|Day's Range||836.00 - 836.00|
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) relies heavily on advertising revenue, but has expanded its business into the growing cloud computing market, where IBM (NYSE: IBM) also plays. The cloud is an exciting segment, but that didn't help these tech titans avoid the impact of the COVID-19 pandemic. IBM was well on its way to repositioning its business around cloud computing services when the pandemic struck.
(Bloomberg Opinion) -- What was a turbulent enough week for TikTok turned downright bizarre on Friday.Already, Secretary of State Mike Pompeo had warned that the Trump administration was looking at banning the short-video platform owned by Beijing-based parent ByteDance Ltd. over data-privacy concerns, and President Donald Trump himself said he was considering banning TikTok as one way to retaliate against China over the coronavirus. Then things got worse when Amazon.com Inc. on Friday sent an email to employees telling them to delete the TikTok app from mobile devices they use to access company email, citing “security risks.”The bizarre part happened just hours after that, when Amazon issued a statement saying the it had sent the email to its employees “in error” and there was no change in their policies toward TikTok. All clear? Not quite. For soon after Amazon corrected the record on its TikTok policy, Wells Fargo & Co. confirmed a report from the Information that the bank had told employees to delete the app from work phones because of “concerns about TikTok’s privacy and security controls and practices.”For sure, the company dodged a bullet when it comes to Amazon. But it is unknown whether the e-commerce giant intends to resend a similar email on TikTok policy in the future; clearly, someone drafted something. And the government threats remain. Not only that: The prospect of a potential ban has brought widespread anxiety to the TikTok community. In recent days, many creators posted tearful “goodbye” videos, with some asking their viewers to follow their accounts on other platforms such as YouTube and Instagram. What has been a slow boil of troublesome developments risks cascading into a full-blown public relations crisis. Whether or not the security concerns are justified or the motivations political, TikTok can and should do a lot more to address them and take more control of the narrative. TikTok’s responses, thus far, have been low-key. The company has said it keeps its user data in the U.S. with backups in Singapore and has never provided data to the Chinese government. On Friday, in response to the initial Amazon news, it said in a statement that “user security is of the utmost importance” to TikTok, adding it hadn’t heard from Amazon about its concerns and looks forward to a “dialogue so we can address any issues” the tech giant may have. A more proactive response is in order, and here are some things TikTok can do. First, statements aren’t enough. Where is TikTok’s CEO? Earlier this year, ByteDance hired former Walt Disney Co. executive Kevin Mayer to head up TikTok. You’d think the veteran media executive would be the perfect ambassador to help tamp down concerns. He needs to get out there and explain TikTok’s side of the story, whether in interviews to print press or on TV. He should know the basics of crisis management and PR strategy, following his long tenure in the upper ranks of a U.S. entertainment giant.Second, the Wall Street Journal on Thursday said ByteDance was considering making changes to its corporate structure, including the creation of a new management board for TikTok or designating a new headquarters for the company outside of China. While it won’t make a huge difference as TikTok will be still owned by the China-based ByteDance, both are easy, low-hanging-fruit-type moves that would at least give the appearance of more autonomy. They should go ahead and announce the changes as soon as possible. It also wouldn’t hurt to remind the public of TikTok’s growing U.S. workforce.And finally, TikTok needs to forcefully defend itself against the Trump administration’s conjecture and allegations. Yes, it’s a bit of a tricky situation as any pushback can backfire if not done tactfully, but the company can’t afford not to respond. Further, it should hire an external, independent consulting firm to do a full security audit. Anything to assuage the security and privacy concerns would help as the pressure isn’t going away. Late Friday, Fox Business’s Charlie Gasparino reported the White House is looking at using the Committee on Foreign Investment review as possible way to ban TikTok by saying its prior acquisition of Musical.ly was illegal. ByteDance has been under review by the interagency committee in the U.S. for its 2017 purchase of the lip-synching startup.In many ways, TikTok’s situation is similar to the public relations frenzy over Zoom Video Communications Inc. in early April. At the time, the video-conferencing company — whose service had seen an unprecedented surge from business customers and other entities looking to connect under lockdown — faced an avalanche of scrutiny over its security and privacy practices, including its use of Chinese servers. In response, CEO Eric Yuan proactively made himself available for numerous media interviews and helped restore his company’s reputation. He conducted weekly webinars, hired security experts and did whatever it took to educate the public that fears concerning his company’s products were overblown and that Zoom had taken concrete steps to address the issues. The strategy appears to have worked, as Zoom has managed to both retain customers and attract more to its platform.TikTok should take note and do the same. Hunkering down and doing the bare minimum is not a great strategy.(The third paragraph of this column was updated to include information about Wells Fargo’s ban of the TikTok app on its employees’ work phones.)This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tae Kim is a Bloomberg Opinion columnist covering technology. He previously covered technology for Barron's, following an earlier career as an equity analyst.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Wall Street’s outlook for Facebook revenue has barely budged, even as 1,000 major advertisers pause their spending on the platform
The hope that technology would lower the cost of pay TV is long gone. The number of Americans subscribing to a live TV bundle has fallen to its lowest level since 1997.
