Internet

Reddit looks awkward in its new business suit

21 Mar 2024

Going public at a hefty $6.4 bln shows investors think the social media site can turn a profit. But Reddit still looks a poor fit for public markets given its reliance on moderators who manage its forums for free. Their interests are at odds with advertisers and shareholders.

Swisscom’s Italy foray works best as a first step

15 Mar 2024

The $30 bln Alpine telco predicts 600 mln euros of annual savings from its 8 bln euro Vodafone Italia buy. Yet investors don’t yet seem to be assuming a big windfall. Revamping mobile services in the highly competitive Italian market to drive returns requires further M&A.

Reddit Google searches ‘how to make money’

12 Mar 2024

The social media firm’s rapid top-line growth suggests it’s attracting ad dollars. But Reddit’s reliance on search engines like Google to attract viewers is a risk. Roughly three-fourths of its new users come through search. Monetizing them keeps the platform on a cost treadmill.

Time continues to be on TikTok’s side

12 Mar 2024

A US bill that would force the social media app’s parent ByteDance to sell the platform is gaining ground. Demands are like those made years ago, only the app is now more powerful, the relationship with China more complicated, and politicians less willing to compromise.

Liberty Global’s buyback has grounds to go large

8 Mar 2024

Shares in the $7 bln telco conglomerate are down 12% since it announced a restructuring of its scattered units last month. After flagging new buybacks for 10% of the stock, CEO Mike Fries joked he was taking the group private very slowly. Maybe he should – but fast.

JD gives China bargain hunters glimmer of hope

7 Mar 2024

The $36 bln retailer improved quarterly sales and profitability and is boosting dividends and buybacks. It's nothing spectacular, but JD's beaten-down shares rallied 16%. Amid geopolitics, China's economic woes and rock-bottom valuations, getting back to basics can pay off.

Stolen razors are least of US drugstores’ concerns

1 Mar 2024

Walgreens and CVS have locked up items from deodorant to toothpaste. But a hyper-focus on theft is a reflection of drugstores’ more dire straits. Online competition, labor issues, and inflation are cutting into margins. Larceny is just the thing that pharmacies can control.

European telcos’ new deal hopes face reality check

1 Mar 2024

Executives gathered in Barcelona this week to plead for lighter regulation, cheaper spectrum and some financial help. Policymakers are unlikely to agree. Deutsche Telekom, Telefónica and others will have to convince investors that future growth requires more investment today.

Disney gets second mouse role in Reliance show

29 Feb 2024

The duo are merging their Indian TV and streaming assets into a $8.5 bln joint venture. It's a welcome end to an unnecessary distraction for Disney boss Bob Iger. After forcing the US firm into missteps, Mukesh Ambani's Reliance is winning control of a powerful entity at a steal.

Capital Calls: Charter and Altice

27 Feb 2024

Concise views on global finance: Tying up Charter, the cable giant backed by the media mogul, with rival Altice USA would form the country’s largest broadband player. That isn’t worth bearing the burden of regulatory hurdles, Altice’s mountain of debt, or its over-rich valuation.

Reddit loves users, so it’s giving itself a deal

26 Feb 2024

The social media firm plans to reserve IPO shares for loyal visitors, a tactic enlisted by the maker of Sam Adams beer and trading firm Robinhood. So-called “affinity programs” are risky, as Robinhood’s 2021 offering shows. But it may help Reddit get the valuation it wants.

Alibaba is the ultimate contrarian China bet

21 Feb 2024

The $188 bln e-commerce group was once emblematic of the country’s growth and tech innovation. But over-expansion, regulatory crackdowns, and slowing consumption are forcing CEO Eddie Wu to perform a hard reset. Winning back investors requires Beijing to correct course too.

PayPal’s new boss risks meeting his low targets

8 Feb 2024

Alex Chriss is spending on innovations like faster check-out in the hope of reanimating the $62 bln payment firm’s valuation, but warns they won’t add profit soon. That sounds like modesty. As rivals like Apple march ahead, the danger is that his lowball forecasts come true.

Meta enters the dividend multiverse of madness

8 Feb 2024

The first payout from Facebook’s owner is a small $5 bln sign of financial restraint. Benefits from regularly returning cash to shareholders, however, are about as tangible as the metaverse. Zeal for dividends simply perpetuates inefficiency and irrationality in markets.

Investors will say “OK Boomer” to aging Reddit

7 Feb 2024

The 19-year-old tech firm can justify a $5 bln IPO valuation based on a familiar but flawed revenue multiple. But as Snap shows, a lack of profit portends a shaky business model. Facebook parent Meta shows the benefits of listing on a stronger foundation. Reddit is no different.

Apple’s AI absence may be its advantage

1 Feb 2024

Microsoft and Alphabet pepper quarterly results with the promise of artificial intelligence. The $2.9 trln Apple barely mentions it. The risk is a giant missed opportunity. But its gadgets may indirectly benefit, and without the ballooning capital expenditure at peers like Meta.

Alphabet may envy Microsoft’s AI Midas touch

31 Jan 2024

Massive expectations of how artificial intelligence will reshape technology have boosted both companies’ valuations. But comparing their latest results suggests the $3 trln software firm run by Satya Nadella is moving quicker and more decisively to turn its bets into gold.

Amazon’s investors can chill with M&A freeze

29 Jan 2024

The e-commerce giant scrapped a $1.4 bln deal for Roomba maker iRobot after regulatory opposition that suggests future deals, no matter how small, will be seen as problematic. Given Amazon’s track record with past tie-ups like Whole Foods, though, some restraint could be welcome.

Venture capital’s facelift shows modest scars

24 Jan 2024

Growth-company investors are paying higher prices, new data suggests, even if dealmaking overall is still muted. Interest is shifting to areas like AI and manufacturing. The result is a new look for the recovering startup ecosystem, albeit with a little less youthful vigor.

Netflix investors won’t let it off the treadmill

23 Jan 2024

While other companies are focused on profit, Netflix's stock rose 8% on Tuesday after it reported strong quarterly net subscriber additions. Including live wrestling matches and ad packages help fuel its growth but at some point, Netflix will run out of breath.