Source: Company Financials, Leverage Shares analysis

Note: The effect on net cash due to the settlement of British Value-Added Tax (VAT) charges¹ over the same two years – to the tune of approximately $1.355 billion – is not being reversed.

Overall, the two business metrics’ trends show some sense of positive correlation with one another. These metrics’ trends have little correlation with those seen in net cash and net income, which fluctuate wildly as the company invested in scale-ups, paid out incentives, and so forth. However, it might have all been worth it in the present day: net cash has been positive for the past two years, with the latest year showing a 458% spike. In the same period, free cash flow is up 762%. However, « equity investment-adjusted » net income is down a little over 71% from the last time it was positive, i.e. 2018 although it is up 113% from the net loss in the previous year. This indicates that the company isn’t quite done with contending with competitors and building out new « gig » edges.

The question of « new edges » brings to light Mr. Khosrowshahi comments that he has witnessed the « Taylor Swift Effect » firsthand and a seeming attribution of success to the company. Firstly, success isn’t quite evident in a company which, for all intents and purposes, continues to be deep in the fray. His observance about the « Effect » has, in fact, been showcased in a recent study² by Bank of America: in Pittsburgh, household spending in restaurants and bars rose by $77 and $56 during the month a Taylor Swift concert was in town. In contrast, $96 and $74 more were spent in restaurants and bars respectively during the Super Bowl weekend. Miss Swift’s contribution to the local economy has also been noted by the Federal Reserve Bank of Philadelphia, which stated that her tour made May the strongest month for hotel revenue in the city since the onset of the pandemic. With almost 54,000 fans attending each American concert, it has been estimated that a total of $4.6 billion in consumer spending will be generated for the U.S. economy in a year.

The Super Bowl, despite the NFL’s best efforts, has remained a trenchantly American affair. Miss Swift, in contrast, has a global reach with her fans, often labeled « Swifties » flocking to her latest tour, a three-hour-long musical experience featuring 44 songs from the pop star’s career. Apart from purchasing concert tickets, fans are splurging an average of $1,500 on hotel accommodations, food, and travel arrangements. Early estimates³ place Miss Swift’s latest tour to have an economic impact of $5 billion worldwide, more than the Gross Domestic Product (GDP) of a third of the countries in the world.