(Bloomberg) -- Alphabet Inc.’s Google is changing its policies next month to restrict advertising for spyware and other unauthorized tracking technology.The change “will prohibit the promotion of products or services that are marketed or targeted with the express purpose of tracking or monitoring another person or their activities without their authorization,” according to the company.While ads for these products already violate Google’s Enabling Dishonest Behavior policy, the change will make the ban on tracking technology explicit and lead to increased enforcement, a company spokeswoman said.The policy will prohibit advertisements of spyware and malware “that can be used to monitor texts, phone calls, or browsing history,” according to Google. It will also ban ads for “GPS trackers specifically marketed to spy or track someone without their consent” and of cameras or recorders “marketed with the express purpose of spying.”The new policy will be implemented globally on Aug. 11, and the accounts of advertisers that violate it will be suspended, according to Google.(Updates with comments from Google spokeswoman in the third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Facebook Inc. is considering imposing a ban on political ads on its social network in the days leading up to the U.S. election in November, according to people familiar with the company’s thinking.The potential ban is still only being discussed and hasn’t yet been finalized, said the people, who asked not to be named talking about internal policies. A halt on ads could defend against misleading election-related content spreading as people prepare to vote. Still, there are concerns that an ad blackout may hurt “get out the vote” campaigns, or limit a candidate’s ability to respond widely to breaking news or new information.This would be a big change for Facebook, which has so far stuck to a policy of not fact-checking ads from politicians or their campaigns. That’s prompted criticism from lawmakers and advocates, who say the policy means ads on the platform can be used to spread lies and misinformation. Civil rights groups also argue the company doesn’t do enough to remove efforts to limit voter participation, and a recent audit found Facebook failed to enforce its own voter-suppression policies when it comes to posts from U.S. President Donald Trump.Facebook shares briefly dipped after Bloomberg‘s report, before recovering to close Friday at a record $245.07. Hundreds of advertisers are currently boycotting Facebook’s marketing products as part of a protest against its policies.Ad blackouts before elections are common in other parts of the world, including the U.K., where Facebook’s global head of policy, Nick Clegg, was once deputy prime minister. A Facebook spokesperson declined to comment.Facebook is an important platform for politicians, especially at a time when many people are stuck at home and campaign rallies pose potential health risks due to the coronavirus. In 2016, Trump used Facebook ads and the company’s targeting capabilities to reach millions of voters with tailored messaging, a strategy that some believe helped win him the election.Alex Stamos, Facebook’s former top security executive, said Friday that any political ad ban could benefit Trump. “Eliminating online political ads only benefits those with money, incumbency or the ability to get media coverage,” he tweeted. “Who does that sound like?”Democratic political operatives were quick to criticize the idea of a temporary ad blackout. Rob Flaherty, digital director for Democratic presidential candidate Joe Biden’s campaign, suggested the potential ad ban was not a sufficient solution to misinformation. “Under this proposal the President could use organic posts to suppress voting by mail (as he did today), but Democrats could not run ads encouraging people to return their mail ballots,” he tweeted.Nell Thomas, chief technology officer for the Democratic National Committee, was also skeptical. “We said it seven months ago to @Google and we will say it again to @Facebook,” she tweeted. “A blunt ads ban is not a real solution to disinformation on your platform.”Spokespeople for the Biden and Trump campaigns didn’t immediately respond to requests for comment, nor did a spokesperson for the Republican National Committee.Political advertising is a very small part of Facebook’s business. In the past 90 days, Trump and Biden have spent a combined $29.2 million on ads, according to the company’s self-reported data. In contrast, Facebook generated more than $17 billion in its latest quarter.Political advertising has been a complicated issue for online platforms, and many of them have taken different approaches. Twitter Inc. has banned most political ads, but still sells some “cause-based” ads that touch on economic, environmental or social issues. Google’s YouTube has already sold ad space on its homepage to the Trump campaign for the days leading up to November’s election -- a deal that ensures Trump will be highly visible on the video service when people start to vote.In 2016, Russian operatives used Facebook to spread misleading and divisive ads and posts. The company has made a series of changes since then to tighten up its political ad process, including the implementation of stricter requirements for buying marketing spots and the addition of a searchable ad archive.(Updates with comments from Biden digital director in the eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Google announced its plans to acquire Fitbit for $2.1 billion back in November. As of this writing, the deal has yet to go through, courtesy of all the usual regulatory scrutiny that occurs any time one large company buys another. Citing “people familiar with the matter,” Reuters notes that Google may be facing down some scrutiny in the form of an EU antitrust investigation if it doesn’t make some concessions.
Strong growth in several massive markets will help drive NVIDIA's (NASDAQ: NVDA) share price to $500. So says Rosenblatt Securities analyst Hans Mosesmann. On Friday, Mosesmann reiterated his buy rating on NVIDIA's stock and boosted his target price from $400 to $500.
