The Mike Tyson-Jake Paul fight was an embarrassment both on a sporting and technical level. However, Netflix could still walk away a winner from the event, which was one of its early forays into live sports streaming.
Fans complained on social media they were hampered from viewing the boxing match due to streaming issues. Those who did manage to see it sat through eight rounds of Paul appearing to take it easy to avoid embarrassing the 58-year old former heavyweight champion.
So far, so bad. But with 60 million households tuning in to watch, Netflix is still likely to view the event as a success. Advertisers will want to see an improvement on the technical side for future live events but audience size remains the key metric.
Netflix understands better than some traditional rivals that combining sports and celebrity is key to getting a younger audience. That's why when it airs two NFL games this Christmas, the half-time entertainment for the Ravens vs Texans game will be provided by Beyoncé.
With the 'Trump trade' boost to the wider market seemingly now fading, individual companies will be under more scrutiny to show they can justify their stock gains, even if the Fed keeps rates higher for longer. Netflix has been a big winner recently - its 69% rise for the year through Friday's close far outstrips Disney's increase of 27% for example, even after the latter's impressive earnings last week.
That means Netflix needs to take some risks and the Tyson-Paul fight looks like a calculated one. While no one will be calling for a rematch, expect plenty of sequels along similar lines.
-- Adam Clark
*** Join Barron's senior managing editor Lauren R. Rublin and deputy editor Ben Levisohn today at noon when they speak with Ryan Kelley, CIO and portfolio manager at Hennessy Funds/Hennessy Cornerstone Mid Cap 30 Fund, about the outlook for financial markets, industry sectors, and individual stocks. Sign up here.
***
Glitchy Boxing Match Tests Streamer's Live Sports Ambitions
Netflix hosted a much-hyped boxing match between YouTuber-turned-boxer Jake Paul and former heavyweight champion Mike Tyson on Friday, but the live event raised more eyebrows for its technical glitches than what happened in the ring. It also spurred questions about Netflix's plans to handle large-scale live sporting events.
-- Netflix said on X that 60 million households watched the fight, which it
streamed from AT&T Stadium near Dallas. Netflix said the match dominated
social media, shattered records, "and even had our buffering systems on
the ropes," but declined further comment.
-- Netflix viewers reported widespread disruptions, including buffering,
laggy load times, and pixelated images, and frustrated viewers made the
hashtag #netflixcrash trend on X. Users asked why Netflix, which spent
months hyping the match, wasn't better prepared for the surge in viewers.
-- Ultimately, Paul, 27, defeated Tyson, 58, in a unanimous decision.
Netflix also reported that 50 million households worldwide watched the
bout between Katie Taylor and Amanda Serrano, calling it likely the
most-watched pro women's sporting event in U.S. history.
-- Separately, Warner Bros. Discovery reached a settlement in its
breach-of-contract lawsuit with the National Basketball Association. The
deal lets Warner Bros. develop new shows with NBA content domestically
and abroad, and gives it international NBA rights in Europe and Latin
America, The Wall Street Journal reported.
What's Next: Netflix's next test will be the live-streams of NFL games this Christmas, including the Kansas City Chiefs versus the Pittsburgh Steelers, and the Baltimore Ravens against the Houston Texans. Starting Jan. 6, Netflix will host TKO Group Holdings' WWE Raw wrestling in the U.S., Canada, the U.K., and Latin America.
-- Janet H. Cho and Elizabeth O'Brien
***
Nvidia to Report Earnings This Week as AI Remains in Focus
Nvidia reports earnings on Wednesday, with big expectations for its growth and the outlook for spending on generative artificial intelligence, which has been driving its sales. Barron's ran an excerpt of a new book by senior technology writer Tae Kim on Nvidia's emergence as a dominant force in the industry.
-- Wall Street expects Nvidia to report third quarter earnings of 75 cents a
share and revenue of $33.1 billion. Both would be nearly double year-ago
levels as Nvidia leads the market for graphics processing units, the
chips that data centers install to support generative AI.
-- Nvidia's data center sales for the third quarter are expected to be $29
billion, up from $14.5 billion a year ago. But one thing analysts are
watching is the slowdown in sales growth rates from the previous quarter.
Sales growth rates have slowed in each successive quarter since October
2023.
