Netflix nears 100 million subscribers

For the 1st quarter of this year, Netflix has added 5 million members to its total subscriber base to almost hit 99 million users. Netflix, in a letter to shareholders, said, “We expect to cross this 100 million member mark this weekend. It’s a good start.”

In the U.S., it boosted its subscriber base by 1.42 million subscribers. Analysts had an average estimate of 1.50 million.

Almost 48 million of its subscribers are outside America while 51 million are in the U.S. Michael Oson, a Piper Jaffray analyst believes that by the end of 2017, the majority of Netflix’s subscribers will be overseas. Netflix has invested heavily in original content to get subscribers.

Reed Hastings, Netflix CEO, said, “Our viewing is very large and growing, but nowhere near as big as YouTube. We definitely have YouTube envy.”

According to Michael Pachter, Wedbush Securities analyst, “Over the past decade, what really did it for Netflix was the explosion of phones and tablets that allowed people to watch video everywhere. But Netflix clearly had a vision before those devices became so ubiquitous.”

The current market value of Netflix is around $63 billion. Its stock increased by $1.67 to $148.92 in Monday’s trading despite missing a little management forecasts of its subscriber growth numbers.

For this year, Netflix plans to spend more than $1 billion to boost member acquisition. It will also invest over $6 billion in programming. Last year, it spent $5 billion on programming.

Some of Netflix’s successful original shows include The Crown, Gilmore Girls and Black Mirror. It also signed exclusive deals with artists with an international appeal. This includes Adam Sandler and Shah Rukh Khan.

Netflix has also increased its investment in standup comedy. This includes a Dave Chappelle collection.

Netflix will stay away from providing football related content. Netflix, in a shareholder letter, said, “That is not a strategy we think that is smart for us since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows.”

Netflix is open to the idea of its original films being shown at movie theaters such as AMC and Regal but only if it’s released at the same time on Netflix.

For some analysts, Netflix’s cash burn is a major concern. Streaming content obligations have skyrocketed to $15.3 billion compared to last year’s $12.3 billion. Pachter said, “We continue to believe that Netflix cash burn is important and is largely overlooked by investors.”

For the 1st quarter of 2017, Netflix announced that its net income grew to $178 million which represent earnings per share (EPS) of 40 cents per share compared to last year’s $28 million which represents an EPS of 6 cents. Wall Street analysts were projecting Netflix’s EPS to be 37 cents. In this regard, Netflix beat analysts’ expectations.

Netflix’s international operations had an operating profit of $43 million for this quarter, but the company is forecasting to lose $28 million for its international operations this quarter.

Delta Air earnings beat Wall Street estimates

Delta Air Lines Inc. has announced their quarterly profit and the figure was better than expected. The company also forecasted their 2nd quarter passenger unit revenue to grow by one to three percent. Delta Air Lines shares surged 1.9% to $46.13 in early trading following the announcement.

Last month, Delta reduced its operating margin forecast for the 1st quarter because of rising fuel and labor costs.

According to Zacks Investment Research, Wall Street was expecting earnings per share to be 73 cents per share. However, Delta Air reported adjusted earnings per share to be 77 cents.

Compared to last year’s first quarter, Delta’s net income dropped by 36.3% to $603 million. Total operating revenue also fell by 1.1% to $9.15 billion. Analysts forecasted it to be $9.18 billion.

Glen Hauenstein, Delta President, said, “We will keep our full-year capacity growth capped at 1 percent to support this unit revenue momentum and the company’s return to margin expansion.”

The company noted that last month was the first month since November 2015 that they had positive passenger unit revenue. Delta expects this figure to remain positive for the rest of 2017. Last year, unit revenues dropped throughout the industry because of lower average fares and higher capacity.

Helane Becker, Cowen & Co. analyst, said, “Investors may view the company’s second quarter passenger unit revenue guidance as ‘aggressive’ given recent guidance missteps, but the guidance was still much better than expectations especially when considered the storm impact.”

Earlier this month, Delta had to cancel around 4,000 flights because of the hazardous weather in Atlanta. Ed Bastian, Chief Executive Officer, said, “We hold ourselves to a high standard, and we apologize to all our customers who were impacted by last week’s events.”

Ned Walker, Delta spokesman, said that Gil West who is Delta’s chief operating officer would perform “a complete deep dive across the organization to find out lessons learned from all the different divisions.”

The impact of it would be that they have to reduce their 2nd quarter pre-tax income by $125 million. Their forecast for their 2nd quarter operating margin is within a range of 17 to 19 percent.

