TMTB Mid-Day Wrap

QQQs -50bps as semis lead the way down today and software + Internet rallying — the L semi / S sw trade very crowded at this point. BTC trying to follow through to downside after false breakout yesterday.

Early recap today as leaving the screens early. Have a great weekend!

Likes and shares appreciated!

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INTERNET

• RBLX -8% as the Schlep controversy grew (oppenheimer wrote about it - we covered it this morning), Louisiana filed suit, and rumors floating Indonesia (~1-3% of total bookings growth) could ban the game given “has a lot of violence for young children.” So far, hasn’t impacted the data at all. Couple takes I liked:

A reader who nailed the pullback put it welll: I was expecting a big drawdown because it's so crowded, their non-gaap adjustments are too generous (which makes long onlies not love the name), mgmt is shady, and the way it rallied looked like a hedge fund hotel to me

My mistake was ignoring the noise as it built - an easy solution would have been to buy OTM puts to protect the long. For now, my view is we always hear noise like this on large digital platforms, including violent games like GTA - it was RBLX’s time to get the spotlight. We’re watching closely - think at some pt will be a good time to add as we think this is just another controversy that gets amplified on social to be forgotten with next news cycle, but we remain open-minded.

Wolfe took down #s and Hedgeye added it as an active long today, saying their survey showed users don’t perceive the platform as less safe than other gaming platforms online.

• SPOT +6% as co. raised prices in a few more countries in Europe. Here’s German press:

Customers are currently being informed that their premium subscriptions will become pricier. The adjustments include all tariffs: the “Premium Individual” subscription will cost two euros more instead of 10.99 euros, meaning that customers will have to pay 12.99 euros a month in the future.

The “Duo” tariff for two people will cost 17.99 euros instead of the previous 14.99 euros. The “Family” subscription, which can be used by up to six people, will rise from 17.99 euros to 21.99 euros. Spotify is also adjusting its discounted student tariff, which will now cost 6.99 euros per month instead of 5.99 euros.