☕️ Instagram is reeling

Why did Netflix stock drop? July 17, 2020 [View Online]( | [Sign Up]( [Daily Brew]( TOGETHER WITH [Paycom]( Good morning. What is the first palindrome you think of when someone brings up palindromes? We [asked Twitter]( and here were some responses: - Tacocat - Sit on a potato pan, Otis - Socorram-me, subi no ônibus em Marrocos (a Portuguese sentence meaning, "Help me, I got on the bus in Morocco") - Mr. Owl ate my metal worm This newsletter is dedicated to all Brew readers named Otto, Ana, Anna, Hannah, Nan, or Bob. And to mom and dad. MARKETS NASDAQ 10,473.83 - 0.73% S&P 3,215.59 - 0.34% DJIA 26,734.64 - 0.50% GOLD 1,795.10 - 1.03% 10-YR 0.621% - 1.10 bps OIL 40.72 - 1.17% *As of market close - Housing: Picture a limbo stick that’s barely an inch off the floor—that’s mortgage rates right now. The average rate on the 30-year home loan crossed a key threshold to [2.98% this week](, the first time it’s been below 3% since they started keeping track. - COVID-19 update: The Republican National Committee is [downsizing]( plans for its upcoming convention in Jacksonville, FL. Brazil has suffered at least [76,000 deaths](, and India reported a [record number]( of new cases. C-SUITE [Execs of Bankrupt Firms Get Participation Trophies]( [Economic recovery] Francis Scialabba Lucky you—this Friday newsletter has not one but two news quizzes. What do the following companies have in common? - JCPenney - Chesapeake Energy - Hertz - Chuck E. Cheese parent CEC Entertainment - Neiman Marcus Group - Whiting Petroleum If you guessed “all filed for bankruptcy,” you’re almost right. All of those companies [paid execs bonuses]( riiiight before flipping to Chapter 11. - According to Bloomberg, 19 of the roughly 100 companies that have filed for bankruptcy during the pandemic have also committed to paying out executive bonuses. Zoom out: Dropping dimes on the c-suite just before bankruptcy isn’t unprecedented. But as you’re probably sick of hearing, a lot of other things happening now...are. The historic economic crisis currently gripping the U.S. has some analysts questioning the timing of those payouts. The case for bankruptcy bonuses: Proponents say the idea is to hold on to leaders who can maintain stability through a turbulent time. Ian Keas, principal at executive compensation consulting firm Pearl Meyer, told Bloomberg, “Board members want the people that know the business.” The case against: When someone spills a jar of M&M's, you don’t let them keep their candy manager job—meaning bankruptcy doesn’t bode well for an exec’s track record. It looks especially bad when the bankrupt company let 10,000 North America employees go in the not-too-distant past, as [Hertz did](. It’s also a sneaky legal move Distributing bonuses just before a bankruptcy filing means that money can’t be used to pay back creditors. They can try challenging, but it’s tricky and expensive. Perhaps a sign of things to come: A DOJ lawyer [told]( Neiman Marcus it could only pay its CEO and other top execs bonuses if they can prove they increased earnings. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Companies%20Hand%20Out%20Bonuses%20to%20Execs%20Right%20Before%20Filing%20for%20Bankruptcy:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 ECONOMY [Economic Recovery: Handle With Care]( New data shows the economy is getting better...but recovery is fragile and largely dependent on historic government intervention. Retail sales for June [gained 7.5%](, a sign that Americans started spending again as states eased lockdowns and people received a heavy dose of extra income from the government. If you exclude purchases at gas stations—which fluctuate widely based on oil prices—retail sales just climbed back to a record high. - Rising COVID-19 caseloads could put the momentum in retail sales at risk in July.  @bespokeinvest Trend tracking: Spending at sporting goods, musical instrument, book, and hobby stores grew 20.6% annually. Sales at buildings materials stores jumped 17.3%. On the unemployment front The story is pretty much the same as it has been for three months—a [huge number of people]( filed unemployment claims for the first time (1.3 million last week), but that number is slowly declining over time. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Retail%20Sales%20Excluding%20Gas%20Stations%20Climb%20Back%20to%20Record%20High:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 MEDIA [Netflix Binges on Topline, Chills on Guidance]( Yesterday, Netflix [reported Q2 earnings]( that leave you like an episode of Stranger Things: overall satisfied, but a little queasy. The details: Netflix beat Wall Street’s revenue expectations, bringing in $6.2 billion during what we'll now call the quarantine quarter. But it missed profit expectations at $1.59 earnings per share. - What about subscribers? Netflix notched 10.1 million net additions globally, running circles around the 8.3 million expected. - Extraction, a Chris Hemsworth-led film that dropped in Q2, was Netflix’s [most popular]( original movie ever. But Q3 will be a darker episode Netflix projects it will add 2.5 million net subscribers globally...compared to expectations of 5.3 million and 6.8 million in the same quarter last year. Shares fell about 9% after hours—though they had been up more than 60% on the year. - The good news? The pandemic didn't disrupt production for most 2020 programming. + While we’re here: The company is shaking up the c-suite, announcing that Chief Content Officer Ted Sarandos will become co-CEO with Reed Hastings. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Netflix%20Reports%20Strong%20Q2%20Earnings%20but%20Muted%20Q3%20Expectations:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 SPONSORED BY PAYCOM [Give Human Resources Back to the Humans](#) [Paycom]( When we hired our VP of Human Resources, Kate, here at Morning Brew, she came in and just started crushing it. She’s become so legendary, we’re actually changing her title to Goddess of All Resources for Humans. But even a divine HR leader such as Kate knows the importance of using the right platform and tools to help a company succeed. [Paycom]( is just that. Their simple, comprehensive HR and payroll software empowers employees to access, manage, and update their own HR data—from benefits and PTO to direct deposit and everything in between. By giving everyone access to a robust [suite of products]( under one system, HR leaders like Kate can focus their HR prowess on things like driving greater business growth. You can’t have Kate, but you can still [achieve wonders with Paycom](. SOCIAL MEDIA [Instagram Is Reeling]( [Instagram Reels] Instagram TikTok may hold the devotion of Gen Zers too young to know Destiny’s Child, but the Chinese-owned video app is getting the cold shoulder from a growing contingent of D.C. lawmakers. Facebook is ready to jump in. After months of testing, Facebook [plans on launching]( Instagram Reels in the U.S. and 50+ international markets this August. Reels lets users create and share 15-second video clips with easy editing and remixing tools, a big music catalog, and a featured section for discovery. - If you’re wondering whether FB copying TikTok will work...Snap CEO Evan Spiegel probably has some thoughts about Stories. Facebook began testing Reels in Brazil last November, and in the last few weeks expanded to France, Germany, and—days after TikTok was banned in the country—India. As conversations around a U.S. ban heat up, Facebook wants to use its 3 billion user-strong ecosystem to [ward off]( other video apps like Triller, Dubsmash, and Byte. Bottom line: Zuck’s sitting in his Menlo Park tower bursting with schadenfreude for every headline about TikTok’s woes. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Facebook%20Prepares%20Launch%20of%20TikTok%20Competitor:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 SOCIAL MEDIA [On World Emoji Day, a Brief History of the Emoji]( In 1999, a Japanese artist created the first emoji, but it wasn’t until 2010 that the IT standard Unicode [accepted]( the first cohort of 625 emojis. The next year, emoji keyboards were batched into the iOS update. - and ¯\_(ツ)_/¯ became—well, we actually didn’t get an emoji for that until 2016. Unicode crowdsources emoji requests (really, you can submit your own right [here](), so the language has evolved to reflect broader changes in society. 2015: Users were allowed to choose from [five shades]( of skin tones in addition to the existing, very natural-looking yellow (if you’re a Simpson). 2016: Apple swapped the pistol emoji for a water gun, reflecting a growing unease with depictions of firearms in the years following Sandy Hook. Google, Samsung, and Twitter all made [the same change]( in 2018, the year of the Parkland school shooting. 