Displaying items by tag: Wall Street

Global ride-hailing firm Uber has projected a more measured valuation ahead of its IPO debut on the New York Stock Exchange later this week.

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US chipmaker Qualcomm has seen its shares prices soar on the New York Stock Exchange following the end to a long-running dispute between them and iPhone manufacturer Apple over patent license agreements.

The pair where set for another protracted legal battle in San Diego but managed to broker an agreement that satisfied both parties over royalty payments.

It has been reported that resolution deal between Apple and Qualcomm includes a six-year license agreement with the option to extend for two years, and a payment to Qualcomm from the US tech behemoth.

Qualcomm shares rocketed by 15.2% as news of the deal broke on Wall Street. Apple saw its share price rise by 0.7% although it was significantly less than that of Qualcomm. Dow member IBM saw its shares plummet by 4.6% after Q1 sales fell short of analyst projections.

The US economy has been under the microscope in recent weeks after some fiscal analysts had claimed it was slowing down. However, Wall Street stocks were mostly higher following better-than-expected Chinese economic data.  China's first-quarter growth came in at above expectations at 6.4 percent following government stimulus measures, a report that eases concerns about slowing global growth.

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Social networking colossus Facebook has seen its shares soar to a record high after it disclosed the financial results of its second quarter, which revealed that its mobile advertising business has grown by a staggering 50%. The results reaffirm the view that Facebook is now the venue of choice for an ever-increasing amount of online advertisers.

Facebook owns four of the most popular mobile services in the world, and it has seen it shares rise by more than 4% to $173 following after-trading on the Wall Street Stock Exchange. However, overall Facebook’s stock price has climbed to almost 44% this year.

Facebook has been adding more and more advertising into its Facebook News Feed, but that has become condensed, whilst it has also added adverts to its photo-sharing app Instagram, which has more than 700 million users. Facebook currently has over 2 billion users worldwide.
Facebook CEO, Mark Zuckerberg has confirmed that he plans to monetize its two messaging services Messenger and WhatsApp, which combined have more than 1 billion users each. Zuckerberg has expressed his desire to see the company move faster on this aim, but claimed he is confident they will get it right in the long-term.

Facebook also continues to accelerate its push into video, the social networking giant has identified this as an opportunity to win advertising spend from the TV industry, as more and more people spend their time consuming news and video content on its platform. Facebook is expected to launch a new video service that will include scripted shows, which is a sharp change of strategy from an organization which is founded on user-generated content.

Zuckerberg has previously stated that he firmly believes that video represents the future of Facebook’s business over the next 2-3 years. Facebook has officially confirmed that its total revenue rose form 44.8% to $9.32 billion in the second quarter of the year, which beat the average forecast of the $9.20 billion predicted by financial analysts. Facebook enjoyed incredible growth in mobile advertising, which has increased to nearly $8 billion.

Facebook Chief Financial Officer, David Wehner, expressed his delight at the financial results, and claimed that he expected to see Facebook continue to grow its mobile advertising capacity. He said: “In mobile we're continuing to see great strengths. We're seeing more and more ad dollars getting allocated to mobile, and we think that trend will continue."

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Netflix is reaching a major milestone in its history. The subscription-based video-streaming platform added five million new subscribers globally in the first quarter of 2017, which brings its total subscriber base to about 99 million users. However, the company missed Wall Street and analyst subscription predictions.

“We expect to cross the 100 million member mark this weekend,” said Netflix in a letter to shareholders on Monday April 17. “It’s a good start.”

Netflix CEO Reed Hastings pointed out that Netflix still has a way to go to be ranked among the likes of YouTube and Facebook which boast over a billion users globally. “Our viewing is very large and growing, but nowhere near as big as YouTube,” said Hastings. “We definitely have YouTube envy.”

