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Netflix stock soars as company obliterates expectations

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(FinancialPress) — Netflix, Inc. (NFLX) rose a full 9% in after-hours trading after its Q4 earnings report revealed a much more dramatic rise in subscribers than anticipated by Wall Street. The company‘s guidance for Q1 2018 was also deemed impressive by markets.

BY THE NUMBERS

The streaming platform‘s stock had already reached a record high by Monday‘s session closing, in anticipation of its earnings report for the last quarter of 2017. Added to that, once the report came out, the effect on after-hours trading was so dramatic that the Los Gatos, California-based company‘s market valuation finally broke the $100 billion landmark.

Earnings per share reached $0.41 on a $3.29 billion revenue for the last fiscal quarter of the year. FactSet consensus figures stood close, with per-share earnings expected at $0.41 and revenue at $3.28 billion. YOY revenue rose 32.6% and earnings per share rose 174% over the same period.

However, the main number that the market looks at when these reports come out is the number of new subscribers to the platform in the previous quarter – a fact well known by more seasoned NFLX shareholders. New subscribers are traditionally seen as small, individual and never-ending streams of new revenue.

The coveted number stood at a staggering 8.33 million new customers – making the overall number reach 117.58 million worldwide. New international subscribers reached the 6.36 million mark, 1.31 million over forecast.

FactSet surveys had much lower expectations – 6.37 million new clients, to be precise. Therefore, the actual number completely obliterated expectations.

“The big driver was subscriber growth. International growth was astonishing,” says Scott Freeze, chief investment officer of Sabretooth Advisors International adds came in at 6.36 million versus 5.05 million expected.

The guidance for Q1 2018 was set at $0.63 EPS and revenue of $3.686 billion. The FactSet consensus survey only expected an EPS of $.054 and $3.487 billion in revenue.

NFLX also guided for EPS of 63 cents on revenue of $3.686 billion in the first quarter of 2018, breezing past the FactSet consensus, which called for EPS of 54 cents and revenue of $3.487 billion.

Next episode in 3 months.

Ruben is a South American writer who focuses on the state of the cryptocurrency, cannabis and tech industries worldwide.

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Cannabis

Nationwide US cannabis legalization lawsuit movement scores an L

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(FinancialPress) — The first legal battle held by the lawsuit levvied against the federal government, launched by cannabis legalization advocates, finds the plaintiffs on the losing side.
Judge Alvin Hellerstein, who officiates for the U.S. District Court in the Southern District of New York, ruled that the plantiffs “failed to exhaust all administrative remedies“ to settle their request, and therefore granted the motion to dismiss filed by the U.S. Justice Department.
The suit argues for the unconstitutionality of the 1970 Controlled Substances Act, and requested that marijuana be reclassified from the schedule of controlled narcotics.
Had the suit been successful, marijuana would have been immediately legalized country-wide.

The ruling will be appealed by the plaintiffs – a group that includes a young epileptic girl and former NFL players.

Hellerstein‘s ruling read as follows:

“Although plaintiffs couch their claim in constitutional language, they seek the same relief as would be available in an administrative forum – a change in marijuana’s scheduling classification – based on the same factors that guide the (Drug Enforcement Administration’s) reclassification determination.”

The judge emphasized the fact that the ruling was an administrative measure, and should not be taken as support towards the notion of that marijuana should remain classified a Schedule I drug:

“This decision should not be understood as a factual finding that marijuana lacks any medical use … the authority to make that determination is vested in the administrative process,” he wrote.

He also denied the plaintiffs‘ claim of that using marijuana is a fundamental right of theirs.

“No such fundamental right exists,” he wrote.

“Every court to consider the specific, carefully framed right at issue here has held that there is no substantive due process right to use medical marijuana.”

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Alibaba bets big on Olympics for household recognition

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(FinancialPress) — The biggest e-commerce portal in China is making a strong investment as an Olympic sponsor for the Pyeongchang Olympic games. The imposing pavilion the company put up at the event is in line with the ones erected by giants Coca-Cola, McDonald‘s and Samsung.

With this, Alibaba (BABA) likely hopes that some of the 3 other giants‘ global recognition rubs off on it.

The Jack Ma-founded company made waves with its 2014 New York Stock Exchange IPO – the largest recorded in history. The eccentric frontman is a regular at major international events, and just last year was part of a photo op with US President Donald Trump.

However, despite its massive success in Asia, its  “brand awareness outside China is not commensurate with its size,” according to National University of Singapore marketing professor Junhong Chu. Alibaba‘s market value is larger than Walmart‘s, and the company looks to change that with the Olympic sponsorship.

The requirements of the contract are extensive – minimum commitment of 4 years, and hundreds of millions in investment. While the exact numbers are not required to be made public, a report states that BABA‘s estimated investment will border $800 milion for the duration of the deal, which ends in 2028. This puts the company shoulder-and-shoulder with name giants such as Toyota, GE and Visa.

Alibaba steps in at a critical time – as longtime main sponsor McDonald‘s announced it will end its deal with the Olympics 3 years early. Not only does the new partnership bridge that financial hole, but a spokesperson for the Asian giant also stated that it comes “at a very critical time,” and that it will use its technology to help make the Olympics “more efficient, secure and engaging,”

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Ethereum founder warns about cryptocurrencies as bitcoin breaks $11,000 again

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(FinancialPress)  —  Bitcoin’s rebound continued on Monday as it recovered from the depths reached on February 6th, by closing at $11,000 – a massive recovery from the below-$6000 value it had reached at its lowest of 2018. Even so, Ethereum’s founder took the time to warn her that cryptocurrencies still “could drop to near-zero.”

At the time of this publication, Bitcoin sits steady at over $11,505 on Coindesk. Bitcoin returned to over $10,000 of value last Thursday. Factors to be considered for the rise are the fact that Bitcoin Investment Trust had a strong surge last week – as it grew in unison with Bitcoin and other recovering cryptos. Meanwhile, a CNBC investigation caused Riot Blockchain to lose considerable value.

After an all-time high of $20,000, Bitcoin drastically stumbled in December after regulators from major financial hubs, such as China and South Korea, began cracking down on the cryptocurrency market. Fast forward to today, and the latter is also a leading factor for the continuing rise in the digital currency‘s value, as enthusiastic trading occurs in the Asian country. The recovery began on February 6 after a Senate hearing in the US in which regulators warned about the cryptocurrency market, but did not signal that they would be aggressively pursuing regulation or restricting trading in any way.

The re-surge is condimented with comments from top cryptocurrency Ethereum, Vitalik Buterin, who said in a tweet that cryptocurrencies as a whole are a “new and hyper-volatile asset class“.

Ethereum, Ripple and Litecoin all closed with gains Monday.

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