Facebook (NASDAQ:FB) is one of the most resilient stocks out there right now. Despite the novel coronavirus and a series of boycotts by large advertisers, FB stock continues to chug higher.Source: Chinnapong / Shutterstock.com After a quick dip on the boycott news, shares hover just under all-time highs. A slight push higher could set this name up for another breakout.We already know Facebook dominates the social media space, with its legacy platform -- Facebook -- and with Instagram. Investors also know about the company's stellar balance sheet.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOverall, its financials are able to bail Facebook out. It has fat margins and huge cash flows, while its powerful balance sheet buys the company certainty amid uncertain times. But there is still risk. Boycotts Present a Problem for FB StockWhen the coronavirus hit, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Facebook and others were hit hard. That was on fear that the digital ad market would dry up, and to an extent, it did.Businesses pulled in the reigns on spending, hacking down marketing budgets and hitting pause until there was more clarity. Many will admit it was a tough period filled with question marks. To a large extent, the current environment still isn't a cake walk.However, when we heard from both management teams at Alphabet and Facebook, there was encouragement. While they remained cautious, they believed that ad spending had hit a trough, as spending started to come back to the platforms. Assuming that remains the case -- because the economy is moving forward and reopening has been underway for a while now -- then the ad dollars should still be flowing back to these mega platforms. * The 7 Best Stocks to Invest in Right Now Many saw this coming and it was well telegraphed by the companies. What many didn't see coming was the boycotts.When one's customers start boycotting one's platform due to the social climate of the country, that's not good. A business does not want a protest of its own products.While CEO Mark Zuckerberg expects the advertisers back "soon enough," I'm not so sure. Recent channel checks suggest the boycott could last through the election, not just through the month of July.The company's recent civil rights audit isn't helping matters, either.In all, the boycott totals almost 1,000 advertisers and includes big names like Honda (NYSE:HMC), Verizon (NYSE:VZ), Sony (NYSE:SNE), Microsoft (NASDAQ:MSFT), Starbucks (NASDAQ:SBUX) and others. Some, like Coca-Cola (NYSE:KO), are hitting pause across the board when it comes to social media. Picking Up the PiecesWill the boycotts ruin Facebook? Of course not. The company has an iron grip on the digital ad world and on the social media platforms. Given the economic climate, it may even be in the boycotting companies' best interests to pare back on marketing expenses in the first place.That said, after suffering a big drop at the end of Q1 and beginning of Q2 due to the coronavirus, absorbing another impact to revenue due to a boycott isn't good news in the short term.It may at least have investors thinking twice before buying FB stock up at all-time highs. It could, however, give investors a nice buying opportunity down the road.Keep in mind the company is still forecast to grow sales almost 10% this year, along with 12.5% earnings growth. In 2021, those estimates are forecast to accelerate, up to 25% and 34%, respectively.As of the most recent quarter, Facebook has no long-term debt and just over $60 billion in cash and short-term investors. However, the latter will take a small hit, as it invests more than $5 billion in Reliance Jio Platforms and agreed to a $5 billion settlement with the Federal Trade Commission.In other words, despite the ad-spending slowdown and the boycott, Facebook still holds an enviable financial position and is still expected to grow sales and profit this year. Bottom Line on Facebook Click to EnlargeSource: Chart courtesy of StockCharts.comAs always, I continue to like Facebook for its presence on the web and in our daily lives. However, there is risk with rising coronavirus cases in the U.S. and as corporations boycott the company.Should we get a dip, investors may look for a drop toward $200 and the 200-day moving average as a buying opportunity. Above the current all-time high at $247.65 and FB stock may run to the 138.2% extension, up near $257.50.Matthew McCall left Wall Street to actually help investors -- by getting them into the world's biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now. As of this writing, Matt did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Recent Boycotts Could Make Facebook Stock a Good Opportunity appeared first on InvestorPlace.
