• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu
april@madhedgefundtrader.com

Death of Legacy Media

Tech Letter

Negotiations between Spectrum’s parent company, Charter Communications (CHTR), and Walt Disney (DIS) finally got over the impasse and they struck a deal.

No deal for both would have been catastrophic for both.

Disney faced the potential loss of 14.7 million Charter pay TV subscribers, or 20% of ESPN's current linear subscriber base of 74 million.

That equates to linear revenue losses of roughly $5 billion, or 6% of overall revenue.

Cord-cutting has been occurring at a brisk pace in the last few years, but the lack of solidarity among the legacy media negotiators appears to turn the trickle into a breaking of the dam.

What am I talking about?

Disney decided to go nuclear by removing its channels from the cable provider. Charter (CHTR) proposed that Disney (DIS) offer its customers free access to Disney’s streaming services, especially ESPN; Disney rebuffed the offer, but CHTR finally agreed to add Disney+ Basic ad-supported offering being provided to Charter customers who purchase the Spectrum TV Select package at no additional cost, "as part of a wholesale arrangement."

This is really the beginning of the end for legacy media and this melee could trigger a swift bout of consolidation as disagreements become the norm and not the outlier.

It’s no surprise the cost of creating content is going up and these channels like DIS feel they can just pass the costs

Remember that many people pay for cable just to watch college football and the NFL.

Roughly 25% of Charter’s clients engage with Disney content, Charter said on a call last week.

DirecTV is also embroiled in its own content squabble with local broadcast network Nexstar (NXST), which recently pulled over 200 stations in more than 100 metro areas from DirecTV’s network over a similar price dispute.

While the cable TV business has been declining for years, there’s concern this is the last hurrah.

Down the road, the winners out of all of this may be internet TV operators, including YouTube TV, Hulu TV, FuboTV, and Dish’s DISH’s (DISH) Sling. Some of these have been gaining steady traction even before negotiations soured, with Hulu’s web traffic up 7.2% year-over-year in July and Sling’s traffic up 11.8%.

Web traffic may pick up as consumers look for ways to watch their regularly scheduled programming. Online search interest in five major live TV streaming services picked up Sept. 1 when news of Disney’s blackout became public, according to Google Trends data.

I believe that online momentum will translate to a long-term subscriber bump for these companies.

CEO of CHTR Christopher Winfrey and CEO of DIS had to make this deal.

The ongoing chaos in the legacy media markets signals that cord-cutting will supplant the legacy markets within the next 10 years.

Baby Boomers are the last stalwarts of the legacy media market and they are retiring in droves.

Netflix (NFLX) is another streamer that is in line to pick up some of the demand for streaming content.

With high rates, the era of excesses is rearing its ugly head.

Platforms are being careful with the type of agreements they make as less quality content is facing a bleak future.

Live professional sports are lynchpin to why many consumers don’t quit cable.

I believe the next contract cycle will see many pro sports leagues go all streaming much like the American soccer league MLS did with Apple TV.

When pro sports migrate 100% into digital, expect to be outsized winners and losers while distributors like SlingTV should sink like a rock.

 

 

 

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2023-09-11 16:02:152023-09-11 18:40:48Death of Legacy Media
april@madhedgefundtrader.com

September 11, 2023 - Quote of the Day

Tech Letter

“A good sign as to whether there’s free speech is: Is someone you don’t like allowed to say something you don’t like? If that is the case, then we have free speech.” – Said Owner of X formerly Twitter Elon Musk

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2023-09-11 16:00:142023-09-11 18:40:07September 11, 2023 - Quote of the Day
april@madhedgefundtrader.com

September 8, 2023

Tech Letter

Mad Hedge Technology Letter
September 8, 2023
Fiat Lux

Featured Trade:

(THE SUSHI HITS THE FAN IN CUPERTINO)
(APPL), (MCHI),

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2023-09-08 15:03:372023-09-08 15:34:11September 8, 2023
april@madhedgefundtrader.com

The Sushi Hits the Fan in Cupertino

Tech Letter

When it rains – it pours. Let’s talk about China (MCHI) and Apple (AAPL) CEO Tim Cook.

I admit that I was quite harsh on Tim Cook 7 years ago when writing this Mad Hedge Technology letter.

I routinely delivered scathing critiques of him and perpetuated the narrative that he was only an operations guy.

Then I lightened up as he drove the company to higher highs even though the company didn’t foray too far from its bread and butter the iPhone. 

My fierce criticism revolved around Cook betting the ranch on an Eastern adversary at a time when deglobalization started to pick up pace.

After knocking out the $2 trillion market cap and vaulting past $3 trillion, I gave Cook a pass for the time being.