In order to keep growing as a company, Netflix says it will implement a significant marketing strategy, spending more than $1 billion this year to “drive member acquisition.” The company reached a decision to launch in almost every country in the world and invest heavily in original content to increase its subscriber base.

Netflix original shows such as The Crown, Black Mirror and the Marvel series have been a success for the platform. The company has also invested in exclusive deals with international stars such as Shah Rukh Khan and Adam Sandler to maintain its appeal.

However, Netflix is said to have “disappointed” Wall Street by missing its subscriber forecast. For the quarter ended 31 March, Netflix claimed 98.75 million streaming video subscribers globally, adding 4.95 million new members in the three-month period. But this missed analyst estimates of 5.27 million and its own guidance of 5.2 million. New domestic subscribers for Netflix came in at 1.42 million, versus Wall Street forecasts of 1.59 million, and Netflix’s own guidance of 1.5 million.

Missing the targets has some investors feeling nervous. However, the company did see a 35 percent year-on-year increase in revenue to reach $2.64 billion in this first quarter, which did meet expectations, and EPS was $0.40 per share, which was above the $0.37 that analysts predicted. Wall Street had been modeling for Netflix to earn 24 cents a share excluding items on sales of $2.76 billion.

Snap Inc. the parent of the app Snapchat saw its shares drop on the New York Stock Exchange on Monday, March 6, as the momentum of its debut on Wall Street the previous week died down. The company’s shares were down 2.26 percent to $23.77 at the close of formal trading on the Stock Exchange.

Snap’s shares jumped 44 percent to close at $24.48 in its inaugural trading day, after raising $3.4 billion in the largest US tech company public listing since Facebook in 2012. The company, known for its popular disappearing messaging application, had priced its offering at $17 to give it a market value of $24 billion.

Snap’s strong debut on Wall Street lifted the company’s value to $28 billion - more than double that of social media rival Twitter, which went public in 2013. The following day, Snap’s shares climbed even higher.

The company boasts over 158 million daily active users who create 2.5 billion "snaps" a day in 20 different languages, generating an expected $936 million in revenues in 2017, according to a report by venture equity firm Goodwater Capital. The report reads, "Snapchat is well-positioned to scale rapidly and take market share in the $652 billion global advertising market."

However, some aren’t so enthusiastic about Snapchat’s potential, referencing Twitter, which has struggled to grow its user-base since its 2013 IPO, and now trades well below its offering price.

On March 6, five of seven financial analysts covering Snap advised investors to "sell" the stock, and none were advising buying shares, according to data compiled by Bloomberg. It remains unclear if Snap can expand beyond its core base of young users or how it will fare in many international markets in a competitive social media landscape.

Published in Apps

Snapchat’s corporate parent Snap Inc. reportedly seeks to raise over $2 billion for the fast-growing social media group in the technology sector’s largest public offering in nearly three years. Filed documents showed that Snap Inc. expects net proceeds of some $2 billion.

The Snap Inc. IPO will provide 145 million new shares and sell 55 million from existing share owners, with an expected price range of $14 to $16, according to the documents filed with the Securities and Exchange Commission. The IPO – confirmed with a public filing on February 2 – would be the largest in the tech sector since the Chinese e-commerce giant Alibaba hit the US market in 2014.

According to a Wall Street Journal report, the listing would value Snap Inc. at between $19.5 billion and $22.2 billion. Wall Street and the technology sector are expected to follow the move closely, with other highly valued companies such as Uber and Airbnb said to be considering going public themselves.

The app Snapchat, known for its disappearing photo and video messages, has become hugely popular with young smartphone users. The company began raking in revenue once it expanded its offerings to enable publishers to deliver content on the platform. Some 158 million people use Snapchat every day, according to Snap’s filing, with more than 2.5 billion Snaps created daily.

The company has partnered with various publishers and organizations, including one recently announced by the New York Times. Some analysts have suggested Snap has the potential to challenge Facebook, while others insist Snap will end up like Twitter, consistently losing money with its existence as an independent firm in peril.

