Social Media

It’s not so bad being a bubble stock after all

3 Aug 2022

GameStop, Microstrategy, AMC, and even Robinhood all attracted irrationally exuberant investors. Now an obscure Hong Kong company has caught a similar wind. Sure, the air has come out of most of the hype. But companies have ended up better off than they would have been otherwise.

Antitrust watchdogs go big on drama, light on plot

1 Aug 2022

Penguin’s merger with fellow publisher Simon & Schuster is going to trial; Facebook owner Meta faces a battle over its deal with a virtual fitness firm. Both cases test out new storylines crafted by the U.S. competition watchdogs. But by getting creative they risk missing meatier targets.

Hard tech fad leaves Chinese apps out in the cold

26 Jul 2022

Tencent-backed Soulgate is among the country's startups rushing to list in Hong Kong as investors pile into chips and robotics. Ballooning losses at the $2 bln social network will be a tough sell. For larger peers like TikTok-owner ByteDance, the clock to go public is ticking.

Tech investors may be overvaluing moats

25 Jul 2022

Meta and Netflix valuations have been pounded, but Microsoft and Apple are holding up, relatively speaking, partly because they are less vulnerable to competitors. The trouble is the latter two are now premium compared to historical prices, and their buffers aren’t unassailable.

Twitter-Musk divorce court favors the kids

19 Jul 2022

A Delaware judge set a speedier October trial for the deal fight with Tesla’s boss. That leans towards Twitter’s wishes, but only because Musk was asking for the house, the dog, and his in-law’s silver. A quick resolution is in everyone’s interest, but mostly shareholders’.

Elliott’s Pinterest vision board has Twitter pins

15 Jul 2022

The activist has a 9% stake in the $13 bln company after investing in its rival in March 2020, then stepping back a year later. Twitter’s returns while Elliott was active outperformed competitors. A similar outcome, including a sale, is possible but without the Elon Musk circus.

Twitter may be target for non-Musk deal

12 Jul 2022

The arrangement that the social media firm struck with Tesla’s boss for $54.20 a share was just too expensive – and with the wrong person. Based on its bankers’ own approach, the stock is worth closer to $32, and it’s near that price. Other private buyers might be interested.

Twitter shakes Musk down with Delaware muscle

11 Jul 2022

The social network has hired big legal guns to work through a case that would force Tesla’s boss to buy the firm. But Musk has inflicted damage since he offered $44 bln to buy the firm – then regret the deal. A lawsuit is the best way to induce him to pay more to back out.

Capital Calls: SoftBank Arm-twisting

22 Jun 2022

Concise views on global finance: The UK government may be eyeing desperate measures to keep SoftBank-owned chip group Arm's IPO in London.

ByteDance schools old order in new online moves

21 Jun 2022

E-commerce sales growth is slowing at big players like Alibaba and JD.com. TikTok’s parent, though, is benefitting from consumers spending more on entertainment and education. The meteoric rise of an online English-teaching venture hosted by its Douyin app is a case in point.

Facebook sans Sandberg is more vision than company

1 Jun 2022

While the social network had problems under its departing COO, it at least had a business model and a top-tier executive who could sell it to investors. Amid slowing ad sales and co-founder Mark Zuckerberg’s pivot to the metaverse, Sheryl Sandberg’s exit comes at a poor time.

Big Tech braces for bipartisan midterm punches

1 Jun 2022

Facebook and peers got a pass from the U.S. Supreme Court over a Texas social media law. But if Republicans win Congress in November, they will be deluged with hearings and subpoenas. Democratic critics already lead industry watchdogs. Strife comes from both sides of the aisle.

Snap! Elon Musk has another Twitter excuse

24 May 2022

The disappearing message app abruptly slashed its quarterly profit forecast, sending shares spiraling nearly 40%. That’s an ominous sign for Twitter, which like Snap, relies on brand advertisers. It also gives the Tesla boss another reason to bail on buying the social platform.

Musk’s get-out-of-Twitter card is worth $5 bln

20 May 2022

Their $44 bln deal looks shaky but both parties risk a protracted fight if they go to court. That would distract both Tesla and Twitter when neither company needs it. Instead, Elon Musk can free himself by paying a break fee plus some. And the social network could use the cash.

Deal odds in the face of market pain

19 May 2022

Market pain is changing the math for arbitrageurs, as targets' shares may drop further if mergers fail. A Breakingviews calculator shows the odds of a deal going through. Run the numbers here.

Market rout throws off math for open deals

18 May 2022

Unlike Twitter, whose shares dived on Elon Musk’s waning enthusiasm for his $44 bln offer, other stocks pending a deal are down on little news. Market pain changes the math for arbitrageurs as target shares may drop further if mergers fail. A Breakingviews calculator shows how.

Tencent gives China bulls little to run with

18 May 2022

The $450 bln video-games giant said sales stalled in the first quarter, below expectations. Despite signs Beijing may rein in tech crackdowns, the government’s Covid-19 lockdowns are creating more uncertainty. Investors hoping to ride out the volatility will get no such reprieve.

Twitter brinkmanship favors Musk exit for a price

13 May 2022

The Tesla boss is worried about well-known erroneous user figures. The company appears to be preparing a defense if it were to stay independent. Both parties need to act like they want a deal, and Twitter needs it more. But Musk can probably convince Twitter to call off the ball.

Twitter board is dangling over hot water

10 May 2022

The social media company’s directors did not conduct an auction to seek rival offers to Elon Musk’s $44 bln bid, and some have overlapping interests. That leaves them open to accusations of conflicts of interest. Whether the deal goes ahead or not, the board looks exposed.

Musk coinvestor roster underwhelms multiple ways

5 May 2022

Placing money alongside the world’s richest man should be an easy pitch. But tech heavyweights backing his $44 bln Twitter bid with $7 bln still leave a hole, and checks from smaller investors suggest he was scraping the barrel. It indicates skepticism about Musk’s latest idea.