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.
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.
Tesla, Inc. (TSLA) Shares Slump After Elon Musk’s Comments
Chief Executive Elon Musk’s warning on profit during a conference call with members of the media, which did not include Reuters, contrasted with Tesla’s statements last month that it was expecting a “very small” net profit in the first quarter.
Shares of Tesla, Inc. (TSLA)fell 3.4 percent after hours. Investors have voiced concerns about whether Tesla would be able to maintain profit margins through cost cutting – such as recent layoffs – as it reduces prices of its newest vehicle.
Still, the price drop could quell concerns from some analysts that demand for the higher-priced versions of the Model 3 was beginning to dry up in the United States, especially after a federal tax credit was cut in half this year.
“Tesla wants to drum up demand,” said Elazar Advisors’ Chaim Siegel. “There was a slowdown in the U.S. as the tax credits dropped. (There are) more tax credit hits later in the year too so they are trying to be proactive.”
Musk has often shared that his strategy for Tesla was to build higher-priced cars – the Model S and X – whose success would ultimately usher in a $35,000 mass-market car, followed by an SUV, the Model Y, which is currently in development. But customers who reserved the Model 3 at that lower price have waited nearly three years since Musk first promised it.
An online-only sales strategy, along with other changes, would allow vehicle prices to fall by about 6 percent on average, Tesla said in a blog on its website https://bit.ly/2IHjLw4. Over the next few months, Tesla will wind down “many” of its stores, while investing in its service system, it said.