️ Rejected

MARKETS

• U.S. markets: Stocks rose after Netflix added some rocket fuel to the mix (more on that in a sec). The Dow and S&P both climbed above key technical levels.
• Energy: China's move? Introduce policies to stabilize its slowing economy. U.S. crude's move? Up.

MEDIA

Netflix Thinks Knows You’ll Pay More for Netflix

Netflix is raising prices in the U.S. between 13% and 18%. So, for example, if you're signed up for the standard plan (which is the most popular), you'll soon pay $13/month instead of $11.

The details: The new price points will go into effect immediately for new subscribers, and will be gradually rolled out in coming months for existing customers.

What we learned today: 1) It's the largest price hike since Netflix launched its streaming service 12 years ago, and 2) There was a world in which Netflix had not yet launched its streaming service.

So how should we interpret this?

Netflix is acting as if it downed the mind-expanding pill from Limitless.

• The definition of "confidence": It's raising prices in its most competitive market—one that's only getting more heated (with rival platforms from Disney, AT&T, and NBCUniversal on their way), according to media guru Matthew Ball.
• Because here's the reality: "Netflix puts out so much volume a multi-user family has simply absorbed the bill; doesn't think about the cancellation decision each month. Once you hit this point, you're hydroplaning."

Quick break for popcorn and context...

Zoom out: Netflix is on a content bender like no other—it's expected to splurge $12 billion on licensing and creating shows/movies this year. With a budget like that, some question Netflix's long-term financial health, but investors appear more than willing to feed its content addiction.

• Since their low on Christmas Eve, Netflix shares had been up close to 50%...and they climbed another 6.5% yesterday on the news.

Looking ahead...Netflix reports earnings tomorrow afternoon.

BREXIT

Choose Your Own Adventure: Brexit Edition

It's no Bandersnatch, but after U.K. Prime Minister Theresa May's Brexit plan was rejected in historic fashion (432-202) by lawmakers yesterday, there are an endless number of options on the table.

Assuming May survives a no-confidence vote today...

Option #1: Try again. May could go back to the EU and try to work out a deal that would be more popular in Parliament.

Option #2: Delay. The current deadline for British withdrawal from the EU is March 29, but the government could ask for an extension in the hopes that they'll agree to a framework.

Option #3: A "no-deal" Brexit. The U.K. would leave the EU without any plan. This is the outcome businesses fear most, and why many are stockpiling goods to cope with the potential chaos.

Option #4: A second referendum. This option would flip the Brexit question back on the same voters who chose to leave the EU in the summer of 2016.

Options #5, #6...#27,332: Read up here.

MARKETING

Gillette Walks a Razor-Thin Line in New Ad

Gillette released a new ad this week...but it wasn't the same old shirtless-in-the-mirror, five-blades-of-glory spot. It had a distinct air of the #MeToo movement, challenging, "Is this the best a man can get?" For many, it raised goosebumps. For others, heckles.

If you haven't watched it yet: The ad provokes viewers to take on issues including sexual harassment and toxic masculinity, praising those who've abandoned "the same old excuses."

• In one camp, viewers lauded it as "pro-humanity" and "beautiful." Others dubbed the ad "condescending" and "virtue-signaling."
• Gillette's response? "We expected debate...If we don't discuss and don't talk about it, I don't think real change will happen," a brand director told CNN.
  It's not the first time Gillette parent Procter & Gamble (+0.94%) has dipped a toe in social issues. Remember P&G's Pantene with the "Strong is Beautiful" campaign? Or its Always #LikeAGirl movement?

Zoom out: Controversial ads aside, Gillette has struggled to maintain its edge thanks to newcomers Harry's (which just raised $112 million) and Dollar Shave Club (which was bought by Unilever for $1 billion in 2016).

INTERNATIONAL

What Goes Down Better Than Pepsi?

How about the "most powerful job in international development."

That could be former PepsiCo CEO Indra Nooyi's next LinkedIn update. She's reportedly in the running for World Bank president, according to the NYT.

• Disclaimer from our lawyers: The World Bank leadership search is in its early days, so don't make that $100 bet with your friends yet. Soon-to-be former head Jim Yong Kim is on the job until Feb. 1.

Still, Nooyi has been called a "mentor + inspiration" by Ivanka Trump, who rounds out the committee tasked with nominating a new World Bank leader.

What makes the job search so important? All 189 World Bank member states elect the president in an "open, merit-based and transparent" process. But that process typically favors American men, given the gentleman's agreement that the IMF chief is always European and the World Bank chief American.

Hit us with a bottom line, Axios: "The Europeans have never been less inclined to scratch the Americans' back. If Trump were to nominate a well-qualified candidate like Indra Nooyi, then they would probably go along with the nomination."

+ Let us save you a round-trip ticket to Google...here's what the World Bank does.

MARKETS

Drama and Intrigue at the SEC

Did we get your attention? Good—those words usually do the trick.

The U.S. has charged a group of suspected hackers and traders with one dastardly scheme: stealing info from the SEC database to execute stock trades on market-moving corporate news...before the news was public.

Authorities said the scheme netted $4.14 million in illegal trading profits for the accused (who hail from the U.S., Russia, and Ukraine). One inside trader reportedly made $270,000 in a single day...or ~4.6x the median annual household income in the U.S.

How'd they do it?

• The DOJ said schemers sent fake emails to SEC employees, then used that correspondence to hack into EDGAR, the SEC's corporate filing system public companies and money managers use to disseminate information.
• The hackers made their own trades and sold the stolen insider info to other illicit traders from May to at least October 2016.

It's a bold strategy, Cotton. The group in question moved on to hack the SEC after U.S. authorities shut down its previous dastardly trading strategy using stolen (and un-released) press releases.

WHAT ELSE IS BREWING

• Snap (-8.41% after hours) CFO Tim Stone is resigning after less than a year at the company.
• Volkswagen and Ford (-1.67%) announced they will join forces to create commercial vans and pickups, and explore the future of electric and driverless tech.
• John Kasich, ex Ohio Gov. and former (possibly future?) presidential hopeful, is joining CNN as an analyst. He's among the GOP's most sought-after voices for 2020 insight.
• Delta (+0.23%) issued another warning on earnings, adding that a traffic slowdown will likely cost the airline $25 million in January alone. The partial government shutdown isn't helping.
• Walmart (+1.37%) is leaving CVS's (-2.45%) network for commercial and Medicaid prescription drug plans. What caused the breakup? They couldn't agree on pricing.
• Airbnb said it was profitable on an Ebitda basis for the second year in a row in 2018. It also expects to hit 500 million "arrivals" by the end of Q1.

BREAKROOM

Real Estate Appraiser
"The mountains are calling and I must go."—John Muir

Today, we're heading out to the snowy slopes of the Rockies, not for a ski trip (we found ourselves on a double black last time...don't ask...), but to see if you can determine the list price on Zillow for this home.

Let's get more details:

• Location: Breckenridge, CO
• 4 beds, 4 baths, 4,032 sqft, built in 2014
• Great views of ski area, but a short walk to Main St.
• Other features: Master suite w/ private balcony; upper level guest suite w/ kitchenette & deck; lower level with family room; office & patio walkout; oversized 3 car garage

(Answer located at bottom of newsletter)

Breakroom Answers