According to Delta’s chief financial officer, Paul Jacobson, the first quarter of the year would likely be the quarter that applies the most pressure on profit margins because of rising fuel costs. Jacobson said in a statement, “With an improving revenue profile and further improvement as our cost growth moderates in the second half, we are on track to expand margins for the balance of the year.”

Delta President Glen Hauenstein, Delta is expecting a fast recovery for its pricey last minute tickets that business travelers usually avail of. He described those fares are now “moving in the right direction.”

According to a Wall Street Journal report, Delta is the most generous airline when it comes to compensating passengers for lack of seats in 2016. Among the airlines, it also had the highest rate of overbooked spots.

Delta Airlines is based in Georgia, Atlanta.

Gaming accessory maker Mad Catz closes

San Diego-based Mad Catz Interactive has filed for Chapter 7 bankruptcy liquidation. The reasons cited for this liquidation was that it could not raise additional capital or get a buyer to save it.

The difference between a Chapter 11 and Chapter 7 bankruptcy is that in Chapter 7, there is no intention to reorganize. The objective is liquidation, and thus directors and officers will vacate the company.

For almost three decades, Mad Catz was the leader in the manufacture of video game peripherals including headsets, battery packs, memory pacts, controllers and fight sticks for PC, consoles, and handhelds. The brands of Mad Catz include Mad Catz and Tritton. Tritton brand will also shut down and liquidate its assets to pay off debts to creditors.

Mad Catz is considering several options which include sale of assets, taking on more debt and even sale of the whole company. Liquidation is also an option for its foreign subsidiaries. Proceeds from the sales of assets of Mad Catz will be used to repay creditors.

The board of directors shut down the company because it failed to find a satisfactory solution to its cash liquidity problems. Also, the board and executive officers have resigned as of March 30.

Consulting giant, PricewaterhouseCoopers is now the overseeing entity for Mad Catz and will see through the liquidation of the company.

Mad Catz started in 1989, and its headquarters is in Mira Mesa despite being incorporated in Canada.

Chief Executive Karen McGinnis said in a press release, “Regrettably and notwithstanding that for a significant amount of time the Company has been actively pursuing its strategic alternatives, including various near-term financing alternatives such as bank-financing and equity infusions, as well as potential sales of certain assets of the Company or a sale of the Company in its entirety, the Company has been unable to find a satisfactory solution to its cash liquidity problems.”

In February 2016, Mad Catz retrenched 37% of its workforce. All of Mad Catz products from 2016 were reworked versions of existing Mad Catz products.

At the beginning of this year, the New York Stock Exchange gave Mad Catz a listing deficiency notice as its stock was trading very low. It reached a low price of below $0.04.

Last September, Mad Catz sold to Logitech its Saitek brand of flight and space simulation controllers. In return, it received $11 million in cash, of which $2 million was in escrow to cover any potential claims to the transaction.

In 2015, Mad Catz had a successful year because of its accessories for the Rock Band 4 video game. Things went downhill since then. Last year, sales dropped to $44.7 million and posted a $4 million loss.

Their most successful line of products was arcade sticks made for fighting games like street fighter.
In the past, it made a poor investment in game developer Harmonix which was attempting to revive its Rock Bandlicense. Mad Catz was the producer of its plastic instruments and co-publisher.

Simple trick to save money and live like a rock star

Rock star

OK maybe you won’t be living like a rock star but it’s a start…

For many people in the United States, trying to save money is a difficult task. With a range of household bills to deal with coupled with accommodation costs, food, travel costs, and other essential expenses, there is little leeway for those who are keen to save some money. However, without any savings put aside people often find themselves in difficult situations in the event of a financial emergency such as unexpected bills and repairs.

However, officials have said that there are ways in which people can boost their chances of being able to save money even if they feel that there is little or no flexibility in their budget to make savings. One expert said that there were various little methods that could help households to save more money each month and that even putting aside small amounts of money could prove invaluable as they can quickly add up.

Some of the methods to consider

According to one recent report, there are a number of simple and effective ways in which households can save small amounts of money. One of the methods was to try and save just 50 cents per day in a jar or bottle – leftover change from making a purchase for example. By doing this for one year, a person can save $180 dollars, which is a nice little addition to any savings account and in many cases the person doesn’t miss 50 cents per day.

Another recommended course of action is for people to stop wasting money on cans of soda, drinks from coffee shops, and shop bought lunches when going to work. Instead, take a packed lunch and a bottle of water that can be refilled at home or work. This can save the average person a small fortune each week and also means that you can be healthier as you know exactly what is going into your sandwiches and meals.

