Brew Markets – Episode Summary

Episode Title: Will Investors Bet on Robinhood? & Duolingo’s Learning Patience
Date: November 6, 2025
Host: Ann Berry
Co-host: John Pateau

Overview

In this episode, Ann Berry and John Pateau dive into notable earnings reports and market trends, unpacking investor sentiment around Robinhood, Duolingo, and Planet Fitness, the potential ripple effects of a Warner Brothers sale, and the psychology behind stock splits. They blend sharp financial insight with a conversational tone, highlighting how headline performances can mask deeper investor worries.

Key Discussion Points & Insights

1. Robinhood’s Paradox: Blockbuster Growth, Sinking Shares

[00:03–03:42]

• Earnings Recap: Robinhood posted Q3 earnings that beat both revenue and profit expectations, with notable crypto-driven revenue growth (up 300% YoY to $268 million, but still 7% below forecast).
• Stock Movement: Despite the strong numbers, shares dipped by nearly 10% during trading.
• Revenue Mix Concerns: While topline figures look strong, the composition worries investors—crypto peaked but missed projections, while prediction markets became a $100 million revenue stream via third-party partnerships.
• Regulatory Risks: Prediction markets, recently allowed in the U.S., carry perceived insider trading dangers.
• Cost and Margin: Expenses are expected to be higher due to expansion, but adjusted EBITDA hit $740 million with ~60% margins—a healthy figure.
• Valuation Skepticism: With Robinhood up 250% YTD and valued at a $130 billion enterprise (~70x profits), even bulls are cautious.

  “Long-term bulls, but look for a better entry point. Better entry point is a jargonized way of saying look out for a price cut.” – Ann Berry [02:53]

2. Duolingo: Great User Growth, Shaken Confidence

[03:42–08:52]

• Strong Metrics: Revenue up 40% YoY (to $272 million); daily active users +35% YoY (51 million); paid subscribers also up sharply; EBITDA at $47 million.
• Shares Tanked: Despite wins, shares fell by 28% post-earnings.
• Strategic Pivot: CEO Luis von Ahn announced a focus on retaining users over immediate payment or ad monetization, betting that long-term AI development across multiple subjects will pay off.

  “We’re doing this now because we want to keep growing users for a long time and because of our increasing conviction that AI can fundamentally change what’s possible in how we teach.” – (quoted by John Pateau, [04:36])

• Skepticism on Broader Thesis: Ann questions the practicality of competing, even with AI, for users’ limited educational attention against giants like YouTube, and perceives the new strategy as an admission that early monetization is driving users away.

  “To me [it] sounded like code for trying to monetize people too early is not working. We are seeing attrition and we need to stop the bleeding.” – Ann Berry [05:41]

• AI Backlash & Marketing: After past backlash against “AI-first” branding (and fears of cutting human employees), Duolingo plans to restart its quirky “unhinged owl” ads. Analysts, however, question whether the cultural moment has moved on.

  “They pulled [the ads] for the last quarter, but they’re going back to unhinged ads because it really drove a lot of people to the app.” – John Pateau [08:35]

Market Context: Other EdTechs like Chegg (-42% YTD) and Udemy (-37% YTD) are struggling similarly.
> “Duolingo shares down 40% each year to date. 40% seems to be the number for all of these popping on down.” – Ann Berry [07:45]

3. Planet Fitness: Winning with Scale, Not Just Gyms

[08:52–13:38]

• Strong Quarter: Revenue beat ($330 million+), adjusted EBITDA up to $141 million, 35 new clubs opened for a network of 2,795 locations and 20 million members.
• Unique Competition: Their biggest competitor isn’t another gym, but “a fear of walking in the front door.”

  “I think our biggest competitor is a fear of walking in the front door.” – Planet Fitness Leadership, quoted by John Pateau [10:28]

• Inclusive Model: The “Judgment Free Zone” attracts diverse members. Their free High School Summer Pass brought 3.5 million teens—though current members have mixed feelings.

  “Planet Fitness basically opened up a daycare center.” – John Pateau (relating his friend’s complaints) [11:05]

• Member Anecdotes: Ann shares a story about how the gym’s emptiness appeals to some (“I can go and nobody will see me. And half the stuff doesn’t work... but I get my workout done.” – Ann Berry’s friend [12:32])
• Recurring Revenue: Many pay but rarely visit—good for the bottom line.
• Resilience vs. Peloton: Planet Fitness is thriving (+23% Y/Y), while Peloton faces another massive recall and struggles with growth into commercial spaces.

