LionTree

DIRECTV has entered into a definitive agreement to acquire EchoStar Corporation’s video distribution business, including DISH Network and Sling TV, through a debt exchange transaction. This strategic move will create one of the largest pay-TV distributors in the U.S., offering consumers more video options and enhancing competition in a market dominated by streaming services from large tech companies and programmers. In connection with the deal, TPG will acquire the 70% stake in DIRECTV that it does not already own from AT&T.   LionTree is proud to have served as financial advisor to DIRECTV and TPG in this transformative transaction that demonstrates the ongoing, dynamic evolution taking place across the media business, where decisive moves can unlock significant opportunities to capture value and drive growth. https://lnkd.in/eFv3kAGJ

The DIRECTV / EchoStar Corporation deal annc’d earlier this week is yet another example that points to more potential competition in the connectivity space which dovetails well with our comments in the latest edition of our LionTree’s Lens: Sector Insights & A Look Ahead, Fall 2024 deck, which we published a couple of weeks ago (see clip below). If interested, we’re doing a deep-dive into the deal (in addition to our usual insights and analysis on the most important updates & developments in the TMT/Consumer sector) in this week’s edition of our LT Weekly Top TMT Themes report. Corporate executives and financial investors can request access to be added to the distribution here: LionTree.com/ltweekly #ltweekly #Connectivity #TMT

Great clip from our 2022 interview with Malcolm Gladwell! Check out the full conversation at the link below, or wherever you enjoy your podcasts: https://lnkd.in/ex6iV_Mp

Last week, LionTree CEO Aryeh Bourkoff was honored with the Simon Wiesenthal Center’s 2024 Humanitarian Award. This recognition reflects the values that define us at LionTree: a commitment to fostering understanding, embracing diversity, and striving for a more just and unbiased world.   We are honored to support the Simon Wiesenthal Center in their tireless work to confront hate, protect Jewish communities, and educate future generations.

New Podcast Alert 🔊 In our latest episode of Listen on Purpose, we’re excited to feature Peter Frelinghuysen and Misha Vitels, co-founders of Earth Brands. Join us as they share how they’re making sustainability not just essential, but cool and universal. In this episode, we explore: 🌎 The inspiration behind Earth Brands 🥤 Reinventing the classic red Solo up with net-zero, plant-based products ♻️ Navigating the challenges of sustainable innovation 💡 Insights on driving a movement towards a more responsible future Watch now: https://lnkd.in/gihBhu6B

Earnings season left as quickly as it came, and what remained abundantly clear within our LionTree TMT/Consumer Universe of ~150 stocks with $1bn+ mkt cap is that companies pushed the pedal a lot harder on profitability than Wall Street was expecting. This was deja vue from Q1 results as well. More specifically, the vast majority of companies that report adj. EBITDA beat consensus expectations, and a huge 45% of those beat by over 10%+. In contrast, only 3% of all companies beat sales estimates by over 10%+. These are just a few of the several key takeaways from our analysis of Q2 earnings season which we dove into this past Friday in our LT Weekly Top TMT Themes Report – see below for the full list of themes and you can request access to future reports here: LionTree.com/ltweekly - Earnings Wrap: Companies Are Still Pushing Hard On The Bottom Line - The NFL Isn’t The Only Big Sports Game In Town… The Paris Olympics Hits Record Viewership - Investor Positioning…AT&T, Meta, & Liberty Global Are Hedge Fund “Hot Stocks” - China Tech Contends With Weakening Domestic Spending Trends - Grab-Bag: DraftKings Reverses Course On Surcharges/Another Suitor Reportedly Emerges For Paramount/Venu’s Launch Was Blocked By A Judge #TMTEarnings #LTWeekly

Last week, we celebrated twelve years of growth, innovation, and partnership. While much has changed since 2012, our commitment to our relationships has only deepened, and together, we’ve achieved some incredible milestones. But we’re just getting started. Cheers to twelve years of LionTree! Hear us roar! 🦁🌳♾️

In the face of growing viewership largely driven by big talent and big personalities, an important question has emerged: Should college athletes be paid? LionTree’s Alex Michael sat down with MOGL Co-Founder and CEO Ayden Syal to see just how these athletes are navigating growing #NIL opportunities. Ayden shares his insights on MOGL’s mission, the monetization of student athletes' name, image, and likeness (NIL), college sports’ evolving audience, the collective efforts of athletes, schools, and companies in adapting to new NIL regulations, and using MOGL’s tech to open new doors for student athletes. 📺 Watch now on YouTube: https://lnkd.in/emkrET-3

