Apple is a Service Company

By Hoda Mehr Fri, Apr 23, 2021

Hey Scoopers,

After a report about President Biden’s higher tax rate for the wealthy came out, the markets erased earlier gains. — More on that in the “Overall Market” section.

Beyond the overall market, a telecom giant started to see positive returns on its streaming services. Meanwhile, a cryptocurrency mining company started to feel Bitcoin’s plunge. — More on that in the “What’s Up?” and “What’s Down?” sections.

By the way, would you pay to listen to your favorite podcasts? — More on that in the “Water Cooler” section.

But, first, here is a recap of what happened in the market yesterday:

Market Recap

• U.S. markets: The stock market ended in the red zone on Tuesday. Scroll down to the “Overall Market” section to read more.
• Cryptocurrency: Bitcoin‘s price retreated to $50K per coin.

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Markets Didn’t Like It

The stock market ended in the red zone on Thursday.

After what seemed to be the bull run yesterday, the stock market sank due to the reports that President Biden plans a proposal to increase the capital gains tax rate on wealthy individuals. Biden’s proposal would increase the 20% tax rate to 39.5% for individuals earning more than $1 million per year. Following the announcement, all three indices fell off the cliff.

Ahead of Competitors

So, what happened?

Shares of AT&T (Ticker: T) were up by more than 4% on Thursday. After AT&T released its 2021 first-quarter result, the company surprised Wall Street’s analysts. Although the markets expected a $42.7 billion Q1 revenue, the telecom delivered a better-than-expected $43.9 billion revenue. Furthermore, AT&T gained 2.7 million subscribers for its HBO streaming services. Although the subscriber gain is behind competitors, the number was stronger-than-expected and showed that the service could compete for a larger market share.

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Plunging

So what happened?

Shares of Riot Blockchain (Ticker: RIOT) were down by more than 11% on Thursday. The plunge came after investors’ sentiment turned bearish toward Bitcoin’s price. As Riot is a Bitcoin mining company, its price depends on whether the cryptocurrency’s value is going up. It seems that the markets believe that the crypto hype could fade out in the coming weeks.

Apple is a Service Company

So what happened?

Apple (Ticker: AAPL) announced a Podcast subscription service.

After many rumors from the tech world revolving around Apple creating another service, the company announced a podcast subscription service. Starting in May, Apple users from 170 different countries will have the option to sign for the premium service.

Apple also presented an entire redesign of its Podcast app. Although it may seem like just another revenue stream for Apple, the markets already anticipated that it would happen someday. As of 2020, Apple’s services revenue became the second-largest income stream for the company. As for comparison, even the sum of Mac and iPad’s revenues is behind the company’s service revenue stream, which returned more than $53 billion during last year. The market’s sentiment is that companies will eventually develop services as a way to incur profitable revenues.

If you have any questions, or suggestions let us know by emailing us at members@tradestocks.com. We look forward to hearing from you.

About the Author

The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card