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Five on Friday

The World’s Most Valuable Company Finally Goes Public

The Chinese government is making life difficult for Big Tech, Disney’s streaming platform just keeps growing, Saudi Aramco hits $2 trillion valuation, some earnings wrap-up, and a hilarious Walmart slip-up. It’s the Five on Friday!

#ChinasBlacklist

The Chinese government has reportedly ordered state businesses to remove all foreign tech by 2022 in the country’s latest retaliation against U.S. tariffs. 

What does this mean?

Major U.S. tech firms in China are likely to feel the effects of such an aggressive move, including the likes of Microsoft (NASDAQ: MSFT), Dell (NYSE: DELL), and HP (NYSE: HPQ). The policy has been dubbed “3-5-2” because the replacement of the technology will happen at a pace of 30% in 2020, 50% in 2021, and 20% in 2022. While the directive is not public, two cybersecurity firms told the Financial Times that their government clients described the policy to them. Beijing’s move comes against the backdrop of the ongoing U.S.-China trade war in which technology has been front and center. China’s technology firms have been the target of U.S. pressure, and this move would be seen as retaliatory. There has been no confirmation as of yet from Chinese officials. 

Bet you didn’t know

As of November, the trade war has cost China an estimated $35 billion in 2019 alone.

#DisneyPlus

Netflix (NASDAQ: NFLX) investors will be getting worried after its biggest competitor, Disney+ (NYSE: DIS), posted impressive app download numbers this week.

What does this mean?

My oh my, is there anything that can stop the House of Mouse right now? Less than a month since its release to the world, Disney+ has reportedly been downloaded to mobile devices 22 million times, according to mobile app research firm Apptopia. This comes off the back of a very strong start to life in streaming for Disney, who reportedly had close to 10 million sign-ups to the service in its first 24 hours. If that wasn’t enough, the company’s stock continues to rise following the report, as well as the news that Disney+ was the top trending search in the U.S. in 2019, as stated in Google’s (NASDAQ: GOOGL) annual search trends list. The app has brought in close to $20 million in revenue already. Disney will also be hoping to round off an incredible year in cinema with its final release of 2019 coming out next week: ‘Star Wars: The Rise of Skywalker’.

Bet you didn’t know

George Lucas traded 2.5% of his ‘Star Wars’ gross with Steven Spielberg for 2.5% of the gross from ‘Close Encounters of the Third Kind’, as Lucas was worried Spielberg’s classic would outperform his space opera. ‘Star Wars’ made $775 million versus ‘Close Encounters’’ $304 million.

#SaudiAramco

The world’s most valuable company solidified its position after hitting a $2 trillion valuation on its second day of trading this week. 

What does this mean?

Shares in the oil producer jumped on their second day of trading, touching the $2 trillion valuation so-coveted by the kingdom’s crown prince, Mohammed bin Salman. When the crown prince announced he would take Saudi Aramco (TADAWUL: 2222) public, he promised the move would create more transparency at the company, as well as help to bring foreign capital into the country — a symbol of the traditionally secretive country’s opening up to the world. All is not quite as it seems though, as the company’s success in the public domain has been marred by reports of massive levels of state interference from the crown prince himself. These allegations include reports of wealthy families being pressured into buying shares, banks issuing loans to retail investors, and using the kingdom’s funds to bolster sales. In practice, the crown prince has achieved a pyrrhic victory in getting Saudi Aramco to where it is today, one achieved through a mixture of coercion and stage management.

Bet you didn’t know

In nominal terms, Saudi Aramco’s valuation would make it is the ninth-largest economy in the world.

#EarningsRoundup

As the year draws to a close, so too does earnings season, with some more stocks from the MyWallSt showroom reporting on the latest quarter.

What does this mean?

Casey’s General Stores (NASDAQ: CASY): The Midwestern favorite saw its stock price drop more than 9% on Tuesday following a less than stellar earnings report. Same-store grocery sales grew by 3.2%, but fuel and meal sales missed expectations.

Lululemon (NASDAQ: LULU): The athleisure brands’ sales and revenue topped analyst predictions, but shares still fell as much as 6%, as the company’s fourth-quarter outlook came in slightly below Wall Street expectations.

Stitch Fix (NASDAQ: SFIX): Shares in the personalized-styling service rose nearly 5% on Tuesday after reporting first-quarter results that exceeded analysts’ estimates. The company reported a loss of $178,000 on top of revenue of $445 million — up 21% year-on-year.

Ulta Beauty (NASDAQ: ULTA): The company beat third-quarter profit estimates last week, driven by sales of higher-margin cosmetics products, sending the retailer’s shares up nearly 13%. Ulta reported net income of $129.75 million, or $2.25 per share.

Vail Resorts (NYSE: MTN): The ski resort giant saw its stock rise nearly 3% on the back of a very positive earnings report for its fiscal first quarter. This is thanks to its losses per share of -$2.64 for the quarter that beat out Wall Street’s estimate of -$2.98 per share. 

Bet you didn’t know

Companies are legally required to file earnings reports no later than 45 days after the end of their first three quarters. 

#AndFinally

Walmart (NYSE: WMT) Canada is saying sorry, eh, for selling a Christmas sweater that features an image of Santa Claus behind a table with three white lines that look similar to cocaine, including the phrase: ‘let it snow’. The American retailer was quick to remove the sweater from its range after drawing criticism, and made a statement on Monday: “These sweaters, sold by a third-party seller on Walmart.ca (our website in Canada), do not represent Walmart’s values and have no place on our website.” As if things couldn’t get any wackier, reports have since emerged that a Colombian government agency is demanding money and an apology from Walmart over the sweater due to the product description on the site, which read: “Santa really likes to savor the moment when he gets his hands on some quality, grade A, Colombian snow.” The agency claims that the sweater has damaged the reputation of the country. 

What does this mean?

When famous composer Irving Berlin wrote the Christmas class, ‘White Christmas’ in 1942, I don’t think this is what he had in mind.

Bet you didn’t know

Earlier in December, Amazon (NASDAQ: AMZN) was forced to pull Christmas ornaments from its site that depicted the Auschwitz concentration camp in Poland, prompting understandable outrage online.

The Week In Numbers

35% 

is how much iPhone shipments dropped by in China in November.

$125 million

is how much money Southwest Airlines (NYSE: LUV) states it will share with employees following a deal with Boeing (NYSE: BA) over its 737 Max.

$2 trillion

is the market cap hit by Saudi Aramco on its second day of public trading on Thursday.


MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here

Jamie Adams
Jamie Adams
Jamie is a writer here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.