Uber, Bed Bath & Beyond, Elon Musk, writers' strike: Wednesday's top stories

A Yahoo Finance Live panel examines several of today's top stories, including Uber's new ride service for teenagers, investors targeting bankrupt chain Bed Bath & Beyond, Elon Musk's comments on the work-from-home model, and how the Hollywood writers' strike is impacting Netflix's password sharing policy.

Video transcript

SEANA SMITH: As we continue to count down to the closing bell, let's take a look at some of the top trending stories of the day. We've got Alexandra Canal and Diane King Hall here to help us break down some of these big movers. First up, we got to talk about Uber, the company rolling out new features today at its annual product event. And among them, a way for teens to book rides. For the first time, Uber will let younger users between the ages of 13 and 17 years old sign up for their own accounts and ride alone.

But it's not totally independent. This is very important here. Their account is going to be linked to a parent or guardian's account. Now the owner of that adult account will be notified when their teen requests a ride. They'll also be able to monitor the trip in real time. They can even call the driver and speak with the driver during the ride if they need to. Akiko, at first, I was a little bit on the fence about this. I think I still am. I'm not totally sold.

But they are taking a number of steps here in order to make sure-- in order to ensure as best they can that this ride is going to be safe. And they are really expanding their ridership pool.

AKIKO FUJITA: Yeah, I mean, the bottom line is this is Uber trying to ride that momentum at a time when their closest competitor, Lyft, has really had some struggles. Uber has made it clear they want to expand the app. It's not just about ride sharing as we know it. And this is just one additional tentacle. You talked about some safety measures that are in place. Uber has said that only highly-rated, experienced drivers will be able to complete these rides for teens.

I still think that this is going to open it up to other safety concerns. But there's one more thing that they announced that I'm curious to get your take, Seana and Diane, here. They're also going to allow families to request rides with car seats in them.

DIANE KING HALL: With the car seat. Yes, I saw that.

AKIKO FUJITA: LA and New York. They've got a partnership with Nuna.

DIANE KING HALL: I saw that.

AKIKO FUJITA: I think that's a good idea.

DIANE KING HALL: It is. It is a good idea because you can't always just load in the car see everywhere you're going. So it's helpful to have that especially when you're traveling to have that feature. It's something that had been kind of informally a part of the Uber ecosystem previously, but you never knew if you were going to have a driver who had a car seat or not. And so I like that feature. And I do, actually, I like this. I do understand the safety implications. So they're going to have to figure that out with regard to teens.

I like this. And especially when you're dealing with even family members, because I've done this for one of my family members who has health issues. So I'll order an Uber and kind of handle it for her. So I like that feature. Another thing I saw that Uber did is the phone number. Right, Allie? Wasn't that cool? They launched a new phone number for family members who just can't-- older family members who can't do the app.

ALEXANDRA CANAL: My mom still has me follow her ride. So I know exactly where she is at all times.

DIANE KING HALL: As you should.

ALEXANDRA CANAL: As I should, which is always a good thing. But I do not have any children. But I was a teenager at one point. And I would have loved this feature, especially during those moments when you're running late to somewhere, you need a ride somewhere. But one thing that I'm curious about is how this will affect ratings. Because I saw on TikTok there's a trick to find your ratings. I have nine one-star ratings.

SEANA SMITH: Nine? What do you do?

DIANE KING HALL: Allie, what--

ALEXANDRA CANAL: Seana, I get-- I'm going to send you this TikTok trick because all my friends were shocked at how many one-star ratings, they had over the course of their Uber experience. And this story just made me think of that. So go on TikTok, figure out--

AKIKO FUJITA: A one-star rating for you as a rider? Are you rating the driver one star?

ALEXANDRA CANAL: As a rider. Now, I am blaming all the trips I ever took with friends, or family members.

SEANA SMITH: Maybe they're getting mixed up--

ALEXANDRA CANAL: Maybe they're getting me mixed up by someone else. But I encourage everyone to go check out that TikTok hack because it's pretty wild to see those results.

AKIKO FUJITA: Yeah, it's a little hit to the ego, right? I have seen my rating. I haven't checked it lately. But it's not the best. I think I am a good rider. But we can share that in another conversation. All right. Let's talk about the story I'm watching here. Bed Bath & Beyond may be going out of business. But that has not stopped retail traders from betting on the company's turnaround.

