Amazon Just Schooled Apple

...on how to make predictable revenue through monthly subscriptions.

Friday, November 1st | Issue No. 127


It's my birthday 🎉month! Special announcement below👇🏽.

MARKET MOVES...

S&P 500: 3,037.56 -9.21 (-0.30%)

Dow Jones: 27,046.23 -140.47 (-0.52%)

Nasdaq: 8,292.36 -11.62 (-0.14%)

PRE-MARKET PLAY...

(listen to PAPERTRAIL playlist)

PUT A PIN IN IT...

Unless you have a bad earnings report then I want to talk about it not now but right now.


Pinterest (NYSE: PINS) shared its Q3 earnings report yesterday and the selloff was all the way live with investors looking at each other like...​

WHY THIS IS HAPPENING...

First things first. Pinterest is a search engine like Google (NASDAQ: GOOG/GOOGL), not a social network. However, it's often compared to other social networks like Facebook and Instagram (NASDAQ: FB), LinkedIn (NASDAQ: MSFT), and Twitter (NYSE: TWR) when it comes time to measure its stock's success. All of these companies rely heavily on ad revenue to keep the lights on and after Google and Facebook recently reported ad sales growth rates of 17% and 28%, respectively, investors were looking for Pinterest to make it rain as well and boy did it. Pinterest shared that ad sales grew by 47% in Q3 in comparison to last year but the company still came up short on total revenue by well over half a mil not to mention that the total of monthly active users is down and the company has yet to become profitable.


To make matters worse, Pinterest lowered its guidance on total revenue for the year meaning it's just not going to make as much money as it thought it would back when the year started. To keep it 💯​, investors are not only looking for more top line sales but higher bottom line profits in a time where a recession may be coming 'round the corner and they want to invest in companies that will be able to thug it out during a market downturn.


Pinterest got the bag and fumbled it causing the stock to drop 18% after the report.

THE RETURN...

Pinterest stock is down 27% since it peaked in August but it's still up 32% since its IPO earlier this year.

FOR THE NEWB IN YOU...

Guidance is simply a company's outlook on what's to come with a focus on things like revenue, net profit, expenses, user growth, etc. It's typically shared with investors during an earnings report so they have an idea of what to expect going forward and if anything has changed since the last report. Think of it like an artist projecting (guidance) his or her second album to go Platinum since the first album did. In this case, the second album can either do go Platinum and meet expectations, go Gold and miss expectations, or go 2X Platinum and exceed expectations.


Not sure what top and bottom lines are? Find out in Issue No. 125.

YOU GOTTA PAY TO PLAY...

Is there an animoji for that?


iPhone sales haven't been what they used to be for Apple (NASDAQ: AAPL) for years now and investors are ready for the trillion dollar company to switch things up a bit.

WHY THIS IS HAPPENING...

Investors are encouraging Apple to offer monthly subscription bundles with iPhones to create more recurring revenue instead of one-off transactional sales. Why? Predictability of revenue. Amazon (NASDAQ: AMZN) has done it with Amazon Prime and investors feel that if it's good for Bezos, then it should be good for Zuckerberg. Furthermore, shareholders think that a bundle of sorts would be dope as hell such as phone upgrades that come with iCloud storage, AppleCare, or Apple TV+. That fact that folks trade-in their phones at 5 times the rate they did last year is spiking the conversation even more as most people want that new new as soon as it comes out.


This isn't a far-fetched idea considering major phone providers like AT&T (NYSE: T), T-Mobile (NASDAQ: TMUS), and Verizon (NYSE: VZ) already allow customers to make monthly payments for their phones instead of buying them outright and bundle in other perks like Apple Music and Netflix (NASDAQ: NFLX).

THE RETURN...

Apple stock is up 68% this year.

FOR THE NEWB IN YOU...

A shareholder is a person, company, or institution that owns at least one share of a company’s stock making him, her, or it an owner in a company.

Follow the money with our stock market newsletter, PAPERTRAIL, your daily dose of Wall Street flavor.

ALL EYEZ ON...

Interest rates.


A couple days ago, the Fed announced it's cutting interest rates back again by another 25 basis points (that's market slang for 0.25% since every 1 basis point = 0.01%) which means banks can borrow money for the L-O and let us consumers get in on the fun as well when we apply for loans. Since banks just had a major come up, it's only right to share a few that are stocks too.


Wanna hear it? Here it goes:


  • Banks: Bank of America (NYSE: BAC); Ally (NYSE: ALLY); Chase (NYSE: JPM); Capital One (NYSE: COF); Wells Fargo (NYSE: WFC); Citigroup (NYSE: C); American Express (NYSE: AXP); PNC (NYSE: PNC); SunTrust (NYSE: STI); BB&T (NYSE: BBT); Fifth Third (NASDAQ: FITB); M&T Bank (NYSE: MTB); Comerica (NYSE: CMA)


Please note that this may not be a complete list of bank stocks.​​

AND NOW A WORD FROM OUR SPONSOR...

You've come a long way since beanie weenies.

As this year is winding down, so is the temperature and Gucci Mane's "So Icey" is on repeat.


But there's no need to stay frozen like the East Atlanta Santa when you can rock this INVE$T beanie and keep those ears and head cozy.


November 14th is my birthday too so all month long I'm running a 14% discount on all merchandise. Simply enter code 'BDAY' at checkout and the discount will be applied.

MORE PAPERTRAILS...

DID YOU KNOW...

What's the average age when people switch their careers? (answer below)

WHO'S GOT NEXT...

Companies reporting earnings today about how much paper they're stackin' (or losing) and new things to come:


  • Alibaba (NYSE: BABA)

  • AbbVie (NYSE: ABBV)

  • Exxon Mobil (NYSE: XOM)

  • Chevron (NYSE: CVX)

  • Colgate-Palmolive (NYSE: CL)

  • MoneyGram (NASDAQ: MGI)

WATCH ME WORK...

Stocks on my watchlist:


  • Carnival Cruise (NYSE: CCL)

  • Exxon Mobil (NYSE: XOM)

  • Nike (NYSE: NKE)


PAPERTRAIL Pro with monthly portfolio reports coming soon.


Disclosure: The author of this issue owns stock of AbbVie, Apple, AT&T, Chevron, Exxon Mobil, JP Morgan Chase, Nike, and Verizon.

SHARE THE WEALTH...


But how Sway?


The best 'thank you' is a referral and you can earn cool perks and prizes when you share PAPERTRAIL. Here's how It works:


  1. Click here to sign-up grab your unique affiliate link.

  2. Share with your friends, family, and on social media.

  3. Receive dope stuff for being a ride or die.


The more people you refer that sign-up for my newsletter, the more prizes and perks you'll get! (as seen below)

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NOW YOU KNOW...

39 years old.

Dr. Eric Patrick

Managing Editor | 14% Off for My Birthday with Code 'BDAY'

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Disclosure: This editorial is by no means a solicitation to buy or sell any of the above-mentioned securities. It is merely a means for educational purposes. All investors are subject to their own research and due diligence. This post may contain affiliate links and we may receive commissions for purchases made through links in this post.

#investing #papertrail #pinterest #apple

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