One thing that many experts recommend to those who need to start saving some money is to look at how much they are paying out on things such as insurance coverage, utilities, and other regular monthly costs. In many cases, people end up paying way over the odds when they could get a better deal elsewhere. Using comparison sites makes it easy for those who want to switch to better deals and this could equate to significant savings each month for those who are paying more than they need to.   

Consumer agency to propose payday loan rule in Kansas City

Kansas City

Since the Consumer Financial Protection Bureau (CFPB) announced that it was working to establish a federal regulatory framework for the payday loan industry, consumers, politicians and businesses have been waiting anxiously to find out what exactly will happen. Well, now everyone will find out.

On June 2 at 10 a.m., the CFPB will propose a new rule to limit payday loan lending. This will help produce the very first federal regulation for the payday loan industry that will be instituted by all states. The new rule would cover not just payday loans that come with 300 percent interest rates, it’ll also cover installment loans and auto title loans.

CFPB officials say that auto-title loans have become more of a pressing issue in recent years. The federal organization notes that 20 percent of auto title loan borrowers have their vehicles seized for failing to repay debt. Moreover, a majority of auto title loan revenues stem from perpetually indebted consumers.

It’s quite apparent that the CFPB is certainly putting forward sweeping regulations.

The consumer watchdog agency confirmed Wednesday that it will host an event in Kansas City, Missouri. The event will see representatives from consumer organizations and the payday loan industry as well as public officials discuss short-term lending. This is where the new proposal would be unveiled.

According to the CFPB, the event will be open to the general public at the convention center in the downtown core, but you will need to reserve a seat online. This may be the first hearing of many so if you miss this one you could catch another one.

With 18 states prohibiting payday loans, one consumer advocate thinks this is a great opportunity for decision in Kansas, rest of the state and the entire country.

“We can bring reform not just to Missouri and not just to Kansas, but across the country,” said John Miller, an attorney and representative from the Communities Creating Opportunity to fight predatory lending practices, in an interview with a local news affiliate. “And if we can be a major part of that, we would love that opportunity.”

You can bet one person will be front and center of the hearings in Kansas City next month.

Elliot Clark has first-hand experience with website that say they offer the best payday loans. Clark, who says there are more payday loan stores in Missouri than McDonld’s, Starbucks and Wal-Mart stores, wants more regulations on the industry. Failing to receive a loan from his financial institution, he was forced to use a payday loan.

From there, his troubles would begin: he took out five payday loans for a grand total of $2,500. However, for five years, he ended up paying $61,000 in interest alone. He said he had no other choice for his family.

Consumer advocacy groups have urged the CFPB for years to impose tougher rules and regulations for payday loan businesses. Payday lenders argue that any new rules and requirements would prevent them from extending credit to impecunious consumers who don’t have access to bank loans or credit cards.

Americans continue to live beyond their means

rich old guy

In the current financial climate, Americans can ill afford to splash out on luxuries and unnecessary purchases. However, according to a recent report many Americans are getting themselves into debt and using money that they cannot afford in order to lead a more extravagant lifestyle. With many Americans now leading champagne lifestyles on beer money, this is a situation that is causing some concern. Some Americans seem determined to keep up with the Jones’ even if they are struggling financially.

According to reports, some people are splashing money that they cannot afford on things such as new clothes, cars, extravagant holidays and even homes that are financially out of their reach. A recent study has shown that many Americans are more than willing to get themselves into debt in order to find this luxury way of life, which for many could lead to a downward spiral in terms of finances.

Keen to portray a lavish lifestyle

The study was carried out by Fintonic and indicated that one in eight Americans would be happy to take on $1000 or more in debt simply to portray a more lavish lifestyle to others. Moreover, 10 percent of those on $80,000 or more per year were willing to take on $5000 or more in debt in order to enjoy a more extravagant way of life.

The research was carried out in February this year and involved polling 1100 adults in the United States. Officials involved in the study said that people who were on a higher annual salary were twice as likely as lower income earners to get themselves into debt in order to enjoy more luxury. One official said that both traditional and social media tended to glorify luxury lifestyles and that this was part of the problem because it was encouraging people to get into debt in order to portray that particular lifestyle.

With so many people eager to portray a lifestyle that is more luxurious than they can realistically afford, there are concerns that more and more people could find themselves falling into the debt trap. This could lead to years of financial problems but many do not think about the long term effects when taking out finance for purchases that they cannot afford.

Experts said that people are increasingly incentivized to act in this way as a result of the way luxury lifestyles were portrayed by the media, adding that luxury was driven by social and cultural trends as well.