Amazon's ruff day

MARKETS

• Crypto: Bitcoin and the other crypto big dogs climbed on Monday after BlackRock, the world's largest asset manager, said it's created a working group to explore blockchain technology.
• Trade: The IMF crunched the numbers and said that if all of the tariff threats become reality, global output would end up 0.5% below projections by 2020.
• Oil: Crude slipped after U.S. Treasury Secretary Steven Mnuchin said some oil buyers may be permitted to continue importing supplies from Iran despite U.S. sanctions.

MEDIA

For the First Time in a While, Netflix Swings and Misses

We can't say for sure, but morale is probably in the dumps in the Netflix forecasting department. The streaming company fell one million new subscribers short of its 6.2 million projection for Q2, and the stock cratered 14%.

Stranger things, indeed, especially after Netflix hit a home run in Q1.

So what went wrong?

According to Netflix, not much. It was a "strong but not stellar Q2, ending with 130 million memberships."

The problem? To justify its juiced-up stock price (it was up more than 100% on the year), Netflix needs to be stellar. It's worth more than Disney, even though it only brings in less than a quarter of Disney's revenue.

Bloomberg offered a few reasons why Netflix's sprint slowed down to a jog:

• For a company that's known for producing hit shows, the last quarter didn't introduce a major blockbuster.
• The spectacle of the World Cup could've captured mind share and eyeballs.

And it's learned its lesson for Q3, forecasting only 5 million new subscribers. That's surprising considering Netflix added 5.3 million in the third quarter a year ago.

Things are only going to be tougher from here on out

Because the #contentwars are just beginning. You might've heard AT&T acquired Time Warner (parent of HBO, CNN, and others), while Disney, Amazon, Apple, and more are all spending heavily to make a run at the crown.

But who's spending more heavily? That'd be Netflix, whose total content bill is expected to add up to $12 billion this year (the Obamas aren't cheap). Per Forbes, "This is more than any Hollywood studio will spend on a slate of movies this year."

Also on the bright side: It scooped up 112 Emmy Award nominations this year, ending HBO's 17-year streak as the nominations leader.

BANKING

Meet Goldman's Next Boss

Wall Street's Mount Rushmore is getting a new face.

Today, Goldman Sachs (+2.26%) is set to anoint David Solomon as its next CEO. He'll end up replacing Lloyd Blankfein, an iconic leader known for re-tooling the bank following the financial crisis in 2008.

But today, the spotlight's on Solomon:

• He's an investment banking vet who's been with Goldman since 1999.
• One of his main goals will be to strengthen the bank's new consumer-facing businesses. And if you haven't heard of its new brand, Marcus, prepare yourself to get hit with a marketing barrage. Marcus already offers personal loans and online savings accounts, but credit cards and mortgages could be in its future...

News to us: When you're an exec at one of the country's largest banks, you apparently have plenty of time to pursue a hobby. Solomon moonlights as an EDM DJ.

We won't have to wait long, Josh Brown. Goldman is reporting Q2 earnings today.

MEDIA

Sinclair/Tribune Deal Gets 'Serious' Shade

Don't bet the ranch—or the local news station—just yet. Federal Communications Commission Chairman Ajit Pai has "serious concerns" about Sinclair Broadcast Group's (-11.68%) contentious $3.9 billion bid to buy Tribune Media-owned TV stations.

Makes sense. The proposed transaction would create a local broadcasting Leviathan, giving Sinclair a news station in nearly 59% of U.S. markets. It's also earned Sinclair the ire of John Oliver.

Now Pai's not having it. He proposed booting the deal to an administrative law judge for further review.

• The chairman's take: "Certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law."

Sinclair has outlined plans to divest 23 outlets to comply with an FCC media ownership cap. But as Pai and other critics see it, Sinclair structured the sales so that it can continue to manage a large portion of the stations. Big red flag.

PUBLISHING

KKR Hits Play on Next Chapter

Millennials asked and KKR (+0.26%) listened. The deep-pocketed investment firm has agreed to acquire RBmedia, the largest audiobook producer in the world.

The deal could be proof there's life for books beyond Barnes & Noble. Audiobooks have quickly emerged as a bright spot in the otherwise dimming publishing industry, especially among younger readers (listeners?).

KKR offered a little insight on the burgeoning audiobook space:

• KKR estimates consumers will spend $900 million on audiobooks in 2018, up 20% from last year, per the WSJ.
• Publishers' digital audiobook revenue climbed 32% to $99 million during Q1 2018 compared to the same period last year, according to the Association of American Publishers.
• For perspective: Publisher revenue for print books only increased 6.3% and e-book sales shrank 3.2% in Q1.

RBmedia boasts more than 35,000 audiobook titles, with everything from J.R.R. Tolkien to Tina Fey, plus some Danielle Steel for the romance-lovers out there. Titles are available on smartphones, Android Auto, Amazon Echo, Apple CarPlay, Google Home, and more.

RETAIL

Amazon’s Ruff Day

Amazon (+0.52%) could be in the dog house. When its site crashed during the first hour of Prime Day, Amazon redirected eager shoppers to none other than...puppies.

Some who tried to click on "shop all deals" were sent to an error page with the "dogs of Amazon." For what it's worth, we support Amazon's bring-your-dog-to-the-office policy. But its Prime Day infrastructure? Could use work.

Other shoppers (arguably the less lucky) got stuck in a loop of nearly identical pages pushing users to "shop all deals." Some customers could add items to their cart, but received an error message at checkout. We'll see how severe the financial damage is...

WHAT ELSE IS BREWING

• Airbus (-0.06%) and Boeing (+1.51%) locked in over $43 billion worth of plane orders.
• China's Q2 GDP grew 6.7% over last year. That reflects a slight slowdown for the world's second-biggest economy.
• Tesla shares fell 2.75% after a British diver, whom Elon Musk called a "pedo guy" on Twitter over the weekend, said he is considering legal action.
• The U.S. Equal Employment Opportunity Commission has been investigating Uber over gender inequity complaints, per the WSJ.

BREAKROOM

WHAT WE'RE WATCHING
Netflix dropped a teaser for Season 3 of Stranger Things. If you're into ‘80s mall culture, this video is for you.

WHO WE'RE FOLLOWING
This one's for all you tweeters out there: Here's a comprehensive list of the most useful "Finance Twitter" accounts.

BRAIN TEASER
The square of one whole number minus the square of another whole number equals 73. What are the two numbers?

(Answer located at bottom of newsletter)

Breakroom Answers

Brain Teaser
The two numbers are 37 & 36