Social networking giant Facebook Inc(NASDAQ:FB) would be shutting down controversial ad feature which led the firm to a legal tangle over privacy issues.
The program that is called Sponsored Stories would be shut down on April 9. Users who do not wish to have pictures or names utilised in ads would find the change quite cosmetic.
Launched by Facebook in 2011, the program was intended to create social endorsement for ads.
In case a Facebook user liked a particular product or managed to check in to a restaurant, the action would be appearing as advertisement in friends’ Facebook news feeds.
The feature led to filing of lawsuit alleging the firm of violating privacy rights of minors through publishing of likes as well as profile pictures in ads without consent.
The U.S. district judge finally settled the case for $20 million to be paid by the firm.
A reason for high valuation for Twitter Inc(NYSE:TWTR) is the growth aspect. Most analysts estimate that the company revenues would be growing at about 70% CAGR from 2013 through 2015 whereas Twitter’s EBITDA would grow at 150% CAGR over the next two years. But, the error to these estimates may be huge considering the firm’s short history.
At the moment, the microblogging giant is trading at roughly 22x 2015 revenue and 121x 2015 EBITDA. This is against social networking giant Facebook that is trading at 10x 2015 revenue and 18x 2015 EBITDA.
The present userbase of the company is about 230 million vis-a-vis total internet users of 2.4 billion. This indicates huge opportunity for growth as also the number of internet users would grow to 3.5 billion in 2017.
On the other hand, Facebook has about 1.2 billion monthly active users, which is about 50% of all Internet users.
Besides this, the Smartphone usage would grow to 3.7 billion in 2017. Twitter’s short format is very well suited for smartphones and this may lead to the company capturing huge chunk of the smartphone user market.
Twitter is also increasingly becoming a source for user engagement on mobile as users are turning to the platform as a source of real-time information tailored to individual interests.
The firm’s revenues may improve through targeted ads, i.e based on demographics as well as user interest.
Although the firm has many avenues for growth but it would largely depend on how well its management executes various opportunities available.
Top 3 Gainers: Zynga (NASDAQ:ZNGA), Eros International (NYSE:EROS), Borqs Technologies’ (BRQS)
Zynga (NASDAQ:ZNGA) is up 2.5% after Benchmark reiterated its Buy rating in a look-ahead at Q2 earnings. The firm’s expecting a beat and solid guidance for Q3, and it’s raising its guidance for the fiscal year.
Tailwinds from the pandemic won’t dissipate easily, Benchmark suggests, and the videogame maker’s acquisition of Peak (and with it new “forever franchises” in Toon Blast and Toy Blast) will drive audience, bookings, margins and free cash flow, it says. The firm has an $11 price target, now implying 14% upside.
Eros International (NYSE:EROS) is up 5.8% today, making up the last week’s lost ground, after news that its streaming service Eros Now is partnering with Sony India (SNE +2.3%).
That will mean Eros Now’s app is pre-installed on selected Sony smart televisions in India, along with availability on a large base of existing models (Bravia E series and newer).
The country over the past year has seen a 25% growth in demand for smart TVs, fueled by overall industry growth of 15%, to a record 15M units/year.
Borqs Technologies’ (BRQS) personal safety tracker sees strong market with increased orders from the electronics retail chain in the US.
The boost in product demand comes ahead coronavirus pandemic that provides company to expect delivery of 250K units this year. It reflects over 3x the volume delivered in 2019, the year of its launch.
Borqs’ mobile personal safety devices designed particularly for senior citizens come with panic button, location tracking, and fall detection.
Tesla, Inc. (TSLA): US agencies investigate fatal Tesla Model 3 crash in Florida
American safety officials are looking into the circumstances surrounding another fatal Tesla, Inc. (TSLA) crash. Both the NTSB and the NHTSA have confirmed that they’re investigating a collision between a Model 3 and a semi truck in Delray Beach, Florida on March 1st. According to the police report, the truck was turning left to enter a main thoroughfare when the Model 3 crashed into the semi’s trailer, shearing off the car’s roof and killing the driver. It’s not certain if Autopilot was active, although the Model 3 kept traveling for more than 500 yards before coming to a stop.
Tesla said in a statement that it was “deeply saddened” about the collision and was “reaching out” to authorities to cooperate. The NTSB added that it typically takes one to two years to complete investigations like this.
This certainly isn’t the first time US safety agencies have investigated Tesla crashes to determine the possible role of Autopilot. However, there are unusually close parallels to a deadly incident from May 2016, when a Model S driver in Florida struck a trailer. His vehicle had Autopilot engaged and also kept going a significant distance after the crash, although investigators cleared Tesla and noted that the driver in that case ignored safety warnings. While the particular circumstances are different, it wouldn’t be out of the question for agents to compare the two cases.
Amazon (NASDAQ:AMZN), Qualcomm (NASDAQ:QCOM) Are In News On Monday
Evercore raises its Amazon (NASDAQ:AMZN) price target from $1,800 to $1,965 saying that gross profit has become a “more important indicator” than Y/Y revenue growth.
Key quote: “As such, we remain bullish on AMZN at least in part because the company’s gross profit is expected to grow ~400bps faster than revenue for AMZN over the next 3 years.”
Amazon shares are up 0.9% pre-market to $1,686.
Qualcomm (NASDAQ:QCOM) alleges in a San Diego federal court that Apple (NASDAQ:AAPL) violated three of its patents and asks for tens of millions of dollars in damages.
Qualcomm has filed a series of patent actions against Apple around the world that will conclude before the antitrust trial starting in April, which will hear Apple’s challenge to QCOM’s business model.
U.S. District Judge Dana Sabraw will open an eight-day trial today deciding whether Apple violated Qualcomm’s patents with its iPhones that contain Intel (NASDAQ:INTC) chips.
Qualcomm shares are up 0.8% pre-market to $54.65.
Apple shares are up 0.5% to $175.88.