r/earnings

Hi, today we explore: (1) Internet inequality in America, (2) Reddit's first earnings report was revealing and (3) Real estate stocks are struggling. Good morning! Inflation doesn’t quit... Del Monte is now selling a [$395](. Today we're exploring: - Narrow bandwidth: Internet access is more uneven than you might think. - r/earnings: Reddit's first report as a public company was eventful. - Foundational weakness: Real estate stocks are lagging. Have feedback for us? Just hit reply — we'd love to hear from you! Staying connected A last-ditch bipartisan effort to save the Affordable Connectivity Program (ACP) — a government initiative that subsidizes home broadband for more than 20 million low-income households — could soon hit Congress, according to the [WSJ]( just as funding for the scheme looks set to run dry. The proposal to pump a further $7B into the program would extend the stipends, issued as $30-75 vouchers towards monthly home Wi-Fi bills, until the end of the year. The scheme has been praised for keeping seniors, minorities, and veterans (almost 50% of households that benefit are [military families]( online across the US. Given how essential the internet now is to modern life, America remains worryingly uneven in its adoption of home broadband. According to a [set of surveys]( that Pew Research Center has been running for the last 23 years, just 1% of American adults had a home broadband subscription in 2000; last year, 80% said the same. However, that growth hasn’t been mirrored across all income groups, with only 57% of adults in households where annual income is below $30K reporting a subscription to broadband at home late last year… and that was with the ACP in place. Despite a [reasonable amount]( of cross-aisle support, injecting more cash into the ACP has proven difficult. While Congress enacted the ~$14B ACP as part of Biden’s Bipartisan Infrastructure Law in 2021, the president’s request for a supplementary $6B to extend the scheme last October hasn’t gone anywhere. If the same fate befalls this latest bid, millions of Americans could lose access to the internet at home, or be forced to cut spending elsewhere. [Read this on the web instead]( r/earnings At one point yesterday, Reddit shares were up over 15% (before fading in later trading) as the social media platform posted its first set of results since going public in March. The TL;DR breakdown? Daily active users rose to 82.7 million, revenues were up 48% year-over-year, and the future apparently looks neon-orange bright, with adjusted profit in sight [for Q2](. After perhaps the highest-profile IPO of 2024 so far, there were a lot of eyes on the company’s inaugural earnings report yesterday... not least because execs staged an ask-me-anything of sorts, fielding a couple of — [admittedly stuffy and heavily-screened]( — questions from Redditors on the call. One revelation that surprised some less-initiated observers, however, was actually about the platform’s active users themselves. Despite its origins (the site’s basically a huge hub of niche online forums where users can interact with people who share the same fixations), a lot of Reddit’s daily users might not be as invested as the platform’s format presupposes... or as Reddit execs would ideally like. Indeed, just ~48% of its daily active users are logged in when using the platform, meaning that the majority of Reddit visitors are only able to view posts, rather than make or comment on them — perhaps a troubling data point for a platform that’s defined by user-generated content more than most other [social media](. It also means that less info can be collected about each logged-out user (arguably good for the individual, bad for targeted advertising). It’s interesting to note that logged-out users were up 47% year-on-year, while the number of Redditors who were logged in grew 27%, with most of the former category coming from Google, according to CEO [Steve Huffman]( leading some analysts to ponder Reddit’s dependence on the search engine. [Read this on the web instead]( Foundational issues While the broader S&P 500 has soared to record highs this year, up some 9% at the latest count, one sector has remained in the red for most of 2024: real estate. Indeed, the XLRE, an ETF designed to track the real estate segment of the S&P 500, is down 7% in 2024. That makes it the worst performing of any S&P 500 sector — an undesirable title which it also holds over 3-year, 5-year, and 10-year lookback periods. So, what’s going on with real estate? Some analysts would argue that it’s all about rates. Real estate has historically been a comfortable, safe place to park your money and earn a yield from rent-producing assets like offices, retail space, or residential properties. When rates rise — as they have done over the last 24 months — other opportunities to invest and earn a good return crop up, making real estate look less attractive. That is certainly part of the puzzle. Another is arguably more structural: in the post-pandemic world, we might simply have too much office and retail space, which many REITs (Real Estate Investment Trusts) and real estate stocks own a lot of… usually with borrowed money. Indeed, as of the first quarter, office vacancy rates have hit a 40-year high, just shy of 20%, according to [Moody’s Analytics](. As demand stagnates and leases come up for renewal, commercial real estate is being sold at significant discounts, with some buildings that have been empty for years selling for pennies on the dollar in [New York]( [San Francisco]( [St. Louis]( and elsewhere. The flip side: The one part of real estate that’s booming? [Demand for space for AI data centers]( which jumped 26% last year. [Read this on the web instead]( More Data • 33% of content writers updated their LinkedIn profile to add AI to their skills, per [new data]( from Microsoft. • FTX might be able to [repay almost everyone]( with creditors owed less than $50k expected to get more than they actually put in. • The Green Apple: 1 in 24 New York City residents, some 350K people, [are now millionaires](... more than any other city globally. • Apple released a new iPad and it’s really thin. It was announced [with a weird ad]( that showed pianos, paint cans, cameras, and books being crushed into the iPad itself. Hi-Viz • Digital deepfakes of [Met Gala attendees]( are fooling thousands of users on social media. Off the charts: Which video game company has finally revealed a timeline for announcing the successor to its core line of consoles? Hint: Sales of its latest console peaked in 2021. [Answer below]. [Answer here](. Thanks for stopping by! Have some [feedback](mailto:daily@chartr.co?subject=Feedback&body=Hi%2C%0A%0AI%20like%20the%20newsletters%2C%20but%20I%20had%20a%20thought%20for%20you...) or want to [sponsor]( newsletter](mailto:james@sherwoodmedia.com?subject=Chartr%20NL%20Sponsorship%20Enquiry%20)? Not a subscriber? Sign up for free below. [Subscribe]( Copyright © 2024 CHARTR LIMITED, All rights reserved. You are receiving this email because you opted in via our website. 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