HBO Max and HBO picked up 3 million subscribers in the same quarter that Netflix lost 200,000 of them for the first time in years, Variety reported. The streaming/cable service reported earnings under former parent AT&T for the last time, as it's set to become part of the new Warner Bros. Discovery media conglomerate.

The lion's share of new HBO/HBO Max subs were in the US (1.8 mllion), and the services now count 48.6 million subscribers domestically and 76.8 million worldwide. That's up 12.8 million over last year, showing solid growth. (HBO Max costs $15 per month ad-free or $10 with ads, and HBO on cable is $15 per month.)

However, it was still a drag on parent AT&T (for the last time). WarnerMedia revenue was down 32.7 percent over last year to $1.3 billion due to investments in HBO Max and the failed launch of CNN+.

That's essentially why AT&T decided to divest WarnerMedia and focus strictly on its core telecom business. To wit, the company announced its largest gain in post-paid phone net additions in more than a decade. Excluding WarnerMedia and other divested businesses, AT&T revenue was $29.7 billion, up 2.5 percent over the same quarter last year.

With WarnerMedia and Discovery divested, AT&T plans to invest any free cash in 5G and fiber deployments (it still has $169 billion in debt, despite the $43 billion dollar deal to sell WarnerMedia.) "AT&T has entered a new era," said CEO John Stankey in a prepared statement during the company's earnings call.

Although Amazon's main European business saw an increase in sales to around $55 billion last year, the company avoided paying income tax. It posted a loss of €1.16 billion euros ($1.26 billion) and it even received €1 billion in tax credits. According to filings obtained by Bloomberg, the credit was “mainly due to the use of net losses carried forward in accordance with the tax consolidation system.”

The Amazon EU Sarl unit is based in Luxembourg and reports revenue from its divisions in the UK, Germany, France, Italy, Spain, Poland, Sweden and the Netherlands. Its sales increased by 17 percent in 2021.

“Across Europe, we pay corporate tax amounting to hundreds of millions of euros,” an Amazon spokesperson told Bloomberg. They said revenue, profit and tax are reported to local authorities in each country. The company said it posted a loss after opening more than 50 new sites across the continent last year.

Amazon has been the subject of criticism for years for tax breaks it receives and how it reports income. In 2017, the European Union slapped Amazon with a €250 million ($280 million) tax bill over alleged illegal state aid practices dating back to the early 2000s. Amazon successfully appealed the bill last year. The European Commission has filed an appeal against that decision in the European Court of Justice.

Elon Musk now has access to the funds he'd need to buy Twitter. According to an SEC filing, Musk has received "commitment letters" that would supply about $46.5 billion to buy all of Twitter's outstanding common stock and take control. The Tesla CEO is "exploring" this tender offer following a lack of response from Twitter, the filing reads.

We've asked Twitter for comment. While the company hasn't directly addressed Musk's offer, initially pegged at $43 billion, it recently approved a temporary "poison pill" measure intended to discourage hostile takeovers. The plan would let some shareholders buy more stock if anyone buys more than 15 percent of outstanding stock without the board of directors' approval, diluting the value of Musk's stake. He's already the largest individual shareholder with 9.2 percent ownership.

Musk made the offer claiming that it was meant to protect free speech, and has suggested he could unlock Twitter's potential with features like an edit button (which Twitter was already working on) and an open source algorithm. However, it also comes as the executive fights the SEC over alleged finance rule violations that frequently relate to his tweets. The entrepreneur has multiple strong incentives to purchase Twitter, and the financial backing illustrates just how serious he is.

Netflix might offer cheaper ad-supported plans in the coming years. In the company's most recent earnings call, co-CEO Reed Hastings has revealed that the streaming giant is currently working on the offering and that it will be finalizing details for those plans "over the next year or two." Hastings said he finds ads complex and he's a huge fan of the simplicity of subscriptions, but giving consumers who don't mind watching ads the option to pay less "makes a lot of sense."

And it could make a lot of sense for the company, too. The service lost around 200,000 subscribers in the first quarter of 2022, a development it blamed on stiffer competition, inability to expand in some territories due to technological limitations and account sharing. Apparently, 222 million households are paying for Netflix, but over 100 million more are sharing those accounts. 