Published in Finance

Snap Inc. the parent company of the popular social networking app Snapchat filed public documents for a share offering on February 2, ending speculation that the company would seek an IPO. Snap Inc. reportedly hopes to raise up to $3 billion in its highly anticipated Wall Street debut.

California-based Snap Inc. had earlier filed confidential documents for an initial public offering last year. The Wall Street Journal reported in October that Snap Inc. was preparing for a 2017 share offering, which would bring to Wall Street one of the most prominent of the venture-backed tech ‘unicorns’.

Snap’s IPO was expected to be one of the most significant tech company IPOs in recent years with a valuation, according to AFP, likely to top $20 billion. In documents filed with the Securities and Exchange Commission, Snap Inc. said it took in $404 million in revenue last year, but lost $515 million.

The company is famous for Snapchat, the app which features disappearing photo and video messages. To expand its offering and generate revenue, Snap allowed publishers to deliver content through the platform.

Some of the many publishers that Snap has partnered with include CNN and the New York Times. According to the company’s filing, 158 million people use Snapchat daily, and over 2.5 billion Snaps are created every day. Like other social media platforms, Snap said it expects to derive most of its revenue from advertising. The company will thus compete against rivals Facebook and Twitter.

However, Snap Inc. noted that since its inception it has been losing money and “may not achieve or maintain profitability.” Nevertheless, Snap’s offering on the New York Stock Exchange is the largest for a technology company in the US since Chinese e-commerce company Alibaba listed in 2014.

The IPO documents did not provide share pricing and noted that the amount to be raised could be revised before the market debut, which is likely to take place in March.

While some analysts say Snap has the potential to challenge Facebook, others say it could end up like Twitter, which consistently lost money and whose existence as an independent firm is in peril because of its inability to grow its user base.

The value of Snap Inc. has been labeled “hyper-inflated” by Global Equities Research analyst Trip Chowdhry who advised investors in a note to steer clear of the IPO.

“We are at the tail end of social-media boom - novelty is giving way to fatigue,” Chowdhry said. “Durability is absent in SnapChat - it's the next Groupon, the next Zynga, the next GoPro, the next FitBit.”

All of the companies he listed lost momentum after public debuts accompanied by high expectations. The Snap IPO will be structured with different share classes, allowing co-founders Evan Spiegel and Bobby Murphy to control 88.6 percent of the voting rights.

 

  

 

Published in Finance

Twitter falls short again with disappointing Q2 results

Written on Thursday, 28 July 2016 12:30

Twitter’s stock went tumbling down on July 26, down 10 percent in after-hours trading, after the social media network posted a disappointing revenue forecast that was well below the expectations of Wall Street. In Q2 Twitter saw its slowest revenue growth since going public in 2013.

The company’s service operator’s shares fell 11 percent in extended trading hours to $16.40, according to Reuters. Twitter is struggling to boost its user growth, compared to its social media adversaries such as Instagram and Snapchat which are both expanding their footprints. Jack Dorsey, co-founder of Twitter, returned to the company as CEO a year ago, but his plan for reviving Twitter hasn’t exactly panned out.

“We’re seeing a continuation of the trends discussed last quarter with less overall advertiser demand than expected,” Twitter said in a letter to shareholders on Tuesday, July 26. The company’s growth continued to spiral downwards in the second quarter, expanding 20 percent year-on-year, compared to the 61 percent growth it delivered at the same time last year. Blame for the sluggish growth has been attributed to increased competition for social-marketing budgets and the fact that the prices Twitter charges to advertise on its service is higher than others.

“This has proven to be a headwind in growing Twitter’s share of overall social budgets and in our ability to grow faster in both video and performance advertising,” said Twitter. Unfortunately for the company, revenue isn’t the only area that isn’t showing promise. Subscribers to Twitter have significantly slowed down, with Twitter adding just 3 million new users in Q2. In the U.S., Twitter’s monthly active users grew from 65 million to 66 million.