The "Wall Street Journal" reporting the stock, which now trades, by the way, in the over-the-counter market remains among the most popular trades for individual investors on platforms like Fidelity. In fact, the Journal reports that last Friday, investors bought more shares of the retailer than that of Meta and Alphabet. It's made up about nearly 10% of trades on the OTC market with investors speculating about the company's future and a potential U-turn.

Guys, I will remind viewers who are looking at this to say, number one, the company has filed for bankruptcy. They are shutting down more than 300 stores. And by the way, the company has also said, investors will likely get wiped out. And yet, here we are, talking about retail traders betting big.

DIANE KING HALL: Yes. Akiko, I'm like, is this a YOLO trade? What is even happening? I looked at it today. It was up. It's like, OK, so it closed at $0.17 a share yesterday, up at like $0.18 a share today. I don't know what-- why people are getting involved with this right now. I mean, this is-- I mean, Seana, this is crazy, right?

SEANA SMITH: It doesn't make sense. But it's also this is something that we've seen before when companies file for chapter 11 protection. We saw it with Revlon last year. We saw it with Hertz going back to 2020. It does not make sense. I don't think it is a smart move. If obviously, if you are one of these people that are buying these shares for 17, $0.16, whatever it is today, you've got to be ready to lose all of it because the company has said that the shareholders are going to be wiped out.

And if you're betting on a turnaround strategy from Bed Bath & Beyond, it's going to take a heck of a lot of work given that amount of debt load, what they have in liabilities over five billion when they filed.

ALEXANDRA CANAL: Fundamentally, it doesn't make sense. But knowing these [INAUDIBLE] traders, I am not surprised by this at all. Even the week that Bloomberg reported that there was a bankruptcy coming, the stock was up over 30% at that point. So this is just one stock that I think meme traders have fallen in love with for whatever reason. This was the start of the meme craze. And I remember when we were a part of that, that was such a crazy story to see unfold. But Bed Bath Beyond was at the center of that. So I think they're not going to give up on this company anytime soon, even if the fundamentals don't make any sense.

DIANE KING HALL: Clearly. I mean, it's getting a lot of chatter on social media as well. I saw chatter on it today. And I'm just like, what? Why? I don't understand. I mean--

AKIKO FUJITA: I mean, at the end of the day, it doesn't cost a lot. Let's end it there. If it's $0.16 a share or whatever it is, what do you have to lose?

DIANE KING HALL: This is true. One more thing that's-- or a person, I should say, that's getting a lot of chatter, that would be Elon Musk, who slammed work from home in a wide-ranging interview yesterday. He called it quote, "morally" what was the word he used? Morally bankrupt? Was that-- morally wrong. That's what he called it.

Another quote that stood out to me was when he said the quote, "laptop class is living in La La Land", his point in part was that service workers, like people who work on cars and your home have to be in person. So why not just about everyone else? He also said he thinks people are more productive in person. Now he said that before.

We did a Twitter poll today, Yahoo Finance, to see if others agree that it is quote, "morally wrong". Nearly 30% of people agreed with Musk. That surprised me. 45% said it's not morally wrong. And the rest were pretty much agnostic, basically. They said it could be a case-by-case basis.

ALEXANDRA CANAL: I personally think morally wrong, I don't know if I necessarily agree with that. I think there are certain jobs that you have to be in person for. If you're a doctor you can't do surgery from home. But in other types of situations, you can complete your job from home. I also think that in this environment, at least right now with unemployment low, the hybrid model is sort of here to stay. The "Wall Street Journal" had a piece on how the return to office has stalled overall, and that the majority of workers are going in two, three times a week because they have that leverage that they can pull with their employers.

And employers are sort of too scared to say, OK, you have to be in the office five times a week. They've gotten used to this flexibility.

[INTERPOSING VOICES]

AKIKO FUJITA: So to pick up on Allie's point, though, I mean, if you look at where things are, things have stalled. Castle, which is they put out some pretty good data every week on where office occupancy is right now, they've got it at about 49 and 1/2%, roughly 50%. And companies are having to make that decision, whether they want to say you've got to return to work even if you lose some employees, or you say the hybrid model works.

Now, Elon Musk's point about service workers having to work actually makes sense to me. But if you don't need to come in, if that doesn't knock productivity, what is the case for a return to work? At least, you could argue that's why companies are sticking to a hybrid model.

DIANE KING HALL: Yeah.

SEANA SMITH: Yeah, I mean, this is no surprise from Elon Musk. He was one of the first out there who was very critical that people were even working from home in the first place. He first gave the ultimatum to Tesla employees that they needed to be back at a minimum of 40 hours in the office per week. And then of course, when he bought Twitter, he also gave that same ultimatum to employees there. When it comes to what employees want, at least in this environment, given the fact that the labor market remains very tight, employees tend to have the upper hand.