It has been an extremely volatile earnings season in the sector with 15% companies in our LionTree TMT Universe trading up double digits in reaction to their reports and 14% companies trading down double digits. I’d highlight the following top 5 fundamental themes so far… 1) Investors expressing increasing impatience regarding the huge levels of AI spend, but I think two key quotes say it all regarding where we will go from here in the foreseeable future: ◾ “The risk of underinvesting is dramatically greater than the risk of overinvesting” - Alphabet Inc. CEO Sundar Pichai ◾ “I’d rather risk building capacity before it is needed rather than too late” - Meta CEO Mark Zuckerberg 2) Questions raised regarding the total addressable market for paid music subscribers ◾ Spotify’s better than consensus Q3 margins and premium subscriber adds…and the stock traded up double digits ◾ Versus Universal Music Group’s surprise Q3 miss on subscription revenues…and the stock traded down more than 20% 3) Bifurcations regarding consumer appetite to spend on experiences ◾ Live Nation Entertainment’s concert “boom” is expected to continue, with YTD ticket sales up y/y and cancellation rates for N. America concerts tracking lower than 2023 levels  ◾ Versus Comcast’s NBCUniversal theme parks Q3 revenue missed consensus by -11% and adj EBITDA missed by -19%...low attendance at domestic parks was the main driver 4) Divergence in digital advertising spend is back…Search & Direct Response are doing well, while Brand is seeing a pull-back especially in Consumer/CPG ◾ Alphabet Inc.: Seeing “tremendous ongoing momentum in Search” ◾ Meta: “We have seen healthy global advertising demand on our platform…and we expect that generally to continue into Q3” ◾ Snap Inc.: “Brand-oriented advertising revenue declined 1% y-over-y, driven by particularly weak demand from certain consumer discretionary verticals including retail, technology, and entertainment, as well as the timing impact of holidays shifting out of Q2 in the current year”  ◾ Pinterest: “Growth was partially offset by softness within CPG, specifically food and beverage advertisers, who are navigating broader headwinds within that category” 5) More signs that the consumer is trading down ◾ Amazon: “We’re seeing a lot of the same consumer trends that we have been talking about for the last year, consumers being careful with their spend, trading down, looking for lower ASP products, looking for deals that continued into Q2, and we expect it to continue into Q3” We delved into each of those in our Top TMT Themes Reports on Friday night. If you are a corporate executive or financial investor, you can request access to our weekly report here: liontree.com/ltweekly/ #LTWeekly #Magnificent7 #TMTEarnings

Investors can be fickle and while last quarter, Big Tech mostly got a pass regarding escalating spend going into AI infrastructure (see my quick video commentary on that below), this quarter has started out on slightly shakier ground (i.e., Alphabet Inc. was down -5% on the back of its results which, among other things, saw even higher capx levels on top of last qtr’s increase) and leading Big Tech stocks have felt some heat (i.e., NVIDIA shares have fallen about -20% from its peak).  All eyes will be on Microsoft, Meta, Amazon, and Apple’s results + forward commentary on AI investment and returns this week. We will be delving into this theme plus results across other digital media players (Pinterest/Snap Inc.), Entertainment (Live Nation Entertainment/Roku), Videogames (Electronic Arts (EA)/Roblox), Online Travel (Booking.com), amongst others. It will be a busy week in the markets! For reference, our focus in last week’s Top TMT Themes Update included: 1. Earnings Scorecard - Week 1 & 2 2. Alphabet Says It’s Better To Over-Invest In AI, Than Under-Invest… 3. Connectivity - Part 1: Verizon & AT&T Somewhat Diverge In Q2 4. Connectivity - Part II: Cable Companies Are Weathering The ACP Storm Better Than Expected 5. Investors Cheer Spotify’s Year Of Monetization + Better Paid Subscription Growth 6. UMG’S Results Were Impacted By Varied DSP Performance, But Its “Entire Mentality Is To Grow The Pie” 7. A First Look At Media Entertainment Trends Raised Concern On Theme Parks 8. Grab Bag: Reddit Strikes Sports Partnerships / Apple Cuts Content Spend / Prop 22 Is Upheld If you are a corporate executive or financial investor and would like to request access to our LT Weekly Top TMT Themes reports, click here: liontree.com/ltweekly #LTWeekly #Media #TechCapex