- A greenfield opportunity for CRISPR is opening up…
- I’m delighted this deal fell apart…
- This would be an incredible victory for the blockchain industry…
Dear Reader,
The evidence continues to pile up that consumers have had it with the pandemic. They’re tired of being cooped up at home, and they’re ready and wanting to get outside and back at it.
This time, it was Netflix’s first-quarter earnings report last night that gave us a strong insight.
Wall Street analysts had been forecasting 6.4 million new subscribers, but the actual net new subscribers came in at just under 4 million… That’s a pretty big “miss.” The stock was down more than 8% overnight.
What happened?
Clearly, as of last quarter, consumers are spending less time at home in front of the TV and more time getting back to life. And with the warmer weather already here, we should expect that trend to continue this quarter as well.
We shouldn’t feel bad for Netflix, though. In the middle of the pandemic, when Netflix had the most leverage with its subscribers, it raised the monthly subscription rates of its standard and premium plans to $13.99 and $17.99, respectively.
I remember the “old days” of Netflix when a subscription was less than $10… And because of the price hike, Netflix still beat expectations on revenue.
The predatory pricing move reminds me of my local cable TV company, from which I receive my internet service. Pre-pandemic, my monthly service was $45 for 400 Mbps. After two pandemic price hikes, I’m now paying $99 a month just for internet, and it’s a good day when I’m receiving just 250 Mbps.
I know that many other subscribers have experienced the same exact thing. The price more than doubles, but the quality of service declines.
Talk about taking advantage of a crisis at the expense of your customers. This is not a good business model. Sadly, that’s a common experience for a lot of consumers in the U.S.
It may work in the short term, but the moment consumers have an alternative, the tide changes quickly.
Ultimately, we have a lot to look forward to over the next several months as “we the people” take back our lives from those who have misled us so egregiously for the last year.
Now let’s turn to today’s insights…
This next-generation CRISPR company is on the rise…
Scribe Therapeutics – a company spun out of UC Berkeley – just raised $100 million in a Series B venture capital (VC) round. This is a follow-on to Scribe’s $20 million Series A round back in October of last year.
I have been tracking Scribe since the company got started back in 2019. That’s because Jennifer Doudna is one of its founders. If we remember, Doudna won the Nobel Prize last year for her early work on CRISPR genetic editing technology. Anything she is working on is worth keeping an eye on.
And Scribe’s approach is interesting. The company is using computational biology to create new enzymes for use in CRISPR therapies. Enzymes are the delivery mechanism for getting the therapy to the cells that need to be edited.
So Scribe’s focus is to optimize CRISPR enzymes. This will open the door to all kinds of new therapies. Each enzyme will be tailored for different disease targets.
And Scribe’s first engineered enzyme is called CasX. CasX is smaller than the Cas9 enzyme that many of the first-generation CRISPR therapies use.
Scribe believes that the CasX enzyme will be perfectly suited to tackle neurodegenerative diseases that have been extremely difficult to treat with traditional therapies. I’m very excited to see the company’s full development pipeline when it is released.
And what’s remarkable here is that there is absolutely no competition in the space. The development of new CRISPR enzymes represents a greenfield opportunity. It’s a new technology that will create cures for diseases that have been untreatable up to this point.
We will definitely want to keep a close eye on Scribe going forward. I suspect that this company will move quickly given its approach. This company is doing some great work. Let’s make sure we have it on our early stage watchlist.
And if you’d like to learn some of my current recommendations in the booming precision medicine space, go right here for the details…
Turning the page on Plaid’s journey…
We have been following Plaid in The Bleeding Edge since Visa made a bid to acquire the company for $5.3 billion in January of last year. I was devastated to see this at the time because I knew it was anti-competitive and would quash the great innovation Plaid was known for.
To bring newer readers up to speed, Plaid is one of my favorite private technology companies. It is an application programming interface (API) company. APIs are basically “bridges” that allow two different software systems to communicate.
And Plaid’s APIs plug into traditional banking systems. They are the “glue” between our bank accounts and any kind of software application that needs to support payments.
