December 7, 2025, Issue 15

The future of movies

About 20 years ago, Netflix was a startup company that would deliver their subscribers DVDs through the mail. You could keep the movie as long as you wanted then return it with no late fees. Blockbuster Video was the big competition at the time, and never thought of Netflix as a threat. In fact, the founders of Netflix offered to sell their company to Blockbuster for $50 million back in 2000. They were laughed out of the office. Warner Brothers was the king of making the movies that would eventually find their way onto the DVDs that both Netflix and Blockbuster would rent. Well, fast forward to the first week of December 2025. How things have changed! Blockbuster does not exist. And Netflix, now with a market cap of $425 billion has made an offer of $83 billion (including debt) to purchase Warner Bros. While we believe that this drama is just beginning, with other bids likely to come in from Paramount and/or Comcast, what would the Netflix deal mean for the future of the entertainment business?
Here is what Netflix would own:
– WB Film Studio – This would improve the production values of Netflix movies, and they would own names like Harry Potter and Batman among many others.
– HBO – This would give Netflix one of TV’s most prestigious brands along with properties like Game of Thrones and The White Lotus.
– HBO Max – With the 4th most popular service in North America, Netflix would increase their already dominant position in streaming. And this may be the issue….

Netflix has released some movies to theaters for a brief period to have them considered for Oscar nominations. However, their business is streaming, not theatrical release. With ownership of one the largest film studios in the world, they would have the power to end the 120 year old tradition of going out to the movies. Now in fairness, that tradition has already been badly dented by the quality production of movies produced by the streamers like Paramount+, Apple TV, and Amazon Prime Video. Combining that with the improvements in televisions over the last 20 years means that you can watch a great movie from the comfort of your couch on your super clear 100″ HDTV. No need to brave the cold or shell out $15 for a tub of popcorn.

I truly cannot remember the last movie Mrs. Dadsadvice and I went to see in the theater. How about you dear readers? Do you often go to the movie theater? Do you wait for movies to be available to stream at home? Why to both of those questions….

Interesting Stock Moves Last Week

META – On Wednesday META, the parent company of Facebook and Instagram said they would drastically cut spending on the bizarre idea of the Metaverse. That was the crazy online world where you could by a fake house with real money. Back in 2021 Mark Zuckerberg thought so much of the metaverse that he began spending 10’s of billions to build it, and in fact changed the company’s name from Facebook to Meta. Now it seems that maybe the future is more in the real world (thank goodness). The spending control was well received by the market with shares rising 5% by the week’s end.

MSFT – There was a report on Wednesday that Microsoft lowered its sales quotas for salespeople on their AI products. With market watchers already worried about a potential “AI Bubble”, this news was NOT greeted warmly. The stock dropped about 3% even as the company denied the accuracy of the report. With MSFT down, and the more important announcement of a rise in the prices for their dominant suite of Office products, we like Microsoft as a core holding. Good time to jump in.

BA – Boeing gave a positive update to production numbers on Monday. At the same time, they gave an update on the new Air Force One, and FAA clearance for the new 777x, both of which should be done in the first half of 2026. The stock responded with an 8% rise. We believe this is a great long-term turn-around play.

LEG – I would be remiss if I did not mention Leggett and Platt. Last Monday they received an all-stock offer from Somnigroup (SGI) to buy the LEG. SGI owns Tempurpedic, Sealy, Stearns and Foster, as well as the Mattress Firm retail outlets. This is an attempt to become completely vertical, leveraging LEG’s innerspring production and fabric knowledge. The offer is being reviewed by the the board of LEG. We took the opportunity to sell some of our position.

Current Holdings

Stock	Shares	Avg. Cost	Current Price		First Purchase
RDDT	20	$143.70	$234.11		2/13/25
LEG	600	N/A	$11.17	Work related
SNAP	800	$8.15	$7.91		8/5/25
AMZN	10	$135.49	$229.53		2/10/23
NVDA	20	$47.72	$182.41		1/2/24
NKE	20	$73.65	$65.86		9/11/25
SOUN	445	$4.94	$12.76		2/15/24
ARKB	45	$19.46	$29.68		5/1/24
MSFT	5	$410.38	$483.16		10/31/24
DELL	45	$102.37	$138.91		12/19/24
BA	15	$210.44	$201.89		5/20/25
PANW	10	$166.03	$198.84		8/7/25
JOBY	250	$14.23	$15.26		8/19/25
GOOGL	5	$238.74	$321.27	Trump Sale	10/10/25
PTON	200	$7.41	$6.42		10/14/25

Thought of the Day

Back to the big news of the week. A date night out at the movies will likely cost over $50 for two including tickets and snacks. If you see one per month in a theater that could be over $600 per year. That would pay for 3-4 streaming services. Is it any wonder people are continuing to invest in their home theaters? Picture quality is great, snacks are way cheaper, and no one minds if you talk or fall asleep….