constant subscriber growth was over, and the company would have to eke out revenue gains by raising prices for its existing customers. But a lot has changed over the past few quarters for the streaming giant, which announced after the bell on Tuesday that it added almost 19 million new customers last quarter. That’s its biggest total ever, besting the previous record of 15 million added at the onset of the pandemic, and it brings Netflix’s customer base to more than 300 million people. The company credited the launch of the latest season of the South Korean hit Squid Game for the success, along with live sporting events such as the highly publicized boxing match between Jake Paul and Mike Tyson – a fight that was mostly panned by fans but ended up being an absolute knockout from Netflix’s perspective. The shares jumped more than 10 per cent in after market trading yesterday.
Brookfield near deal for rent-to-own business Divvy: Brookfield Asset Management is in talks to buy startup Divvy Homes and its portfolio of 3,800 single-family rental homes for US$950 million. Bloomberg is reporting that Toronto-based Brookfield is nearing a deal to acquire the company that owns a slew of homes for rent mostly in U.S. cities like Atlanta, Dallas and Tampa. Founded in 2017, Divvy’s business model is to buy home on behalf of its customers, who then rent the properties with a contractual option to buy the home outright in the future. The sudden rise of interest rates has put pressure on the business model by making it harder for customers to exercise the buy clause.
Novacap closes US$1B digital assets fund: Canadian private equity firm Novacap Investments Inc. has closed a US$1 billion investment fund with an artificial intelligence theme, targeting investments in digital infrastructure assets. Bloomberg is reporting this morning that the Quebec-based firm, which manages about $11 billion, has spent two years assembling the capital for the new fund. Institutional firms, family offices and high-net worth individuals are partners in the fund, Novacap says, without offering specifics. The fund will target companies that sell connectivity and digital access services, with a target of roughly $100 million per investment.
Oracle shares soar on AI news: Oracle shares have jumped almost nine per cent premarket this morning after Donald Trump announced the company would make a large investment in artificial intelligence (AI) infrastructure as part of a joint venture with OpenAI and SoftBank. The initiative, called Stargate, plans to invest US$500 billion to help the U.S. stay ahead of China and other rivals in the AI race. Construction for the venture’s data centres has already started. Oracle shares are likely also benefiting from a report that the company is on a list of entities that Trump would deem to be acceptable owners of TikTok, the social media app whose U.S. future remains up in the air.
P&G beats analyst expectations: We will be watching shares in Proctor & Gamble today after the consumer product conglomerate beat second-quarter estimates, driven by growing demand for household staples like shampoo and detergent. The company earned a profit of US$1.88 per share, beating estimates of $1.86. Shares in the company are up three per cent premarket on optimism that the company’s sales jump could be a sign that the consumer pushback over inflation-related price hikes is over.