Fast forward 7 years and the sushi has hit the fan and Cook has an absolute fiasco on his hands.

The trouble brewing in China is not necessarily entirely his fault, but sleep with the enemy, and it is hard to whine about the consequences.

In one fell swoop, 60 million hardcore Apple customers are dropping Apple products.

It’s a swift kick in the nuts for Cook.

Funnily enough, just a few months ago, Tim Cook was one of the few U.S. CEOs to venture to China after its reopening with his usual kowtowing to the communist party.

In March, he declared that Apple and China had a “symbiotic kind of relationship.”

It is bizarre to hear such an important figure in the American technology apparatus so infatuated with the Chinese.

Beijing is ordering officials in all departments to stop using iPhones.

Then Beijing extended the ban to state-owned enterprises.

How important is China to Apple?

China is key to Apple’s supply chain and to its sales.

About half of Apple’s smartphones are made in a giant factory complex in Zhengzhou, nicknamed “iPhone City”, operated by electronics manufacturer Foxconn.

China is also a significant consumer market for Apple, as it is the largest market outside the U.S. The company generated $15.8 billion in sales from China alone last quarter, 20% of its total.

Chinese consumers gravitate to the iPhone too: Apple has 65% market share for premium phones over $600.

There is a big element here in getting Chinese people to use their own smartphones.

I know many people who use Chinese smartphones because they are flagship quality but 40% cheaper than iPhones.

The only piece lacking is usually the Apple quality high-end camera, but most people don’t use their phone for a high-definition YouTube channel.

My sense is that the 60 million white-collar Chinese people will grumble about the brand downgrade to Huawei or Xiaomi, but the drop-off in performance isn’t so crazy that they are willing to go rogue and find a roundabout way to use an iPhone.

This sets the stage for all Apple products to get banned full-stop in China which is 20% of Apple’s revenue.

That includes Apple watches, earbuds, computers, and the whole shebang even the services part of the equation.

Deglobalization is rearing its ugly head again and this event could be a catalyst to take Apple shares back down to more affordable levels.

I would look at buying the dip once this negative news works itself through the system.

However, this event is akin to the tech sector getting stunned with a left hook to its face, and it will take time to recover don’t expect any American corporations to do business in China anytime soon under these souring conditions.

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2023-09-08 15:02:392023-09-08 16:39:50The Sushi Hits the Fan in Cupertino
april@madhedgefundtrader.com

September 8, 2023 - Quote of the Day

Tech Letter

“The art of living is more like wrestling than dancing.” – Said Roman Leader Marcus Aurelius

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2023-09-08 15:01:352023-09-08 15:32:28September 8, 2023 - Quote of the Day
april@madhedgefundtrader.com

September 6, 2023

Tech Letter

Mad Hedge Technology Letter
September 6, 2023
Fiat Lux

Featured Trade:

(SEPARATING THE WHEAT FROM THE CHAFF)
(PTON), ($COMPQ), ($TNX)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2023-09-06 15:32:092023-09-06 15:32:09September 6, 2023
april@madhedgefundtrader.com

Separating Wheat From the Chaff

Tech Letter

Part of the excesses that became ubiquitous with Silicon Valley is starting to get reigned back and that’s a good sign for the tech sector ($COMPQ).

It also means the boom years for the tech sector are over.

I am not talking about the full set of perks tech employees receive at their fingertips in order to entice them to spend most of their time at the office.

I am more referring to ideas that were hyped up as grand but never made a material dent in the tech ecosystem.

Not all tech ideas hit it big and some are complete busts.

Ideas like the Uber of battery-powered scooters are now getting the thumbs down and capital is getting pulled by from these marginal business concepts.

From the get-go, these companies presided over poor unit economics and they could only sustain operations in a world of cheap capital that doesn’t exist anymore.

Rates ($TNX) are high and could shoot higher.

Legally, cities have a say in whether they want their beautiful promenades and piazzas littered with ugly scooters.

In France, Parisians voted to ban battery-powered scooters, confirming that many regarded them as absolutely infuriating.

Banned from the French capital by popular vote, self-service electric scooters are enjoying their last day in Paris on Thursday, marking the end of five tumultuous years of controversial use, much to the dismay of their users.

From 1 September, Paris will become the first European capital to completely ban these self-service two-wheelers.

Many Parisians have become fed up with seeing them as not only an eye sore but also a safety hazard.

Since August, the 15,000 scooters have gradually been taken off the streets.

Of the 5,000 scooters going out to pasture produced by the German company Tier, a third will remain in the Paris region, in 80 communes around Marne-la-Vallée or Saint-Germain-en-Laye. The rest will go mainly to Germany.

In Paris, some 400,000 people chose a scooter to get around in 2022, according to operators.