Consumers who have used mobile banking or mobile commerce applications have almost certainly used Plaid’s technology and not even realized it.
As it turns out, the Department of Justice (DoJ) launched an antitrust investigation into the Visa-Plaid acquisition in November of last year. That investigation was never resolved, but the deal was called off in January – much to my delight.
The mainstream financial media said this happened because of the DoJ’s investigation, but we knew better. As we discussed in January, the real reason the deal fell apart is that Plaid has become far more valuable than Visa’s $5.3 billion offer. The executives at Plaid recognized this and called it off.
And Plaid just proved that we were right. The company raised a whopping $425 million in a Series D funding round earlier this month, valuing the company at $13.4 billion. That’s 153% more than Visa’s offer. Money talks.
This is great news. This infusion of capital will keep Plaid independent, and it will power more innovation in the financial technology (fintech) space. (For more information on my top fintech play right now, interested readers can go here.)
To me, Plaid is one of the most important fintech companies in business today. It’s right up there with Coinbase, Square, and Stripe. I can’t wait to see what the company does with all this money it just raised.
Ripple just struck a counterblow against the SEC…
The epic case between the Securities Exchange Commission (SEC) and Ripple is getting interesting.
As a reminder, Ripple is one of the blockchain industry’s biggest success stories. It has spearheaded what is arguably the largest commercial adoption of blockchain technology and digital currency on the planet.
That’s because Ripple’s technology is a perfect example of how much value blockchain technology can bring to real-world transactions. XRP transactions can settle in three to five seconds. That’s almost instantaneous. And each transaction costs a fraction of a penny.
But the SEC has claimed that Ripple illegally sold securities with the issuance of its XRP cryptocurrency. And Ripple adamantly claims that XRP is a currency, not a security. As a proof point, more than 300 financial institutions use Ripple’s technology to move funds within the financial system in a fast, frictionless way.
This is absolutely a landmark case for the blockchain industry. The outcome will set the precedent for future regulatory issues.
With a market cap of $61 billion, Ripple is currently the fourth-largest cryptocurrency in the world. And with so many financial institutions using its technology, Ripple has become an important player in the global financial system.
And now Ripple has just struck a major blow in the ongoing litigation. The judge just granted Ripple a discovery motion that will grant it access to the email and communications of 19 past and present SEC employees. This is brilliant.
Remember, Ripple has been around for over eight years now. Yet the SEC is just now claiming that XRP is a security.
However, Ripple believes that SEC employees talked about it internally in a way that compared it directly to Bitcoin and Ethereum – whose coins are considered currencies rather than securities.
If Ripple can demonstrate to the court that the SEC communicated in internal documents that Ripple is in the same category as Bitcoin and Ethereum, that will likely shut down the entire case.
We should keep in mind that Ripple is well connected with the world’s central banks, largest financial institutions, and regulators. Not surprisingly, it has a fantastic legal team managing the case as well.
I suspect that the Ripple team already has good reason to believe that it has been compared directly to Bitcoin and Ethereum in the past. Otherwise, it wouldn’t have made the motion to access those internal SEC documents in the first place. This seems to me like a calculated move where Ripple’s legal team already knows what it will find.
I can’t wait to see what comes of this. If this discovery motion enables Ripple to win the case, it would be an incredible victory for the entire blockchain industry.
And I’ll point out that this news has been great for XRP’s price.
When we first discussed this case back in January, I went on record saying that XRP’s pullback was a great opportunity for contrarian investors. I suggested that Ripple (XRP) would rebound quickly. That was on January 13.
Well, XRP is up 350% since then. Anyone who took me up on my call more than quadrupled their money in just three months. Not too shabby.
I’ll add that I’m long-term bullish on XRP even from these levels. The cryptocurrency’s impressive global network warrants a market cap far larger than the $61 billion that Ripple commands today.
And, of course, we’ll continue to track the ongoing case closely in these pages going forward.
Regards,
Jeff Brown
Editor, The Bleeding Edge
Like what you’re reading? Send your thoughts to [email protected].