Zoom available on Amazon TV, Meta makes a purchase and other notable stories from this week. Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.
TRUMP MEDIA PLATFORM UNDER DEVELOPMENT:
Former President Donald Trump told Fox News in an exclusive interview that his new media company will likely be up and running in the first quarter of 2022. The platform is currently “under development” and will be a way of “getting our voice out to a lot of people.” “I’d like to say the first quarter of this year coming up,” Trump said, when asked about a timeline. “We think we’ll be in great shape, and you know, it’s moving along very well, and we think we’re going to be in great shape.” The former president also commented on the current state of the media saying it is not a free press. “It’s very corrupt, and we have to be able to get our voice out and this will be a way of getting our voice out loud and clear,” Trump said. “I truly believe we have far more than 50% of the public of the people of this country—much more than 50%,” Trump said. “This is a way of getting a strong word out from a lot of different people who should be heard.” Trump Media & Technology Group has previously agreed to go public through a merger with Digital World Acquisition. (DWAC).
ZOOM ON FIRE TV:
Amazon (AMZN) said that Fire TV customers in the U.S. and Canada can now use Zoom (ZM) on their Fire TV Omni Series. “You can now start and join Zoom Meetings from the biggest screen in your home,” the company said in a blog post. Users need a Fire TV Omni Series of any size, Amazon noted. Users will need a compatible webcam that is 720–1080p. The TV microphone will need to be turned on and the Zoom app will only use audio from TV speakers as customers are not able to pair with a soundbar/speakers yet.
COVID DISRUPTS TECHNOLOGY SHOWCASE:
Amazon, Facebook (FB) parent Meta Platforms (MVRS), Twitter (TWTR), and Pinterest (PINS) are a few of the companies that will no longer be sending employees to the Consumer Electronics Show, or CES, in Las Vegas due to growing concerns over the omicron variant, Elizabeth Culliford and Sheila Dang of Reuters reported, citing comments made by the firms. Many of those companies are now looking into virtual ways to attend the showcase. The CES is an annual showcase of new gadgets and trends in the technology industry and, in the past, has attracted more than 180,000 people. While T-Mobile (TMUS) will still be sending employees to the event, most of its contingent will no longer be going and its chief executive officer will not deliver a keynote speech. Meanwhile, Qualcomm (QCOM), Sony Electronics (SONY), General Motors (GM) and Alphabet’s (GOOG;GOOGL) Google have said they intend to stick to their original plans to attend and show off new technology.
SMALLER VR HEADSETS:
Meta has acquired ImagineOptix, a North Carolina-based startup specializing in liquid crystal lenses, which could help reduce the size of VR headsets, The Information’s Mathew Olson reported. Olson says Meta “officially acknowledged” the deal following a write-up by optics analyst Karl Guttag on his personal blog, but terms haven’t been disclosed. he company makes thin, lightweight liquid crystal components that could be used in place of thicker lenses made of glass or plastic, which could both help reduce the size of VR headsets and allow for optical elements that can electronically change focus.
TAKING AIM AT SURVEILLANCE-FOR-HIRE:
Meta said it is taking action against the surveillance-for-hire industry. As a result of a months-long investigation, Meta said it took action against seven different surveillance-for-hire entities. They provided services across all three phases of the surveillance chain to indiscriminately target people in over 100 countries on behalf of their clients. These providers are based in China, Israel, India, and North Macedonia. “The “surveillance-for-hire” entities we removed violated multiple Community Standards and Terms of Service,” the company said. “Given the severity of their violations, we have banned them from our services. To help disrupt these activities, we blocked related internet infrastructure and issued Cease and Desist letters, putting them on notice that their targeting of people has no place on our platform. We also shared our findings with security researchers, other platforms, and policymakers so they can take appropriate action. We alerted around 50,000 people who we believe were targeted by these malicious activities worldwide, using the system we launched in 2015. We recently updated it to provide people with more granular details about the nature of targeting we detect, in line with the surveillance chain phases framework we shared above.”
Citi analyst Jason Bazinet lowered the firm’s price target on Pinterest and reiterated a Neutral rating on the shares. The analyst reduced the company’s multiple better reflect its growth prospects relative to its social media peer group.
Loop Capital analyst Alan Gould lowered the firm’s price target on Snap (SNAP) but maintained a Buy rating on the shares. The company has been one of the most innovative and fastest growing digital platforms, but it was also more impacted by the Apple IDFA changes than anticipated, which resulted in a rare revenue miss last quarter, the analyst tells investors in a research note. Gould adds that consensus estimates have already discounted Snap’s multi-year 50% revenue growth target provided earlier this year.
Gould lowered the firm’s price target on Twitter but kept a Buy rating on the shares. The analyst states that not many investors see potential for the company to generate 25% topline growth, raising an “unanswerable question” on margin outlook and overhang for the stock after Twitter indicated that expenses will grow beyond the 25% floor already in place with existing programs. Gould adds that achieving Twitter management’s 315M DUA target for 2023 seems “aggressive”, and the sell-side is already 7% below this goal.
Loop Capital analyst Rob Sanderson lowered the firm’s price target on Pinterest but reiterated a Buy rating on the shares. The stock will remain challenging in the near- term as investors focus on “sluggish” MAU growth and execution risk as the network becomes more creator-driven and video-rich, the analyst tells investors in a research note. Sanderson adds however that MAU growth at Pinterest will normalize in the New Year, and he will look to notifications and marketing to help drive its recovery.
Loop Capital analyst Alan Gould lowered the firm’s price target on Meta but kept a Buy rating on the shares. The magnitude of the company’s spending on the Metaverse over the next several years and how rapidly the spending at Facebook Reality Labs will increase from the $10B billion being spent in 2021 will be a key focus for investors, the analyst tells investors in a research note. Gould adds however that the negative reputational issues of Meta are already discounted in the stock at current levels, and he believes that the shares already trade at an “undemanding valuation.”
Goldman Sachs analyst Kash Rangan initiated coverage of Zoom Video with a Neutral rating. The analyst launched coverage on the communication and collaboration segment with a positive sector view. The 2020 cloud total addressable market of $19B implies a cloud penetration at 7% in 2020, which should increase to 29% in 2025, Rangan told investors in a research note. Zoom Video is one of the few software companies to succeed in both the enterprise and consumer markets, but the company is now facing tough compares, says the analyst.
Originally Posted on December 22, 2021 – #SocialStocks: Trump Targets Q1 Of FY22 For Social Media Company Launch
Disclosure: Interactive Brokers
Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from The Fly and is being posted with permission from The Fly. The views expressed in this material are solely those of the author and/or The Fly and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.
Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.