This just in: The STW Daily News Round Up featuring all the news that’s fit to (digitally) print for Wednesday, July 20, 2022. Big day for Netflix (NFLX) as the stock rebounds with strong earnings in Q2 and the reported acquisition of Animal Logic.

NFLX bounces back after better-than-expected Q2 results

After reporting in Q1 that the streaming giant would lose 200,000 subscribers and another 2 million in Q2, NFLX stock tanked, eventually bottoming out in the low $160’s in May.

With Disney+, Paramount+, Amazon Prime, HBO Max, and Hulu making such significant gains of late, many investors began writing Netflix off.

“All of the NFLX bulls have disappeared,” Bloomberg wrote in June.

However, a late report from Netflix on Tuesday sent shares soaring in the aftermarket (the stock ultimately reached over $217).

Why?

According to Netflix, the streamer lost less than half of the projected 2 million subscribers it anticipated and actually forecasted growth in the third quarter of 1 million new members, as well as approximately $8 billion in revenue and over 220 million subscribers globally.

The company also said it expected it would unveil its ad-supported tier in 2023, which would re-position the company for growth in new market segments.

Still, the entertainment juggernaut has a steep hill to climb. Despite the jump late Tuesday, the stock hovered at around just $200 a share at close, down $500 from its $700 2021 highs.

Netflix to acquire animation studio behind The Lego Movie

When we were given the opportunity to watch The Sea Beast a few weeks ago (it’s amazing if you haven’t), we asked some of our colleagues “What is Netflix up to here?”

Well, if a new report is true, it appears they are doing exactly what we suspected and taking an offensive position with their animated content.

Yesterday afternoon The Verge reported that Netflix was acquiring Animal Logic, the animation studio behind The Lego Movie, which would give it access to all of AL’s Lego Movie films, including The Lego Batman Movie and The Lego Ninjago Movie.

After receiving nominations for Klaus and Over the Moon, Netflix has become much more aggressive in the development of new animated content.

In 2022 alone we’re set to see Richard Linklater’s Apollo 10 1/2: A Space Odyssey, Jordan Peele and Keegan-Michael Key’s Wendell & Wild, and Guillermo del Toro’s take on Pinocchio.

But it was the addition of The Sea Beast’s Chris Williams (Bolt, Big Hero 6, Moana) that turned heads in the industry. After 30 years in animation, Williams, who’s worked with Disney for much of his career, now has a solid relationship with Netflix – is there more to come?

With Williams’ expertise delivering a near perfect animated film for Netflix and Animal Logic now a part of the company’s sphere of influence, could Netflix be looking for an answer to streamers like Disney+?

Many analysts have suggested Disney+ will replace Netflix in revenue by 2025, but perhaps the company is better prepared for the streaming wars than the bears on Wall Street gave them credit for last quarter, after all.

Only time will tell.

By Lee M