The SPDR S&P 500 ETF (NYSEARCA:SPY) is often highlighted for its status as the world's largest exchange-traded fund, but the SPY ETF has more to offer besides heft. At a time when some fund options are increasingly complicated, SPY's simplicity stands out.Source: Shutterstock Let's start with the basics. The SPY ETF comes with a modest fee of 0.0945% per year, or $9.45 on a $10,000 investment. As its name implies, it follows the S&P 500 -- one of the world's most widely observed equity benchmarks.To be precise, SPY holds 505 stocks, owing to multiple share classes for constituents such as Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) and a few others.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe S&P 500 is weighted by market capitalization, meaning the largest U.S.-based company by market value, currently Microsoft (NASDAQ:MSFT), is the largest component. Then it goes Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and so on down the line. Due to the ascent of Microsoft, Apple, Amazon and Alphabet into the $1-trillion club, SPY's top 10 holdings combine for roughly 29% of the fund's weight.That's near historical highs for the S&P 500. All About Market Cap WeightingAs the ETF industry has evolved, so has the way index providers weight equities within benchmarks. Now investors can get their hands on hundreds of ETFs that employ weighting methodologies such as equal weight, weighting by factors such as growth or value, and dividend yield. Some indices go even further, scoring stocks based on profitability, cash flow or management-related criteria.The selling point for many of these ETFs was borne out of the criticism of market capitalization weighting. Market cap weighting itself was largely borne out of the tech bubble of 2020. Critics assert that while cap weighting does represent the market's collective wisdom, the strategy can also lead late investors into overvalued stocks. * The 7 Best Stocks to Invest in Right Now Another frequently levied critique of cap-weighted strategies is that investors miss out on the benefits of the small size factor. Though more volatile, small-cap equities offer better rates of growth and historically outpace large-caps over long holding periods."Companies with smaller relative market caps, particularly firms that are of higher quality, have historically been associated with returns that beat a broad market index," according to Morningstar. Is SPY's Mega-Cap Status So Bad?The SPY isn't just a large-cap fund. It's well into mega-cap territory -- the weighted average market value of its holdings is $409 billion.That's not a knock on the SPY ETF. Rather, it's worth noting that cap-weighted indices and their corresponding funds are usually cost-efficient. Because of this, they're harder to beat."Market efficiency is often cited as a big reason why market-cap-weighted indexes, and low-cost funds that track them, are so notoriously difficult to beat. Any stock's price, and its corresponding weight, should incorporate all known information -- including its current value and expected return -- limiting the chance that anyone can gain an advantage."How does this translate to SPY's performance? Say the S&P 500 jumps 20% in a given year. That 20% will be the return SPY investors get, minus the fund's annual fee. The Bottom Line on the SPY ETFLike any fund that weights stocks by market capitalization, SPY is reactive. This means the weights assigned to rising stocks increase after the stock price increases. Conversely, faltering stocks are assigned lower weights as they decline, not in advance of that downside.So SPY isn't predictive. Not much in equity markets is. Still, the ETF does an efficient job of highlighting what's working today in equity markets. For example, technology stocks represent 27.5% of the fund's weight because investors have long favored that sector. On the other hand, financials are struggling this year. The sector entered 2020 as the third-largest exposure in SPY, but has since been relegated to the fifth spot.For alpha-hungry investors, augment a stake in SPY with growthier or riskier fare. However, for new investors or those that don't want to do a lot of leg work, the fund is a sensible option as a cornerstone portfolio holding.Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post The SPY ETF Proves Simpler Is Often Better appeared first on InvestorPlace.
Citigroup’s Jason Bazinet repeated his Buy rating on the e-commerce giant while boosting his price target to a Street-high $3,550, up from $2,700.
Investors with long-term time horizons would be smart to jump on the Microsoft (NASDAQ:MSFT) bandwagon. Why? MSFT stock is testing all-time highs.Source: NYCStock / Shutterstock.com MSFT stock is now sitting at $212 per share, just shy of its recent all-time high of $214.67. The stock has been galloping lately. Remember, at the beginning of June, shares were just above $180.Driven by a host of new products and dominance in the software and cloud computing spaces, MSFT stock climbed 11.1% in June. It's up 56% in the past 12 months and has risen almost 380% over the past five years. With multiple business lines that are both profitable and dominant, MSFT stock looks to have plenty of upside potential. Several analysts forecast Microsoft will reach $250 over the next year.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut is it too late to get in? No. Investors likely haven't missed the boat, but they should climb aboard before the stock gets any more expensive. A $2 Trillion Market Capitalization for MSFT Stock?Microsoft currently has a $1.6 trillion market capitalization. And, according to Wells Fargo Securities, the company has a good shot at being the first to cross the $2 trillion market cap threshold. In doing so, it would beat other technology giants such as Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) to that milestone.The main driver of Microsoft's growth is the company's Azure cloud computing business. Azure is fiercely competing with Amazon Web Services (AWS) and Alphabet's (NASDAQ:GOOG, NASDAQ:GOOGL) Cloud service. Yet Microsoft seems to be sprinting ahead in cloud computing. In its most recent quarter, Microsoft reported that its Azure revenues grew by 59% year-over-year. That makes it the fastest-growing company with cloud computing offerings. * The 7 Best Stocks to Invest in Right Now And there's no reason to expect that momentum to slow. Novel coronavirus lockdowns continue to drive demand