Back in March, Netflix started testing a feature in Chile, Costa Rica and Peru that allowed subscribers to add two "sub-members," who'll get their own log-ins and profiles, for $3. It may just be a fraction of what a full membership costs, but at least Netflix is getting something from people who'd normally just borrow their friends' accounts.

Hastings clarified during the call that the ad-supported memberships will be added as tiers and members who don't mind paying full subscription fees don't have to be subjected to advertisements. "It is pretty clear that it is working for Hulu, Disney is doing it, HBO did it. We don't have any doubt that it works," he said. The executive also added that Netflix will merely be a publisher and that it will not track user data to match ads like some of its competitors do.

The Twitter board isn't willing to let Elon Musk buy the company without a fight. The board members unanimously approved a limited duration shareholder rights plan, which will be in place for one year starting today.

The rights will come into play if a single entity acquires at least 15 percent of Twitter's outstanding common stock without the board's approval. Should that become the case, certain shareholders will have the right to buy more stock. Flooding the market with new shares to dilute other investors' holdings is called a poison pill strategy, and it's designed to ward off an attempt at a hostile takeover.

Musk briefly became Twitter's largest shareholder when it emerged he had quietly snapped up a 9.2 percent stake in the company. He was offered a seat on the board and if he had accepted, he would not have been allowed to build up an ownership stake of more than 15 percent. Musk turned down the board seat earlier this month, though. This week, Musk made an offer to buy the entire company for around $43 billion.

The company said in a press release that adopting the rights plan will "reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders." In other words, the move will make it harder for Musk to take his buyout offer directly to shareholders and acquire their stakes in piecemeal fashion.

Twitter says the plan is similar to one carried out by other publicly traded companies that have been subject to a non-binding acquisition proposal. Notably, the rights plan doesn't prevent Twitter from accepting a buyout offer if it believes that's in the best interest of its shareholders.

Musk claimed in his buyout offer Twitter has "extraordinary potential" and that he would "unlock it." During a TED Talk just hours after making the proposal, the Tesla and SpaceX founder argued that Twitter's algorithm should be open source, "so anyone can see that that action has been taken so there's no sort of behind-the-scenes manipulation, either algorithmically or manually." He also suggested he'd err on the side of having less moderation and expressed reservations about issuing permanent bans as a punitive measure.

Elon Musk has offered to buy Twitter for $43 billion, telling the SEC in a filing that the deal would be good for free speech. "I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy," he wrote.

Musk made a "best and final offer" for $54.20 per share in cash (there's that 4.20 ref again), a premium of 54 percent over the January 28th closing price. Twitter's shares shot up 18 percent on the news. Musk implied that if the offer is rejected, he may dump some or all of his current position.

"I am offering to buy 100 percent of Twitter for $54.20 per share in cash, a 54 percent premium over the day before I began investing in Twitter and a 38 percent premium over the day before my investment was publicly announced," Musk said in the filing. "My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder."

Developing...

Elon Musk has only been Twitter’s largest shareholder for a few weeks, but he’s already facing a class action lawsuit over his handling of the investment. A Twitter shareholder has filed a class action lawsuit against Musk over his 11-day delay in officially disclosing his investment in Twitter to the SEC.

Under securities law, Musk was required to file paperwork with the SEC by March 24th — 10 days after his stake in Twitter grew to 5 percent — but he didn’t do so until April 4th. That delay might not sound particularly significant, but it may have netted him as much as $156 million. According to the lawsuit, those gains came at the expense of other shareholders, who were not able to similarly profit.

“Investors who sold shares of Twitter stock between March 24, 2022, when Musk was required to have disclosed his Twitter ownership, and before the actual April 4, 2022 disclosure, missed the resulting share price increase as the market reacted to Musk’s purchases and were damaged thereby,” the lawsuit states.

According to the shareholder who brought the suit, he and other investors sold shares at “artificially deflated” prices as a result of Musk’s actions. The suit also alleges that Musk made “materially false and misleading statements and omissions by failing to disclose to investors that he had acquired a 5% ownership stake in Twitter as required.”