2020: The raised fist emoji was actually accepted into Unicode in 2010, but it took on a bigger meaning this year. An [Emojipedia]( analysis shows use of the raised fist emoji in darker shades spiked in May and June, when it became the unofficial emoji of the #BlackLivesMatter movement. What’s next? Well, during simpler times (December), a petition for a Baby Yoda emoji was [gaining traction](. But with the way things are going, we think a dumpster might be requested to pair with instead. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=On%20World%20Emoji%20Day,%20a%20Brief%20History%20of%20the%20Emoji:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 QUIZ [Quiz By the Ocean]( [Weekly news quiz]( There's only one thing standing between you and the weekend, and it's acing the Brew's weekly news quiz. Go 5/5 or don't stop playing until you do. [Take the news quiz](. SPONSORED BY SAKARA [Sakara ]( We think we might have super powers. Or maybe (read: definitely) it’s [Sakara’s Metabolism Super Powder](. Their bestselling plant-based powder fires up your digestive system to restore your metabolism, eliminate bloat, enhance energy, and control your cravings—naturally and stimulant-free. For a limited time, Brew readers can enjoy [15% off their order](. WHAT ELSE IS BREWING - [Authorities]( in the U.S., UK, and Canada said that an espionage organization linked to the Russian government is targeting developers of a COVID-19 vaccine. - [The CDC]( extended its ban on U.S. cruises through Sept. 30. - [American Airlines]( and JetBlue formed a partnership which execs say will allow for a quicker recovery. - [Morgan Stanley]( and [Bank of America]( both showed reasons for optimism and pessimism in their earnings reports. - [Michelle Obama]( is hosting an interview-style podcast on Spotify that'll debut on July 29. BREW'S BETS Take a masterclass on productivity: The Brew is partnering with Nir Eyal to bring you Becoming Indistractible—a two-week course designed to make you a more productive, less distracted professional. Registration closes on Sunday and spots are filling up, so [sign up today](. Follow Friday: You may have seen the[@whatdogyouare]( account making the rounds this week, but have you seen [@whatplaneyouare](, [@whatferretyouare](, and [@whichguyareyou](? Tired of looking outside your window? Look through someone else’s. WindowSwap is a wild website that lets you peek through the windows of houses around the world. [Check it out](. Play this Mad Libz game: We'd spend time describing how it works, but just take our word that it is very fun and the perfect Friday activity for you and your coworkers. [Try it out](. FROM THE CREW [Our 'Business Casual' Podcast Has Two Questions for You](#) [Business Casual]( 1. Are you keeping up with the future of social media? - [The Fat Jewish]( takes us behind the scenes of the influencer economy. Disclaimer: This is our funniest episode. - [Connie Chan](, general partner at Andreessen Horowitz and expert on the relationship between China and Silicon Valley, predicts the future of consumer tech and e-commerce. - [Ian Borthwick from SeatGeek]( gives his good friend David Dobrik a call and helps us understand the keys to successful influencer marketing. 2. Can you help host Kinsey Grant with her next episode? Reply on [Twitter]( or email Kinsey at kinsey@morningbrew.com. FRIDAY PUZZLE Today's Friday Puzzle is dedicated to World Emoji Day. We'll give you a string of emojis, you have to decode the movie it's describing. Example: is Raging Bull 1. 2. 3. 4. 5. SHARE THE BREW When you share the Brew, you earn rewards. From Brew swag like t-shirts and coffee mugs to exclusive content, we've got something for everyone in our premier rewards program. [Click here to get free swag.]( Hit the button below to start sharing the Brew. [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=a905682a]( FRIDAY PUZZLE ANSWER 1. The Wolf of Wall Street2. The Silence of the Lambs3. Princess Diaries 4. Airplane! 5. Rush Hour 3             Written by [Jamie Wilde](, [Eliza Carter](, [Alex Hickey](, and [Neal Freyman]( Was this email forwarded to you? Sign up [here](. WANT MORE BREW?  Retail newsletter → [Retail Brew](  Tech newsletter → [Emerging Tech Brew](  Marketing newsletter → [Marketing Brew](  Quarantine newsletter → [The Essentials](  Business podcast → [Business Casual]( [ADVERTISE]( // [CAREERS]( // [SHOP]( Update your email preferences or unsubscribe [here](. View our privacy policy [here](. Copyright ©2020 Morning Brew. All rights reserved. 40 Exchange Pl., Suite #300, New York, NY 10005