for cloud storage and services.Many of Microsoft's other business lines have also benefited from the current work-from-home movement. Its Productivity and Business Processes segment has seen sales increases thanks to Office and Microsoft Dynamics. Microsoft has also been aggressively updating its Teams platform that enables organizations to work collaboratively while in disparate, remote locations. The Redmond, Washington-based company just unveiled a new "Together Mode" for Teams that places participants in a virtual amphitheater setting.Initial reviews of the "Together Mode" feature have been positive. And Microsoft is clearly aiming to become the preferred virtual meeting platform and take market share away from competitors such as Zoom (NASDAQ:ZM) and Slack Technologies (NYSE:WORK). Microsoft also owns Skype. Retail Stores and Video GamesLike all dominant companies, Microsoft is constantly changing and innovating. The company's research and development department employs 47,000 people. So, it should come as no surprise that Microsoft has been nimble and responsive to Covid-19. In addition to upgrading Teams and pushing sales of its personal computing products, Microsoft also announced at the end of June that it is permanently closing all 83 of its retail store locations. These stores have never been as popular as rival Apple's stores.The retail closures will result in a pre-tax charge of $450 million, or 5 cents per share. Microsoft will record this in the quarter ended June 30. However, long term, the store closures will enable Microsoft to further invest in its digital storefronts on Microsoft.com, as well as stores available through Xbox and Windows. Combined, these digital stores reach more than 1.2 billion people every month in 190 markets.Additionally, Microsoft continues to be a dominant player in console gaming. The latest console -- the Xbox Series X -- launches in time for this year's holiday sales season. The Xbox Series X will be backward compatible with games, controllers and other features of the Xbox One, which should help to encourage customers to make the switch and ensure a smooth transition to the new console.Microsoft is also looking to secure a strong line-up of game titles for its newest console. It's reportedly looking to buy video game maker Warner Brothers Interactive Entertainment. The $4 billion deal would provide Microsoft with a host of popular game properties, including Harry Potter, Batman, Mortal Kombat and LEGO. Microsoft has previously made acquisitions, such as Minecraft developer Mojang, to gain access to their properties.Regardless of whether Microsoft is able to purchase the game maker, the Xbox Series X should help drive sales well into 2021. The Bottom Line on MSFT StockMicrosoft is a leading technology company for a reason. It's actively involved in many of the biggest growth areas of tech right now -- from cloud computing and virtual meetings to artificial intelligence and gaming. Responsive and adaptable, Microsoft is always quick to capitalize on a new opportunity and take on its competitors. Such tactics should ensure that MSFT stock continues to rise higher in the foreseeable future.Accordingly, investors should view MSFT stock as a safe and reliable long-term holding -- one that is capable of providing consistent gains over an extended period of time.Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia. As of this writing, Joel Baglole held shares of MSFT and AAPL. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Buy Microsoft Stock for Long-Term Profits and Gains appeared first on InvestorPlace.
Ad buyers expect overall ad spend to decline about 20% in the second half of 2020, according to a survey from IAB last month. Traditional media will see a decline in ad spend, but most digital advertising channels will grow considerably in the second half of 2020. 59% of connected TV advertisers expect to increase their spend in the second half of the year, according to IAB's survey.
European regulators are reportedly looking for concessions before approving the $2.1 billion acquisition.
The acronym FANG refers to four high-growth internet stocks. (Sometimes they're called FAANG stocks.) Here's what investors should know about FANG stocks and why they might be worth a look.
Alibaba (NYSE:BABA) is a stock I have loved, and the recent price action has been rewarding for those who are long. Alibaba stock burst higher on July 8, rallying 9% to new all-time highs.Source: Kevin Chen Photography / Shutterstock.com The action comes after several strong days of gains, with BABA stock up 15% so far this week and almost 20% for the month of July. In short, this stock has been a monster and Ant Financial's potential IPO only makes it more attractive.Alibaba holds a 33% stake in Ant Financial, which is seeking an IPO in Hong Kong. The company is looking at a valuation of more than $200 billion, with plans to sell 5% to 10% of its shares.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt's not clear how much of its stake Alibaba may pare down in the offering. Whether it does or not though doesn't matter, as investors will want to see how Ant performs in the future.That is, if the stock appreciates, so too will Alibaba's stake. Sad as it may seem, many investors in Alibaba may have very well not even realized it has a stake in Ant Financial. That may help explain why shares rallied 9% on the day and gained momentum through the trading session, as they made this realization.Obviously the potential IPO won't happen overnight, but it should be viewed as a positive catalyst for Alibaba. For me, Alibaba's stake in Ant has been one of the reasons I'm bullish on BABA. Thankfully though, there are other reasons to consider a long position too. Valuing Alibaba StockOne of my favorite things above Alibaba is its underappreciated business. Not that Alibaba is really flying under the radar so to speak -- with its $668 billion market capitalization and huge rally over the past few weeks -- but it's not the size of Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and others.I have argued in the past that companies still churning out growth amid the novel coronavirus deserve a higher valuation. That's even more true for companies with robust growth. * The 7 Best Stocks to Invest in Right Now Consensus expectations call for more than $94 billion in sales this year. If hit, it will represent more than 30% revenue growth from fiscal 2020 (last year). Revenue