Here’s what you need to know today

• The brewers of the Inspired Unemployed’s Better Beer has gone into administration. ASX-listed Mighty Craft (ASX: MCL) owns 33% of Better Beer told the market it was unable to service its debt. Better Beer has been one of the fastest growing beers in Australia, with sales growing 32% to $26.1 million in the six months December 2023. 
  
  

• Struggling toy maker Mattel may be getting a private equity buyout, with L Catterton reportedly approaching the US company with an acquisition offer. Mattel is the company behind Barbie, Hot Wheels, Fisher Price, Uno, Barney and about 50 other toy brands. Despite a bump when the Barbie movie was released, Mattel’s share price is down 20% in the past 12 months.
  
  

• Spotify’s remarkable recovery continues. The company reported a 45% increase in profits in the second quarter and added 26 million more paying subscribers. After the share price fell 80% between 2021 and 2022, the stock is up more than 350%.
  
  

• After shoring up enough delegates to secure the Democratic nomination for President, Kamala Harris held her first presidential campaign rally in Wisconsin. In the past few days Harris has also secured the endorsement of senior party leaders including Nancy Pelosi, Chuck Schumer and Hakeem Jeffries.
  
  

• Results of a review by Australia’s market regulator ASIC has found that Australia’s stock market is among the best globally for market integrity. As part of the review ASIC plans to expand its market monitoring to private markets and consider how to discourage media leaks ahead of major announcements.

What the…?

From payments to music streaming, Apple has had plenty of success leveraging its huge user base to push into different industries. Despite spending $20 billion (yes, billion with a B) on original programming for AppleTV+, the tech giant only has 0.2% of US TV viewership. 

For context, Netflix reportedly gets more views in 24 hours than AppleTV+ gets in a month. Now Apple executives are starting to ask if it has been worth it.

Investing is a lifelong journey

Here’s what you can learn today.

Is Warner Bros. Discovery about to be broken up?

Legacy media and cable companies have been doing it tough recently. Legacy news outlets like News Corp and Nine Entertainment have seen layoff after layoff. Cable companies like Disney and Paramount Global have struggled to keep up in the transition to streaming. But perhaps the legacy media company under the most pressure has been Warner Bros. Discovery.

Since forming in 2022, the owner of CNN, HBO, TNT, Warner Bros and the Discovery network has seen its share price fall 65%. The biggest concern for investors is how the $20 billion company will continue to service its $40 billion in debt.

Now rumours are rife that the company is planning to spin off assets to separate its struggling legacy TV and cable business from its streaming division.

The authors of this article argue that the company is starting to look like a value opportunity, trading at just 3x its cash flows. Even accounting for its debt, the company’s enterprise value (market capitalisation + net debt) is 8x free cash flow, far cheaper than Disney (26x enterprise value-to-free cash flow) and Netflix (41x enterprise value-to-free cash flow).

It is an interesting thesis to consider and we have no doubt that there will be opportunities in the fall out from the struggles of legacy media. But over the past few years bad news has followed Warner Bros Discovery like nothing else. So we’ll remain skeptical and be watching with interest when the company reports its half year results on the 7th of August.

This email is thanks to Australian Property Scout

Join Sammy Gordon, Equity Mates’ regular property expert, as he is joined in the studio by Nick Wilcox, long term client and mortgage broker. 

In this ep, Nick breaks down how he aggressively built his portfolio out over a 3 year window. What he looked for in his investments, how partnering with Sam changed his strategy, where rentvesting came in and what the end result was from his investing foray.

The two also discuss Nick’s plans for the future, and what he intends to do after selling the lion's share of his portfolio and banking over $2,500,000 to fund his dream home.

This episode truly is an inspirational story of what is possible when someone fully commits to a path. Prepare to be inspired by Nick’s impressive journey.

Tune in to this episode on the Scouting Australia Podcast on all your favourite listening platforms.

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