On a new Netflix show, top bakers make celebrity judges decide, Is It Cake?

But maybe a more relevant question for Netflix is, is it toast?

The streaming company’s stock collapsed 35% yesterday, wiping out $54 billion in market value and marking its worst trading day since 2004. The proximate cause is Netflix’s shocking earnings report Tuesday afternoon, in which it revealed it lost subscribers in Q1 when investors expected a gain.

But one does not simply lose more than one-third of your market value without inviting existential doubts about your business model. Here’s a quick look at the major challenges facing Netflix:

1. Covid behaviors have not been sticky. Turns out, people don’t actually want to watch crappy shows like Tiger King when there are other things to do. Netflix’s stock surged to an all-time high last year as it was gobbling up subscribers during the pandemic. But, like we’ve seen with the plunging shares of other pandemic winners like Zoom and Peloton, that hypergrowth turned out to be a blip.

2. The competition is fierce. Netflix once dominated the streaming industry—and it’s still the largest service by far, with 222 million global subscribers. But virtually every entertainment company caught on to what Netflix pioneered and has launched a streaming service. And with inflation at a 41-year high, consumers are only choosing a select few to pay for: 35% of Americans said they cut out a monthly subscription in the past six months.

3. Its content doesn’t stand out. Given all that competition (not to mention a content budget of $17 billion annually), Netflix needs to continuously release hit TV shows like Bridgerton and Squid Game to attract and retain its customer base. But overall, its content “is simply not resonating relative to the level of spend,” according to research firm LightShed Partners, especially its English-language programming.

Bottom line: Netflix has a few tools in its toolbox to kickstart growth, such as selling ads and cracking down on widespread password sharing. But there’s a reason that Netflix’s report sent shares of companies across the media industry, including Roku and Paramount Global, lower yesterday. The streaming market, it seems, may have hit a peak.—NF

Russian and Belaurisan players are blocked from Wimbledon. The iconic British tennis tournament held during the summer has banned players from both countries, which includes men’s world No. 2 Daniil Medvedev of Russia and women’s No. 4 Aryna Sabalenka of Belarus. Wimbledon is the first tennis event to prohibit individuals from playing as a result of the war in Ukraine.

Your genius bar is organizing. Apple Store workers at an Atlanta location became the first at the company to file for unionization. Roughly 70% of the 100 eligible employees at the store, including salespeople and technicians, signed union authorization cards to join the Communications Workers of America. Other Apple workers at a store in NYC said this weekend that they were collecting signatures to form a union, in the hopes of locking down a $30 minimum wage and better benefits.

Revolve responds to festival fail. The clothing retailer held an invite-only festival a hop and a skip from Coachella last weekend that catered to influencers. But according to posts about the event, poor planning on Revolve’s part led to attendees being stranded in the desert heat while waiting for shuttles. Some said they saw people pass out and compared the whole affair to Fyre Festival. Revolve apologized for the incident.

Elon Musk had Twitter users fill in the blank when he tweeted “____ is the Night” on Tuesday. Since decoding Musk’s social posts counts as journalism now, many are speculating that his tweet is a reference to F. Scott Fitzgerald’s novel Tender Is the Night and, simultaneously, his intention to make a “tender offer” for Twitter.

Further evidence: Last week, following his $43 billion bid to acquire the social media company, he tweeted “ Love Me Tender ” (an Elvis Presley song). Okay but…

What is a tender offer?

It’s an offer to buy all of a company’s shares at a set price from every individual shareholder. In other words, shareholders are given the option to cash out so that one individual or company can take over.

In Musk’s case, though, a “poison pill” plan implemented by Twitter’s board last week effectively prevents him from purchasing more than a 15% stake, and he already has over 9%. So even if he makes a tender offer, he won’t be able to buy the shares he offers to snatch up.

Unless…Twitter’s board decides to crush its poison pill, which they might consider doing if the majority of shareholders chooses to accept Musk’s tender offer. If they were to keep the poison pill in place in that scenario, they’d risk reinforcing a narrative Musk has been pushing that Twitter’s board isn’t acting in shareholders’ best interests.

Learn more: Bloomberg’s Matt Levine broke it down here.—JW

The National Academies of Sciences, Engineering and Medicine released its once-a-decade survey on Tuesday to reveal its funding recommendations for future outer space study. They didn’t accept our “find out what Jupiter tastes like” request, but the report does offer a peek into what we can expect from NASA and other space industry players in the next decade.

Booking a trip to Uranus. Much to every middle schooler’s delight, the report declared a ~$4 billion SpaceX-launched journey to the icy giant as a “flagship” or priority mission for NASA. If NASA agrees, we could be looking at a 2031 launch date.

Confronting space’s underrepresentation. For the first time, the survey discussed systemic bias and meager representation of marginalized groups in the industry. It also endorsed the dual anonymous peer review system, which forces committees to evaluate scientific proposals without knowing the identity of the authors.

Blowing up asteroids. The survey recommended that NASA try a dress rehearsal for defending us from space rocks by beefing up planetary defense. One asteroid, Apophis, that will zoom close to Earth in 2029 might be the leading lady.—MM

Stat: Buying a home just keeps getting more painful. The median existing-home price in the US hit an all-time high of $375,300 in March, up 15% from the year before. With surging mortgage rates and higher home prices, the average borrower is paying ~38% more than they would have for the same home a year ago, per Realtor.com.

Quote: “I don’t see a SINGLE beneficiary of this insane war! Innocent people and soldiers are dying.”

That’s something you don’t hear a Russian oligarch say every day. Entrepreneur Oleg Tinkov blasted his country’s invasion of Ukraine in an Instagram post, becoming one of the few members of the Russian elite to directly criticize Putin’s invasion. Meanwhile, a “small but growing number” of senior insiders at the Kremlin is questioning Putin’s decision to go to war, Bloomberg reports.

Read: Marriage moves to the metaverse. (Morning Brew)

Ask: Masks are now optional on domestic flights in the US. Will you still wear one?

Yes

No

The power of TikTok: After someone made a seemingly unremarkable sound on one TikTok video, other users went on a remixing spree. Here’s what they made.

Someone please check on Finland: They’re apparently obsessed with buckets.

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Brew Mini: Thursday Minis are more complex than Tuesday Minis, so if you’re up for a challenge (and we know you are), solve it here.

Three headlines and a lie

Three of these news headlines are real and one is faker than the structural integrity of a Shein corset. Can you guess the odd one out?

1. The IRS says it will introduce a virtual chatbot, Taxy the Toucan, in 2023 to help filers
2. Japanese researchers develop electric chopsticks to enhance salty taste
3. A link to a foot fetish film was accidentally tweeted by the Canadian Health Ministry
4. Illinois man “inhales” drill bit during dental visit