The operators are banking on their customers switching to bicycles, which are already offered by everyone, which should enable them to avoid redundancies, at least for the time being.

There most likely will never be another boom of battery-powered scooter platforms dressed up as technology companies.

These types of low-quality tech firms are feeling the heat and examples are plentiful such as Peloton (PTON) which has also hit rock bottom.

The next big idea down the pipeline is generative artificial intelligence, but even that has been dialed back somewhat after stocks were priced in for parabolic growth rates.

As the expectation for better technology ideas results in the need to improve business models, there seems to be no room for bottom-of-the-barrel tech like the Uber of battery-powered scooters.

It seemed like a bad idea from the start so it’s surprising it took this long for them to get exposed.

Moving forward, expect tried-and-tested brand names in tech to outperform these mediocre businesses. It’s never been more difficult to grow tech companies with these high interest rates and the death of bad tech ideas will go into overdrive as interest rates continue to surge.

This will help our trading because knowing the pulse of the tech sector is half the battle.

 

 

 

 

 

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2023-09-06 14:02:032023-09-06 15:32:34Separating Wheat From the Chaff
april@madhedgefundtrader.com

September 6, 2023 - Quote of the Day

Tech Letter

Quote of the Day

“It is easier to find men who will volunteer to die, than to find those who are willing to endure pain with patience.” – Said Roman Leader Julius Caesar

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2023-09-06 14:00:532023-09-06 15:33:44September 6, 2023 - Quote of the Day
Mad Hedge Fund Trader

September 1, 2023

Tech Letter

Mad Hedge Technology Letter
September 1, 2023
Fiat Lux

Featured Trade:

(BEST BUY PUTS IN A SHIFT FOR TECH)
(BBY), ($COMPQ)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2023-09-01 15:02:002023-09-01 15:37:59September 1, 2023
Mad Hedge Fund Trader

Best Buy Puts in a Shift for Tech

Tech Letter

When interest rates go from zero to 5%, fundamentals tell investors that tech stocks are the most likely to drop.

This was an ironclad rule of the market for centuries until it wasn’t.

In 2023, tech stocks ($COMPQ) continue to climb a wall of worry with this fantasy deriving from the Fed is about to “pivot” narrative.

Traders still believe that the Fed is going to turn around and slam the breaks on this quantitative tightening cycle to breathe life into the economy.

Tech stocks and bond yields going up in tandem is highly rare and the Mad Hedge Technology Letter was able to catch the wave of excitement in the first half of the year.

The Fed pivot is based on people with money believing the Fed will just bail out the whole stock market once things go sour.

Hence, the good news is the bad news paradigm we keenly observe in tech stock price action.

Another data point dropped in the tech market with retailer Best Buy delivered its earnings report.

They issued another unspectacular report with a lowered outlook.

For many tech companies, the lockdown sales will never go back to 2021.

I feel like a broken record here because tech earnings are doing just enough to hop over the low bar. Best Buy (BBY) is just another one of emblematic of tech performance today.   

Comparable sales, a key metric that includes sales online and at stores open at least 14 months, decreased 6.2% compared with the year-ago period as customers bought fewer appliances, home theaters, and mobile phones. Gaming systems, on the other hand, were sales drivers in the quarter, the company said.

Best Buy is seeing a reversion to pre-lockdown sales levels analogous to Home Depot and Lowe’s, Best Buy profited from lockdowns, fueled by big purchases that people don’t frequently repeat.

Over the past year, consumer electronics retailers have borne the brunt of disastrous Bidenflation and consumers’ shift back to spending on experiences.

Management said the company is on track with its brick-and-mortar plans for the fiscal year. The company plans to close 20 to 30 stores, remodel eight stores to turn them into more experiential shops, and expand outlet stores from 19 to about 25.

The past 2 weeks have reverted back to the tech bulls as they pull us back from the latest weakness in July.

It’s almost getting comical at this point that we are inching back to all-time highs when so many tech companies aren’t doing anything special in terms of not only growth but negative revenue trajectory.

This isn’t the stuff of legends and in a normal world, these aren’t the type of earning reports that fuels bullish price action.

However, since the Fed is perceived as bail-out trigger-happy, investors are juicing up the stock market based on this hope that the Fed will reroute rates back to 0% when the economy needs to be saved. As long as this counter-intuitive narrative persists and tech companies don’t deliver ugly earnings, the pain trade is ostensibly higher. Welcome to the world where Best Buy does -6% sales, iPhone sales sink, yet we go higher and higher.

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2023-09-01 15:01:352023-09-01 15:46:04Best Buy Puts in a Shift for Tech
Page 64 of 314«‹6263646566›»

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Scroll to top