growth of 20%-plus is expected to continue for the next few years, too.Alibaba has beat on earnings estimates for seven consecutive quarters. As it stands now, forecasts call for earnings of almost $9 per share this year. That leaves the stock trading at less than 29 times earnings. While not cheap by traditional measures, let's remember a few things.First, it holds the most dominant e-commerce position in China, a country that has a booming middle class and a population four times the size of the U.S. Second, it's diversifying into other revenue segments, like cloud computing and digital entertainment.Finally, it has better revenue growth and a lower price-earnings ratio than Apple, Amazon, Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).These other companies have great attributes too, but I feel that Alibaba stock doesn't get the same type of respect these other names do. It has solid, secular growth and a reasonable valuation. That's oftentimes a tough combination to find. Trading BABA Stock Click to EnlargeSource: Chart courtesy of StockCharts.comThe fundamentals and future catalysts check out, but what about the technicals?The biggest critique investors could have regarding the chart is that Alibaba stock has gone too far, too fast. On the week of July 5, the first full week of the month, shares burst through $230 resistance. This mark twice held shares in check, but finally gave way.After the Ant Financial news hit the wires, shares were able to push through the 123.6% and 138.2% extensions. With a close above the latter, it technically puts the 161.8% extension in play, up at $268.96.While the stock is starting to get extended, its overbought/oversold readings are not in extreme territory just yet. If Alibaba stock pulls back and moves below the 123.6% extension, it could fill the gap from July 8 and potentially retest $230. For long-term investors who missed the boat, this level could provide an excellent buying opportunity.Matthew McCall left Wall Street to actually help investors -- by getting them into the world's biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now. As of this writing, Matt did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Does Ant Financialas IPO Make Alibaba Stock a Buy Now? appeared first on InvestorPlace.
With market volatility picking up lately, it might seem like a good idea to hedge your portfolio against another downturn. But hedging strategies come at a price.
Surging tech stocks are hiding the opportunity in some beaten-down names, says Fundstrat's Tom Lee.
Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) subsidiary Google LLC may be able to ward off an antitrust investigation by the European Union into its acquisition of Fitbit Inc (NYSE: FIT) by promising not to use the smartwatch maker's health data to run targeted advertisements, Reuters reported Thursday. What Happened Google had agreed to purchase Fitbit for $2.1 billion, or $7.35 per share in cash, last November. The deal has been under fire from activists over privacy and anti-competition concerns.According to Reuters, Google may lessen fears of its competitors and privacy activists by issuing a binding pledge to the EU authorities, similar to the one it issued last year -- that is, not to use Fitbit's health data for its advertising service.The EU is scheduled to decide on the deal by July 20, and Google must offer any concessions by July 13, Reuters noted.Why It Matters If Google fails to provide such a pledge, it will face a four-month investigation at the end of the EU's preliminary review. The deal will allow Google to better compete with Apple Inc (NASDAQ: AAPL), Samsung Electronics Co Ltd (OTC: SSNLF), Huawei, and Xiaomi Corp (OTC: XIACF), all makers of smartwatches and fitness trackers. According to Reuters, Fitbit's share of the market stands at 3%, while the leader in the segment is Apple, with a 29.3% market share. Price Action On Thursday, Alphabet's Class A and C shares closed 1% higher at $1,518.66 and $1,510.99, respectively.Fitbit shares traded 1.34% higher at $6.80 in the after-hours session the same day, after closing the regular session 7.70% higher at $6.71.See more from Benzinga * Google Abandons Plans To Offer Its Cloud Initiative In China * Verizon's Decision To Halt Facebook Advertising Was Not Political, Says CEO * Hong Kong National Security Law Fallout: US Tech Companies To Decline Law Enforcement Requests(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Google can avoid an EU probe of its planned takeover of Fitbit. Reuters sources say Brussels would be satisfied with a pledge not to use Fitbit’s health data to target ads. The 2.1 billion dollar bid was announced last November. It would allow Google to take on Apple, Samsung and others in the fitness tracking and smartwatch market. But the plan has drawn heavy criticism from privacy advocates. They worry what Google would do with access to Fitbit’s trove of personal health data. Concerns too about competition. The European Commission is examining whether the takeover would cement Google’s dominance of online advertising. Sources say it’s set to trigger a four-month probe of the deal if Google doesn’t offer concessions by Monday (July 13). But they say the search giant could avert that by offering a binding pledge not to use health data for advertising. Google has dismissed all the concerns. It says the deal is about devices, not data, and will only boost competition. The smart wearables market is currently dominated by Apple, which has an almost 30 percent market share.
The U.S. will announce but suspend retaliatory measures for France's digital services tax, Trade Representative Robert Lighthizer said. "We're going to announce that we're going to be taking certain sanctions against France, suspending them like they're suspending collection of the taxes right now," Lighthizer said, according to Reuters. The U.S. says the French tax discriminates against companies such as Alphabet , Facebook and Apple .
According to a report in Politico, California has become the 49th state to launch an antitrust investigation into Google. California and Alabama were the only states that did not participate in an antitrust investigation by 48 states, Puerto Rico and the District of Columbia, that began in September and is focused on Google’s dominance in online advertising and search. It is still unclear on which aspects of Google’s business the reported California investigation will focus.
