6 Share Cannibals At Low Valuations; Disney Bails Out Fubo; Trevor Milton Is Back? (DAL, PTLO)
Jan 12, 2025
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Disney shakes things up with its acquisition of FuboTV, but the challenges of its business model are under scrutiny. Trevor Milton's controversial return stirs debate around accountability in the industry. Investors are introduced to emerging share cannibals, while market psychology reveals the impacts of loss aversion. Adobe's AI innovations spark discussions on disruption, and the B2B SaaS landscape gets a spotlight with Paycom. Plus, affordable computing rises with Raspberry Pi, showcasing the shift towards simpler tech solutions.
Disney's acquisition of FuboTV signals a strategic shift towards live sports streaming, but skepticism lingers about Fubo's long-term viability.
Trevor Milton's return to Nikola is perceived as a misguided effort to rebuild credibility after past controversies that severely damaged investor trust.
The discussion highlights concerns over potential overbuilding in the AI data center space, paralleling historical tech bubbles and emphasizing prudent investment scrutiny.
Deep dives
Travel Trends and Airbnb Affordability
The discussion highlights a noticeable shift towards alternative accommodations, particularly the affordability of Airbnb compared to traditional hotels. Observations from both hosts reveal that Airbnb often provides a better value over extended stays, especially in tourist-heavy locations. While high-end resorts may still command premium pricing, average hotels are viewed as overpriced in contrast to what Airbnb offers. This conversation indicates a potential trend where consumers might increasingly opt for more economical lodging options as they recognize value for their travel budgets.
Disney's Strategic Moves and Fubo Acquisition
The recent acquisition by Disney of a 70% stake in Fubo is presented as a strategic play following an ongoing lawsuit and highlights a shift in Disney's approach within the media landscape. This move allows Disney to gain control of Fubo while also leading to potential cost synergies, including operational efficiencies and advertising optimization. Despite these positive projections, skepticism abounds regarding Fubo's long-term viability due to its reliance on a struggling cable model, which complicates the outlook for investors. Disney’s strategy of diversifying into live sports streaming raises questions about its commitment to direct-to-consumer channels.
Trevor Milton's Comeback Attempt
The return of Trevor Milton, founder of Nikola, after a long hiatus raises eyebrows while he attempts to reshape his narrative regarding past controversies. Milton's assertions that Nikola operated transparently while under his leadership are met with skepticism, especially given the company’s notorious history of misleading investors. The conversation compares his situation to historical examples of businesses that faced severe backlash due to fraudulent practices, suggesting that recovering reputation after such scandals is nearly impossible. Overall, his return is perceived as an ill-fated attempt to regain credibility in a market that may no longer welcome him.
AI's Impact on Data Centers
Concerns are emerging about the overbuilding of data centers in relation to the AI boom, particularly as industry experts suggest a decade-long runway for growth. The ongoing trends indicate that while demand is rising for AI capabilities, there might be a corresponding risk of overextension similar to prior tech bubbles. The discussion underscores the cyclical nature of the semiconductor and data center industries, drawing from historical precedents to question whether current projections are overly optimistic. There is a call for greater scrutiny of investment in this space, emphasizing the importance of return on investment metrics amidst claims of relentless growth.
Raspberry Pi: A Small Cap Investment Opportunity
Raspberry Pi emerges as an intriguing small-cap investment opportunity noted for its success amongst technology enthusiasts and industrial customers alike. The company specializes in producing affordable, small computing devices that have gained traction significantly in both personal and commercial markets, with 75% of revenue coming from industrial clients. With a low-cost operating model utilizing older technology, Raspberry Pi maintains profitability and shows impressive revenue growth, revealing a strong market presence. Despite recent stock appreciation, the company offers appealing valuation metrics, prompting interest for further investigation as a potential investment.
The Investing Power Hour is live-streamed every Wednesday on the Chit Chat Stocks Podcast YouTube channel at 1:30 PM EST. This week we discussed:
(03:37) Disney's Acquisition of FuboTV
(06:26) Critique of FuboTV's Business Model
(09:19) Trevor Milton and Nikola's Controversy
(12:26) Emerging Share Cannibals List
(15:30) Investing Strategies and Market Psychology
(34:12) Adobe's AI Disruption Debate
(37:48) The B2B SaaS Landscape and Paycom's Position
(42:33) Block's Ticker Change and Dorsey's Leadership
(48:07) AI Data Center Build-Out Concerns
(52:07) Small Cap Spotlight: Raspberry Pi
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Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation.
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