Fly on the wall market report
Let's just say that my day job, or what used to be my day job, involves listening to CEOs and CFOs talk about how much money their company made. I've decided that I should turn some of these into my own market reports, because I already listened in to them. My feeling is strong that stocks are in for a wild ride in the near future. Most 2021 earnings have been pushed into February and even early March as these companies try to get their stories straight.
Disclaimer: I'm not invested in any of these. Trade at your own risk.
I've been doing this for close to 15 years and usually get priority one calls, which are companies that a lot of regular non investor people should have heard of. This morning I was waiting for a publish for a hometown hero, one of a list of smaller companies that hail from Las Vegas or Ohio that I've followed for a long time. This was for Allegiant Air, a Sin City based ULCC (ultra low cost carrier) which had done pretty well pre pandemic flying low demand tier two routes that nobody was competing for. I like the management, the business model and the general sense on their calls.
That edit was delayed. I thought it popped on the screen and I clicked go. I got ticker FB instead (soon to be META) and got to work.
Facebook, I mean META, is not a company I particularly care for lately. I've been pissed at them since they deleted a very large and fast growing group called Covid Vaccine Victims and Families some months ago. At first moderators were very careful with the group: only first person or family member's stories of vaccine adverse events were allowed. There were no memes or forwards or outside writing. That wasn't enough for the censors though, and the group became more and more restricted in search until one day it just disappeared entirely. I found this disappointing and dangerous, as many in the group were coming together, realizing that they were not alone in their injuries, and were in some cases sharing practices that had helped them get back to normal. In my Facebook days that was what the company actually did best for people: I was able to find out about home schooling pods and get information about coming to Thailand during Covid from their huge user base of folks, who formed groups with like interests who could share advice about whatever. That's all going away now, and them shutting down the trucker's protest group in America might be the last straw. It's like they gutted their own soul.
Facebook's earnings results were not good, and the stock market meltdown following it has been epic. The record breaking $200 billion market cap loss for Meta equals the GDP of some smaller countries. Mostly their average daily users and average monthly users stalled out even as advertising revenue increased. I myself can only look at so many doctored selfies of people I went to high school with before I get a little bored. Since political discourse has been limited to increasingly narrow and shrill echo chambers of right think, a lot of more engaging and thoughtful voices on the platform are gone or have ghosted out like I have. The family of apps including Instagram and WhatsApp are doing about the same. Their reels business is not much different than anything on TikTok, despite CEO Mark Zuckerbergs assurances that it is. Occasionally he admitted to things:
"The balance of content that people see in Feed is shifting a little bit more towards stuff that isn't coming from their friends.."
It seems to me that was a big problem for MySpace too back in the day. Where's Tom now Zuck?
Changes with Apple's iOS settings have made it so Facebook is not able to aggregate user data, which favors Google over them. Darn. Who knew it was harder to sell people things when you can't find out what they like? There was some stuff about privacy on messenger, but I don't quite trust them. Meta's (official name change next quarter when they go in witness protection) VR goggles sound a little faddish to me, and the AI Research Super Cluster is a tad dystopian. Reality Labs might be hitting reality right now. I think they're losing the plot.
Meh. Let them burn. Moving on to the call I was meant to take for Allegiant Air, I think they got hit a little hard for not bad results. Allegiant only flies some smaller cities in America, so they're somewhat insulated from the loss of business travelers and very insulated from the devastation in the international travel sector. As most good travel and tourism corporates have been doing, they compared their results to pre-pandemic 2019. 2020 is a year that these companies would like to forget ever happened. Allegiant bookings were up 9% compared to 2019.
Thailand should weep over results like that. This morning I was reading a report in the Bangkok Post about how the renewed Test and Go scheme resulted in 23,000 traveler bookings on the first day, which apparently was great. I can do some quick math on the 40 million visitors that came to Thailand in 2019 and come up with an average daily arrival count of 110,000. Assuming all 23,000 travelers came on the first day and the rate stays steady from here, that's only an 80% drop in traffic. But it's probably 80% better than last February when borders were still closed, so there's that.
Allegiant is having trouble keeping pilots, which is odd to me. As best I can tell there is no vaccine mandate at the company. Allegiant Stadium now home of the NFL Las Vegas Raiders has one, but that is a governor's orders thing. The company is financing all its planes, is taking on debt, and is pushing credit cards a little hard. I'm not sure what to make of the silence over 5G rollout's potential to disrupt flight equipment. Allegiant was hit by Omicron cancellations, but I think they are pulling together. TSA checkpoint traffic is around 75% of pre pandemic levels of flying in America, though off peak has been hit hard by the lack of business travel.
The funniest quote on the call was given towards the end of it by Drew Wells, SVP of Revenue. He was asked why he had thought Covid would come back months ago. Although admitting that this was out of his wheelhouse and that he was not an epidemiologist, he made this shocking statement about Covid:
"It's kind of followed the flu season. It depends on temperature and humidity and where people are likely congregating. And that's why you see it in most of the countries through the winter as people go inside and then you see it somewhat in the high-humid, high-heat areas in the summer as people start to congregate inside air conditioning."
Did that guy just say that Covid prevalence might be affected by weather, so it came back because of winter? Cancel him for misinformation! We all know that only lockdowns and masks and vaccines and quarantines effect Covid rates (too bad some make the rates higher).
On second thought promote that SVP. He just made more sense than the Science...