The daily business briefing: July 20, 2023

Netflix shares fall despite 8% subscriber gains, Tesla's price cuts erode its margins, and more

The Netflix logo is shown on a phone screen
Streaming giant Netflix's revenue fell short of expectations and its shares plunged
(Image credit: Chesnot / Getty Images)

1. Netflix shares fall despite subscriber gains

Netflix reported Wednesday that it gained 5.9 million subscribers in the second quarter, an 8% increase that came after the streaming giant launched a global crackdown against password-sharing. But the streaming giant's revenue fell short of expectations and its shares plunged by 6.7%. Netflix saw subscriber growth in every region thanks to people who decided to pay for accounts now that they can't piggy-back on someone else's. A year ago, Netflix lost subscribers in two straight quarters for the first time. Netflix said its free cash flow forecast had risen from $3.5 billion to $5 billion because it will be spending less on new content this year due to Hollywood's ongoing writer and actor strikes.

The Wall Street Journal CNBC

2. Tesla reports strong revenue but price cuts hurt gross margin

Tesla shares fell 3% on Wednesday after CEO Elon Musk said the electric-car maker would reduce prices again due to "turbulent times." Tesla reported better-than-expected quarterly revenue but said its gross margin was squeezed by previous price cuts it used to boost sales. Tesla's gross margin was 18.2% for the quarter, down from 19.3% in the first quarter and Tesla's lowest in three years. Tesla, the dominant EV maker, has cut prices on some models several times to attract buyers as it faced increasing competition and a struggling economy. The reduced pricing and government tax breaks helped Tesla deliver a record 466,000 vehicles in the second quarter.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.


Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up


3. Thousands of charities apply for MacKenzie Scott grants

Billionaire philanthropist MacKenzie Scott received 6,353 applications from nonprofits in response to her first open call for grant requests. Lever for Change, the nonprofit managing the application process, said Wednesday applications had poured in from all 50 states, as well as Puerto Rico and the Virgin Islands. The group will pick 250 winners to receive $1 million grants, and announce them early next year. Scott has pledged to give away most of her fortune since divorcing Amazon founder Jeff Bezos. She has shaken up the philanthropy world by donating $14 billion to 1,600 nonprofits, and still has more than $36 billion, according to Forbes.

The Associated Press

4. Stock futures mixed as investors digest corporate earnings

U.S. stock futures were mixed early Thursday as investors continued to react to corporate earnings. Futures tied to the Dow Jones Industrial Average were up 0.2% at 6:45 a.m. ET. S&P and Nasdaq futures were down 0.1% and 0.6%, respectively. Netflix shares fell sharply after a mixed quarterly report. Tesla shares also dipped after the electric-car maker signaled more price cuts even though previous ones hurt its margins. Johnson & Johnson shares rose 1% in pre-market trading Thursday after it posted revenue and earnings per share that beat Wall Street's expectations.


5. Goldman Sachs' quarterly earnings plunge

Goldman Sachs' second-quarter earnings dropped 58% in one of the investment bank's "weakest quarters under Chief Executive Officer David Solomon," according to Bloomberg. Goldman's return on equity fell to 4%, lagging behind other top U.S. banks. Goldman and analysts had reduced their profit estimates for the quarter as it faced weakness in everything from investment banking to its struggling consumer arm, but the company's quarterly report fell short of even the lower estimates. But Wall Street's expectations were so low that Goldman's stock still rose 1% after it released the results.

Bloomberg The New York Times

Continue reading for free

We hope you're enjoying The Week's refreshingly open-minded journalism.

Subscribed to The Week? Register your account with the same email as your subscription.

Harold Maass

Harold Maass is a contributing editor at He has been writing for The Week since the 2001 launch of the U.S. print edition. Harold has worked for a variety of news outlets, including The Miami Herald, Fox News, and ABC News. For several years, he wrote a daily round-up of financial news for The Week and Yahoo Finance. He lives in North Carolina with his wife and two sons.