So if employees do want to work from home, or have that hybrid model, and are able to do their jobs at home, it does make it very tough for bosses, for executives, to force people to come in on a day-to-day basis if they want to retain some of that top talent. We were mentioning some recent surveys and what we've seen in terms of recent data. There was also one out from Pew Research saying that a third of workers with jobs that can be done remotely are working from home all the time.

About 40% do a hybrid situation. So clearly, people like flexibility. They like it to some degree. It might not be fair, but if you're able to do your work from home, it's tough to argue against that.

ALEXANDRA CANAL: And I will say, if you work from home, it makes it a heck of a lot easier to Netflix and chill. And that is my company that I'm looking at today. After a new note from JP Morgan, analyst Doug Anmuth suggested the company's password-sharing crackdown could be at risk amid the ongoing writer's strike. Anmuth suggested Netflix might not like the optics of announcing this crackdown, which is essentially a price increase from the viewpoint of consumers as production for many of its major shows like "Stranger Things" and "Cobra Kai" remain paused amid this strike.

The analyst did add that the delay will likely have a ripple effect on the growth of its ad tier, as a password crackdown would have driven more users to sign up for the cheaper option. Now, guys, it's worth noting that Netflix did say the password-sharing crackdown will hit the US sometime in the second quarter. So we haven't passed that deadline yet. But you have to wonder how Netflix is approaching this, especially from a revenue and profitability standpoint.

DIANE KING HALL: I mean, that was the idea with announcing password-sharing crackdown. They're doing it overseas. And it has taken a effect in certain countries. It's supposed to take effect in the UK within the next couple of weeks. So they're still moving forward with that plan and maybe still testing the waters with how they've talked to partners over across the pond about the potential ripple effect of that, and potential consequences from that, and the response to that.

But they're moving forward with that plan. So I don't know that-- I understand that the writers strike is in play here. So that could certainly maybe dial back their plans about when it's going to happen. But I think it's still going to happen.

AKIKO FUJITA: Well, and you could argue, Allie, I know you've been watching the writers strike closely. We're now, what, in week three of that? There are no signs of any type of deal being reached. I mean, this is just one thing that Netflix is going to have to worry about if this strike goes on as long as we expect it to, which is to say that writers are saying they're not going to budge right now.

And so while we've heard from some of these streaming companies saying the pipeline looks OK for now, I do wonder what other levers these streaming sites are going to have to pull because the Writers Guild, at least, is making it pretty clear. They're really in it for the long haul.

SEANA SMITH: Yeah, exactly. I mean, I think that is the big question right now just in terms of what this is going to do for potential subscriber growth, or lack thereof, because of the fact that so many of their hit shows, or some of their hit shows, I should say, including "Stranger Things", "Emily in Paris", I think also production shutdown as a result of the writers strike, what exactly this is going to do to Netflix's profit-- profitability here, at least in the short term.

We already know Netflix has been cutting costs, or is looking to cut costs, going forward. Initially reported by the Journal last week, about $300 million cut that they are looking at over the coming quarters here. So Netflix is in a tough spot. We know that they are relying on the password crackdown in order to boost revenue down the line.

If they have to delay it to the third quarter, I think there's going to be a heck a lot of questions, or people wanting an analyst to ask those questions on the next earning call.

DIANE KING HALL: So I'll do a confession here since we did a confession earlier. So I do share someone's password. But it was-- look. We were in the same household before. It's my ex, my ex-husband's password. So I will get one when that time comes.

SEANA SMITH: Are you going to get the full one? Or are you going to go with the ad here? Because that's the other argument. That could really delay the growth of the ad tier segment.

DIANE KING HALL: This is true. It's-- at least I have time--

AKIKO FUJITA: Diane, I appreciate the honesty here. But I don't think you have to be shy about that. I mean, I share passwords.

ALEXANDRA CANAL: Guilty.

AKIKO FUJITA: We do it in the family. I mean, there are so many people that do that, which is why Netflix sees this as a huge lever to drive revenue. Right?

SEANA SMITH: Yeah, they do. And it makes a heck of a lot of sense. I think a lot of people--

DIANE KING HALL: --would use it.

SEANA SMITH: Are pirating, at least to some degree. Sharing password. Sharing's the most, I guess, easiest way to say it, and most friendly way. All right. Diane, Allie, thanks so much for hopping on for this.