The lawsuit comes after a chaotic few days for Twitter and Musk. The Tesla CEO and noted Twitter troll had initially agreed to join Twitter’s board of directors, much to the dismay of some employees. But the decision was abruptly reversed following several days of characteristically bizarre tweets from Musk, who polled his Twitter followers whether the company should change its name, and speculated on whether the service was “dying.”

In an email to employees, Twitter CEO Parag Agrawal noted that as a board member Musk would have been a "fiduciary of the company, where he, like all board members has to act in the best interest of the company and all our shareholders.” He added that he believed it was “for the best” that Musk ultimately wouldn’t take the position.

Epic Games has received two big briefcases stuffed with cash which will help it "advance the company’s vision to build the metaverse and support its continued growth.” Sony and Kirkbi, the majority owner of The Lego Group, are each plowing $1 billion into the publisher. The funding puts the post-money equity valuation of Epic at $31.5 billion, while founder and CEO Tim Sweeney remains in control.

It's not the first time that Sony has invested in Epic. It gave the company a $250 million cash injection in 2020 in exchange for a minority stake. Kirkbi also has an existing relationship with Epic. Just last week, the publisher and The Lego Group announced a partnership to build a kid-friendly metaverse, possibly in the hope of challenging the likes of Minecraft and Roblox.

“As we reimagine the future of entertainment and play we need partners who share our vision. We have found this in our partnership with Sony and Kirkbi,” Sweeney said in a statement. “This investment will accelerate our work to build the metaverse and create spaces where players can have fun with friends, brands can build creative and immersive experiences and creators can build a community and thrive.”

Epic has been piecing together a metaverse (a shared virtual world for all manner of experiences) inside Fortnite over the last several years. It built on the success of the core battle royale mode by introducing dozens of crossover skins, virtual items and dance moves; in-game movie nights and concerts; and a creative mode that lets plays build just about anything they can imagine.

Sonos has acquired Mayht, a Dutch startup best known for co-creating a Bluetooth speaker powered by light. Mayht specializes in an audio technology called Heartmotion. The company claims to have reinvented “the core of speaker driver” to allow for speakers that can be up to 10 times more compact than other models without sacrificing sound quality or bass output. And it’s that expertise Sonos is paying approximately $100 million to secure for itself.

“Mayht’s breakthrough in transducer technology will enable Sonos to take another leap forward in our product portfolio,” said CEO Patrick Spence, adding the acquisition would help the company “accelerate” its product roadmap.

Notably, Spence said the deal also gives Sonos access to intellectual property that will help it further differentiate itself from its competitors. The company is currently in the middle of a bitter legal battle with Google over speaker patents. At the start of the year, the US International Trade Commission found that the search giant had infringed on Sonos’ intellectual property, creating a situation where Google downgraded the functionality of some of its devices to circumvent an import ban.

Sonos promised to share more details about its acquisition of Mayht during its Q2 earnings call in May.

WarnerMedia and Discovery have completed their merger. Warner Bros. Discovery, as the new entity is called, will eventually combine HBO Max and Discovery+ into a single streaming service. The blend of entertainment and reality programming could help Warner Bros. Discovery better compete with the likes of Netflix and Disney+. In the meantime, the company will likely offer a bundle of the two services. WarnerMedia recently launched another streaming service in CNN+.

Not long before the merger closed, WarnerMedia CEO Jason Kilar announced his departure. Kilar, who started running the company in May 2020, was behind the controversialplan to release all 2021 Warner Bros. movies on HBO Max and in theaters on the same day amid the COVID-19 pandemic. The move seemed to have paid off, as HBO Max and HBO had 73.8 million subscribers combined at the end of 2021.

As if the departures of Kilar and several other WarnerMedia executives didn't make things clear enough, Warner Bros. Discovery will have a new leadership structure. Discovery CEO David Zaslav is running the company.

The merger is the latest in several major media consolidation moves in recent years. Amazon sealed its $8.45 billion purchase of MGM only last month. Disney spent $71.3 billion to snap up most of 21st Century Fox a few years back, while Microsoft agreed a $68.7 billion deal to buy Activision Blizzard, which is expected to close by June 2023.

AT&T announced last year it was spinning off WarnerMedia in a $43 billion deal that would combine it with Discovery. Now that the T's are crossed and I's are dotted, the deal is done and AT&T is more or less out of the content business.