Five interesting things that Hodges Capital research analysts discovered this week...

 #1 ADVERTISING DOLLARS: Total advertising spending on social media platforms in the US reached nearly $94 billion in 2023, an increase of roughly 15% year over year, driven almost entirely by short-form videos, according to a recently published Advertising Market Outlook Report by market intelligence firm Advertiser Perceptions. Advertiser Perceptions also projected that total ad spend for the category will increase another 14% this year and 11% in 2025, with nearly all the growth from short-form videos. Last year, Meta said that up to 200 billion Reels videos were watched daily across Instagram and Facebook, up from 140 billion in 2022.

#2 WHERE DID ALL THE PUBLIC COMPANIES GO? Since the late 1990s, the number of US publicly traded companies has plunged from just over 8,000 in 1996 to about 4,640 in 2022, according to Chartr. The decline is best explained by increased regulations, the cost of being a public company, mergers and acquisitions, and the increase in private equity and ventral capital funding. Private equity and venture capital aren’t permanently devouring young companies, but they are delaying the emergence of these companies into publicly traded stocks. Mergers and acquisitions appear to be the biggest driver of the decline in publicly traded companies.

#3 TOYOTA’S DOMINANCE: Toyota Motor announced a record-breaking fiscal year ending in March, with global sales reaching 11.1 million vehicles, a 5% increase from the previous year. According to an article in The Car Dealership Guy, this represents the most sales in one year from any car brand. Growth was driven by strong demand in North America, where sales surged 20% year over year in the March quarter. The Company’s strategy of leading with hybrid vehicles while it slowly tests the waters on the EV market appears to be paying off in a big way. Toyota sold 206,850 hybrid and electric vehicles in the March quarter, representing a 74% year-on-year increase and 36.6% of its total sales volume.

#4 BRANCH NETWORK: According to The Wall Street Journal, JPMorgan closed its historic branch at 45 Wall Street, ending its 150-year stint on the iconic street where John Pierpont Morgan created the building blocks for what would become America’s largest bank. The number of bank branches in the US increased by 21X to ~83,000 from 1945 to 2012. 13,000 bank branches have been closed since 2012, according to data from the Federal Deposit Insurance Corporation (FDIC). The primary drivers were the growth in online banking and a period of extremely low interest rates. With higher interest rates, the competition for deposits is increasing and could spur new branch openings. JPMorgan recently announced plans to open 500 new branches by 2027.  

#5 VINYL MAGIC: Streaming giant Spotify recently announced that the newest album from megastar Taylor Swift, The Tortured Poets Department, has smashed previous records: It’s the first album in Spotify’s history to have more than 300 million streams in a single day. The album also broke her own record for the most sales of a vinyl album in a week, with over 700,000 copies sold in just three days, according to Variety. It is possible that there were albums that sold more than 700,000 vinyl copies in a week back in the ‘60s and ‘70s, but that data wasn’t being collected then. No one else has come even close to Swift’s opening numbers over the last 33 years.

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