4. Movie Theaters & The Warner Brothers Sale Uncertainty

[14:08–16:18]

• Earnings for AMC & Cinemark: Both chains point to film release timing—“a weak first quarter... blazing hot second quarter... softened third quarter”—as the dominant factor for their fortunes.

  “The theaters can’t control the flow of movies.” – John Pateau [14:22]

• Warner Brothers Up for Sale: With bids from Paramount, Comcast, Amazon, and Netflix, there are concerns that consolidation will mean fewer theatrical releases and revenue pain for theaters.

  “If Netflix purchases Warner Brothers… the concern is that Netflix gets the library… puts it on [their] streaming service… we may be seeing fewer movies from Warner Brothers and that could be a big hit to these movie theaters.” – John Pateau [15:44]

• Mixed Market Reaction: AMC +3%, Cinemark -1%, Warner Brothers Discovery -1%.
• Broader Media Volatility: Ann highlights the digital-vs-experiential tension and promises ongoing coverage.

5. Stock Splits: Investor Psychology Explained

[17:53–23:08]

• Listener Question: Tyler in Columbus asks why Netflix and ServiceNow are splitting their stock.

• Mechanics: A stock split increases share count and reduces price per share, without changing total value.

• Netflix Example: 10-for-1 split reduces roughly $1000/share to ~$109/share after Nov 14.

• Why Do It?

  • Accessibility: Historically, to let smaller investors participate—though now, anyone can buy fractional shares.
  • Behavioral Finance:
    • “Anchoring bias”—investors perceive post-split shares as “cheaper.”
    • “Availability bias”—splits attract attention and buying.
    • “Gambling preferences”—owning many shares feels more enticing.
    • “Success signal”—stock splits correlate with strong performance.

• Practical Reason: For employee stock option programs, a lower price per share can make exercising options easier, since fractional options often aren’t available.

  “A stock split doesn’t make a company fundamentally more valuable. It just slices the same pie into more pieces.” – Ann Berry [20:48] “Nonetheless, stock splits often do result in short-term abnormal returns, with companies seeing an average 2–4% increase in total value around the split announcement. This is a phenomenon that researchers call the announcement premium.” – Ann Berry [21:48]

• No Action Needed: Stock split shares are automatically credited to brokerage accounts.

6. Market Close Snapshot & Headlines

[23:23–24:00]

• Markets Down: S&P 500 -1.1%, Dow -0.8%, Nasdaq -2%.
• Breaking News: Ford is reportedly considering cancelling the electric F-150 due to weak demand—potentially the first major U.S. EV casualty.

  “If the electric 150 goes away, the money losing truck would be America’s first major EV casualty.” – John Pateau [23:50]

7. Notable Quotes & Memorable Moments

• On Robinhood’s stock drop:

  “Long-term bulls, but look for a better entry point.” – Ann Berry (citing Morgan Stanley, [02:53])

• On Duolingo’s pivot:

  “Trying to monetize people too early is not working. We are seeing attrition and we need to stop the bleeding.” – Ann Berry [05:41]

• On Planet Fitness:

  “I think our biggest competitor is a fear of walking in the front door.” – Planet Fitness Leadership, via John [10:28]

• On Movie Theaters’ existential risk:

  “The theaters can’t control the flow of movies.” – John Pateau [14:22]

• On stock splits:

  “A stock split doesn’t make a company fundamentally more valuable. It just slices the same pie into more pieces.” – Ann Berry [20:48]

Timestamps for Major Segments

• Robinhood Earnings & Market Reaction: [00:03–03:42]
• Duolingo Earnings & EdTech Trends: [03:42–08:52]
• Planet Fitness & Gym Industry: [08:52–13:38]
• AMC, Cinemark & Warner Brothers Sale: [14:08–16:18]
• Stock Splits Explained (Netflix, ServiceNow): [17:53–23:08]
• Market Close, Ford EV News: [23:23–24:00]
• Upcoming: Tesla Pay Vote Tease: [24:00–24:36]

Tone & Style

Ann and John keep the conversation breezy yet substantive—mixing sharp financial analysis with personal anecdotes, skepticism, and a little humor (“bringing crazy back” with Duolingo’s marketing, [08:52]). Ann is particularly candid in challenging management narratives and flagging where investor optimism might hide risk.

For New Listeners

This episode offers a compelling snapshot of how market sentiment can diverge from company narratives and topline results. The discussion threads through several sectors (fintech, EdTech, fitness, media, and behavioral finance), always rooting big moves in psychological drivers and practical implications for investors.

End of Summary