In an attempt to recover from its financial and subscriber slump, Twitter is reportedly trying to reposition itself as a mainstream online service similar to Facebook, as opposed to a niche product that isn’t essential to peoples’ lives. CEO Jack Dorsey wants to position the company as the essential destination for live video and updates for following real-time events, from sports to politics.

But investors aren’t feeling optimistic about Twitter, seeing as the company posted a net loss of $107 million, or $0.15 per share, on a GAAP basis in the second quarter. What’s more, Twitter’s stocks have tumbled about 50 percent from its 52-week high of $36.67, according to Business Insider, but the company has regained some ground recently after bottoming out under the $14 mark.  

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Facebook Inc. released its Q1 financial results reporting a 50 percent revenue increase, soaring past Wall Street predictions thanks to its vastly popular mobile app and push into live video streaming, which has encouraged more advertisers and pushed existing advertisers to spend more.

On Wednesday night (April 27) Facebook’s shares increased 9.5 percent in after-hours trading to $118.39, which set the company on track to open at a record new high the following day at almost triple its initial public offering four years ago.

In addition to the astonishing Q1 results, Facebook further announced that it will be creating a new class of non-voting shares in order to let its CEO and founder, Mark Zuckerberg, give away his huge wealth without losing control of the company. The new class of non-voting shares will be given as a dividend to existing shareholders.

Zuckerberg wants to give away 99 percent of his wealth, and this would allow him to sell non-voting stock to fund his philanthropic endeavors while keeping the voting stock that assures his control of the company.

How has Facebook Inc. created so much revenue? Mark Zuckerberg shared an image with reasons why the company is excelling in every way. According to the image, some 1.65 billion people are connected to Facebook as of March 31, up from 1.44 billion in 2015. Zuckerberg adds that users spend more than 50 minutes per day on Facebook, Instagram and Facebook Messenger, which is a huge amount of time considering the vast range of apps available to people today.

But when it comes to revenue, the reason Facebook is doing so well is advertising. Since television is losing popularity to OTTs, advertisers are moving money from television to the internet and mobile platforms, and they see Facebook as one of the major beneficiaries. Of course Facebook faces significant rivals, such as Snapchat and YouTube, companies that also garner billions of users every day.

However, Facebook is also moving into other areas to stay relevant. The company has expanded its live video product making it more user-friendly to encourage more users to create videos and share them. Q1 results showed how this was a successful move when it comes to advertisers, because the company was able to boost its operating profit margin to 55 percent from 52 percent in 2015.

“The company consistently ‘warns’ about higher spending, but they consistently manage their spending to deliver earnings upside. They’re an impressive company, and they leave very little room for criticism,” said Wedbush Securities analyst Michael Pachter.

Although Facebook did not reveal any details about sales of the Oculus Rift Virtual Reality (VR) headset, the company emphasized that earnings from Oculus Rift would not make a heavy impact on the company’s overall earnings and that it is still early days.

In fact, Facebook Inc.’s net income attributable to common shareholders almost tripled to $1.51 billion (52 cents per share) in Q1 from $509 million (18 cents per share) in 2015. Excluding items, Facebook earned 77 cents per share, beating Wall Street’s 62 cent consensus.

Total revenue rose to $5.38 billion from $3.54 billion, with ad revenue increasing 56.8 percent to $5.20 billion. Mobile ad revenue accounted for about 82 percent of total ad revenue, compared with about 73 percent a year earlier. Analysts on average had expected revenue of $5.26 billion.

Commenting on the successful Q1 results for Facebook compared to other tech companies, Daniel Morgan, senior portfolio manager at Synovus Trust Company which owns about $40 million worth of Facebook shares, said: “After Intel and IBM last week, and then Twitter and Apple yesterday, this is by far the best number I’ve seen in technology.”

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