(Bloomberg Opinion) -- When you return to the gym, your workout will be noticeably different than before the coronavirus lockdown. Don’t plan on pumping iron for more than an hour, or taking a shower. And you can probably forget those trendy boxing classes that have you making contact with your fellow gym-goers.Welcome to the new world of fitness, which will be characterized by social distancing, obsessively wiping down equipment and, for those who don’t want to brave the gym, sessions with a virtual coach on a Peloton bike at home.The Covid-19 pandemic has hit something that we largely take for granted: our health. So people are now likely to spend even more of their incomes on well-being, including staying in shape. But with a plethora of choices, from Zoom yoga to ballet barre via Instagram Live, not all of this money may find its way into the traditional fitness sector.That is likely to lead to a shakeout of an industry that has seen the number of global facilities roughly double over the past 15 years. Many clubs could now close or shrink. Those best placed to survive are the trendy boutiques that can successfully pivot to providing digital content and the no-frills operators that can appeal to cash-strapped fitsters. Some fitness fans can’t wait to get back to the gym. For others, being in close proximity to other people engaging in sweaty exercise is the last place they will feel comfortable. And for now, workout chains remain closed in some parts of the U.S. Clubs in England will be able to open from July 25. Where gyms are trading, they’re limiting the number of people inside at any one time and offering “busyness trackers” on their apps, so customers can decide the best time to visit. At peak hours, people may be asked to book ahead of time, or keep their workouts to an hour. As for showers it’s a mixed picture, depending on particular clubs and locations. Many people are choosing to get changed at home anyway.For gyms, in addition to contending with costly measures to contain the spread of the virus and keep customers feeling safe, it’s a changing landscape in terms of where their customers are and what they may want.Because many fitness centers are located in business districts, there may be far less demand when they reopen as working from home becomes entrenched. Virgin Active, owned by investment holding company Brait SE, whose clubs are mostly in metropolitan areas, looks particularly exposed here. And the new routines people have embraced while at home may lend themselves to working out in one’s kitchen or bedroom, rather than going to the gym at all. Consequently, clubs could face a wave of cancellations.Already, months of closure and higher reopening costs have taken their toll. Bodybuilder favorite Gold’s Gym International Inc. and 24 Hour Fitness Worldwide Inc. have filed for bankruptcy protection. But it is not just the legacy gyms, already caught in the ultimate barbell economy between chic boutiques and budget operators, that are feeling the burn.The boutiques, such as those that specialize in cycling, yoga or Pilates, face unique and acute challenges. The economics of many of these businesses are built around cramming lots of class participants into a tiny space — the kind of set-up people are likely to want to avoid.These fitness outposts are experimenting with ways of hanging onto their members. In a particularly fanciful example, SoulCycle Inc. is offering some outdoor classes in the Hamptons this summer that cost $50 for a single class. In such a posh location, there may be plenty of takers, but that’s hardly a model that can be replicated across the country. And outdoor classes will lose their appeal in the dead of winter.That is why some gyms, both boutiques and big-box outlets, are turning to digital content. Yogaworks Inc., for example, is live-streaming more than 100 daily classes from teachers at their studios all over the U.S. If this becomes really popular, it’s not hard to imagine the company needing to upend its business model, perhaps by reducing its roster of instructors, closing underperforming brick-and-mortar studios and hiring more technologists.Going online is far from a sure bet. It’s a highly competitive space that includes everything from free workouts on YouTube to Nike Inc.’s activity app and subscription programs like Glo and Daily Burn. In the U.K. alone, David Minton of the Leisure Database Company said he counted more than 600 Instagram Live workout classes in one day.It also puts operators in more direct competition with trendy home-workout programs such as the Mirror, which was just acquired by yoga-wear maker Lululemon Athletica Inc. for $500 million, and Peloton Interactive Inc., which has seen such explosive demand for its stationary bikes that it paused advertising back in March while it moved to accelerate its supply chain.The budget sector, which has been booming on both sides of the Atlantic, is not immune to the new pressures either. It faces a future with higher hygiene-related costs, such as the more regular and intensive cleaning of equipment. These may be difficult to accommodate when clubs are typically charging only about 20 pounds ($25) a month. Even so, companies such as Planet Fitness Inc. in the U.S. and Basic-Fit NV in Europe, as well as U.K. operators The Gym Group Plc and Pure Gym Group Plc, are probably best placed. Their clubs tend to be large, and many are located in suburban areas. In some cases, members are younger, and so may be less cautious about coming back. Pure Gym found that when its clubs reopened in Switzerland, people under 30 were three times more likely to return than those over 50. Yes, some people may ditch their subscriptions as the hard economic impact of the lockdowns hits. But no-frills clubs may also benefit from cash-strapped fitness fans trading down.The result is that even the most nimble, well-situated competitors will have to work up more of a sweat to compete in the Covid-19 era. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The TikTok-tivists are at it again.Thousands of users of the popular video app flocked to the Apple App Store in the last few days to flood U.S. President Donald Trump’s 2020 campaign app with negative reviews. On Wednesday alone 700 negative reviews were left on the Official Trump 2020 app and 26 positive ones, according to tracking firm Sensor Tower.TikTok fans are retaliating for Trump’s threats to ban the app, which is owned by China’s Bytedance Ltd. and is hugely popular in the U.S., especially among teens. The thought of taking away a key social and entertainment hub in the midst of the Covid-19 pandemic has led to outrage.“For Gen Z and Millennials, TikTok is our clubhouse and Trump threatened it,” said Yori Blacc, a 19-year-old TikTok user in California who joined in the app protest. “If you’re going to mess with us, we will mess with you.”Blacc said the movement gained steam Wednesday when a popular TikTok user, DeJuan Booker, called on his 750,000 followers to seek revenge. He posted a step-by-step primer on how to degrade the app’s rating, notching 5.6 million views. “Gen Z don’t go down without a fight,” said Booker, who goes by @unusualbeing on TikTok. “Let’s go to war.”The Trump campaign said the effort hasn’t had any impact.“TikTok users don’t affect anything we do. What we do know is that the Chinese use TikTok to spy on its users,” said Tim Murtaugh, director of communications for the Trump Campaign. ByteDance has always denied such accusationsThe efforts to push the app low enough so that Apple will remove it from the app store may be misguided. Apple doesn’t delete apps based on their popularity. The App Store may review those that violate its guidelines or are outdated, but not if their ratings sink. A similar tactic was tried in April to protest Google Classroom by kids frustrated with quarantine home-schooling.But young people are looking for ways to make their voices heard, even if some of them can’t yet vote. Last month, many young people organized through TikTok to sign up to attend Trump’s first post-shutdown campaign rally in Tulsa, Oklahoma, but then didn’t show up. The Trump campaign denied the online organizing effort contributed to lower-than-expected attendance.Nearly 60% of Gen Zers are opposed to a TikTok ban, according to a survey conducted from Tuesday to Thursday of 2,200 adults by Morning Consult Brand Intelligence. Across all ages, about a third of Americans have never heard of TikTok, while a third have a favorable impression and a third have an unfavorable view of the app, the survey found.Apple didn’t immediately respond to a request for comment. TikTok experienced connectivity issues on Thursday, according to Downdector, which measures web traffic, but the company said it had resolved them later the same day.Trump’s re-election smartphone app is a big part of the president’s unrivaled digital operation and was meant to circumvent tech companies like Facebook Inc. and Twitter Inc. and give the campaign a direct line to supporters. The app has helped the campaign engage Trump’s die-hard supporters, especially in the midst of the coronavirus pandemic, by feeding them his latest tweets and promoting virtual events. Supporters can donate to the president’s campaign or earn rewards for recruiting friends like VIP seats to rallies or photos with the president.The Official Trump 2020 app has been downloaded more than 500,000 times on Google’s Android store as of June 15. Apple doesn’t publish information on downloads.Reviews with titles such as “Terrible App” or “Do Not Download!” have been flooding the App Store since late June. Official Trump 2020 now has more than 103,000 one-star reviews for an overall rating of 1.2.But the uptick of activity has also caused the app to rise in rankings. Users have to download the app to review it, vaulting it to second place on the Apple store from No. 486 on Tuesday, according to Sensor Tower.“Do I think that this is going to fundamentally change the election? No,” said Tim Lim, a veteran Democratic digital strategist. “But it goes to show that they are just as susceptible to these mass actions as anyone else. Trump is starting to see what it feels like to have a massive online army committed to defeating him.”Trump earlier this week said his administration is considering banning TikTok as one way to retaliate against China over its handling of the coronavirus. Trump’s comments came after Secretary of State Michael Pompeo told Americans not to download the app unless they want to see their private information fall into “the hands of the Chinese Communist Party.” Bytedance is also facing a U.S. national security review for its acquisition of startup Musical.ly. It has denied allegations that it poses a threat to U.S. national security.Trump didn’t offer specifics about a potential decision and Pompeo seemed to walk back the idea of a ban in a later statement, saying that the U.S. efforts to protect American consumers’ data don’t relate to any one particular company.Many TikTok users say they care less about potential Chinese snooping and more about Trump taking away their digital hangout. In the U.S., TikTok has been downloaded more than 165 million times, according to Sensor Tower.“I don’t believe Trump is trying to take TikTok away because of national security, but more to retaliate against activism on the app and all the videos about him that drag him through the mud,” said Darius Jackson, an 18-year-old TikTok user in Champaign, Illinois, who asked his followers Wednesday to give Trump’s app a one-star rating.“This is the first year I’ll be able to vote and I think activism on TikTok is going to make a big difference,” Jackson said.(Updates with Trump campaign response from sixth paragraph. A previous version of the story corrected the spelling of the Illinois city in the penultimate paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.