-- CEO Jensen Huang says the level of computing performance is about to grow
exponentially during the coming decade, enabling new AI innovations and
capabilities. He said on an episode of the AI-focused podcast "No Priors"
that Nvidia hopes to double or triple performance every year at scale.
-- Huang explained that the increase in performance would enable companies
to drive the cost of computing significantly lower. He also said the
improvements would be driven by not only AI chip advancements but by
improvements across the entire system, including software, networking,
algorithms, and hardware.
What's Next: So far, 75% of S&P 500 companies that have reported third quarter earnings have had positive earnings surprises, according to FactSet. The information technology sector has led all 11 sectors in revenue growth rate from a year ago, at 12.4%, while chip companies have had growth rates of 26%.
-- Tae Kim and Liz Moyer
***
Super Micro Computer Expected to Outline Plans to Avoid Delisting
While the fate of Super Micro Computer's listing on the Nasdaq hangs in the balance, an investor group acquired a large stake in the server maker, most of it in the form of options to buy shares. Super Micro is expected to submit a plan today to regain compliance with listing rules.
-- Three independent broker-dealers with common ownership -- G1 Execution
Services, LLC, Susquehanna Investment Group, and Susquehanna Securities,
LLC -- all affiliated with Susquehanna International, have together
acquired 30.8 million Super Micro shares, or 5.3%. Of those shares, 22.6
million are represented by options.
-- Susquehanna International couldn't be reached for comment. Its filing
detailing stockholdings as of Sept. 30 showed Susquehanna Securities held
817,441 Super Micro shares and G1 Execution held 778 shares. Super
Micro's stock split 10-for-1 on Oct. 1.
-- Nasdaq's 60-day filing deadline to stay in compliance ended Saturday.
After telling investors on Nov. 5 that it was "working diligently" to
hire a new auditor, Super Micro said on Nov. 13 that it needs more time
to file its 10-Q earnings from last quarter after its auditor Ernst &
Young resigned.
-- Super Micro was previously delisted in August 2018 for a delay in filing
its financial reports and then relisted in January 2020. If it gets
delisted again, shares could continue trading over the counter rather
than on the Nasdaq exchange, perhaps with a different ticker symbol.
What's Next: A person familiar with the matter told Barron's about Super Micro's plan to file today to regain compliance. If Nasdaq accepts the plan, the company's stock could continue trading on the Nasdaq stock market.
-- Ed Lin, Angela Palumbo, and Janet H. Cho
***
Hollywood Hangs Hopes on Gladiator, Wicked for Holiday Sales
Movie studios are anticipating a blockbuster movie-watching week, when Paramount Pictures' Gladiator II faces off against Comcast-owned Universal Pictures' Wicked starting Friday. Hollywood is calling the double movie premieres "Glicked," and hopes it will kick off one of the biggest Thanksgiving seasons ever, Comscore senior media analyst Paul Dergarabedian said.
-- Expectations are building for Wicked, with estimates it will draw $100
million to $110 million in domestic box office sales its first weekend.
Gladiator II's opening could get $65 million, Dergarabedian said. The
anticipation is reminiscent of last summer's Barbenheimer, the
simultaneous debuts of Warner Bros. Discovery's Barbie and Universal's
Oppenheimer.
-- Universal is hoping to tap into the success of the Wicked Broadway show,
which has raked in $5 billion over 21 years. It plans a promotional
effort for the movie that Chief Marketing Officer Michael Moses called
"just short of obnoxious," from Starbucks drinks to CVS nail polish.
-- Gladiator II, directed by Ridley Scott and starring Denzel Washington,
already has $87 million in box office sales in the U.K., France, Italy,
and other international markets, according to BoxOfficeMojo. Disney's
Moana 2, which opens the day before Thanksgiving, could boost overall
holiday box office numbers.
-- The success of the Thanksgiving holiday weekend could help Hollywood make
up some lost ground as box office sales continue to run about 11% below
2023 levels through Sunday, Comscore reported. This year, domestic box
office sales are just over $7 billion, well below levels before the
pandemic.
What's Next: If Wicked sells $1 billion at the worldwide box office, it would be the first movie based on a musical to do so, The Wall Street Journal reported. And it is only the first part of the movie's story. The next half of Wicked will hit theaters right before Thanksgiving 2025.
-- Janet H. Cho
***
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