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- JayweiJaywei
  ·2021-09-20
  Good luck
  Snapchat: Initiating Coverage With "Buy" - Is SNAP The Next Trillion-Dollar Company?
  Written by AlphaTech Equities Summary We initiate coverage of SNAP with A “Buy” rating and price ta
  Snapchat: Initiating Coverage With "Buy" - Is SNAP The Next Trillion-Dollar Company?
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- JayweiJaywei
  ·2021-09-20
  Some?
  Some China concepts stocks fell in premarket trading
  (Sept 20) Some China concepts stocks fell in premarket trading.
  Some China concepts stocks fell in premarket trading
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- JayweiJaywei
  ·2021-09-10
  $ARK Innovation ETF(ARKK)$Dip wru
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- JayweiJaywei
  ·2021-09-07
  $ARK Innovation ETF(ARKK)$Let’s go
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- JayweiJaywei
  ·2021-08-11
  Nice comment
  3 Tech Stocks That Turned $10,000 Into Over $500,000
  These high-growth tech stocks generated massive multibagger gains.
  3 Tech Stocks That Turned $10,000 Into Over $500,000
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- JayweiJaywei
  ·2021-08-03
  Chicken genius
  Using Options To Create A 10% Synthetic 'Dividend' On Tesla Stock
  If Tesla stock stays above 450 then I achieve a 10.14% per annum return when the put expires worthless.
  Using Options To Create A 10% Synthetic 'Dividend' On Tesla Stock
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- JayweiJaywei
  ·2021-07-31
  Ok
  Antitrust Activists Want to Go Full Throttle. Here’s a Lesson They Should Consider First
  About the author: Thomas W. Hazlett is H.H. Macaulay endowed professor of economics at Clemson Unive
  Antitrust Activists Want to Go Full Throttle. Here’s a Lesson They Should Consider First
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- JayweiJaywei
  ·2021-07-29
  $Pinduoduo Inc.(PDD)$Good good gogoo
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- JayweiJaywei
  ·2021-07-28
  $Tiger Brokers(TIGR)$Let’s go ?
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- JayweiJaywei
  ·2021-07-20
  $SoFi Technologies Inc.(SOFI)$Like and comment
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luck&nbsp;","listText":"Good luck&nbsp;","text":"Good luck","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/860971729","repostId":"1134680528","repostType":4,"repost":{"id":"1134680528","kind":"news","pubTimestamp":1632123900,"share":"https://ttm.financial/m/news/1134680528?lang=&edition=fundamental","pubTime":"2021-09-20 15:45","market":"us","language":"en","title":"Snapchat: Initiating Coverage With \"Buy\" - Is SNAP The Next Trillion-Dollar Company?","url":"https://stock-news.laohu8.com/highlight/detail?id=1134680528","media":"Seeking Alpha","summary":"Written by AlphaTech Equities\nSummary\n\nWe initiate coverage of SNAP with A “Buy” rating and price ta","content":"<p>Written by&nbsp;AlphaTech Equities</p>\n<p><b>Summary</b></p>\n<ul>\n <li>We initiate coverage of SNAP with A “Buy” rating and price target of $102, imputing an upside of 42.2% from its current share price.</li>\n <li>We see a long runway for monetization growth for SNAP driven by its recent successful investments in improving ROI for advertisers.</li>\n <li>With 293m users worldwide, representing only a 4.7% penetration of global smartphone users vs 30.7% for Facebook, we see ample headroom for SNAP to grow its user base.</li>\n <li>We see management’s multi-year revenue growth CAGR target of 50% as achievable driven by its recent prescient investments in accelerating ROI for advertisers.</li>\n <li>However, we suggest closely monitoring the risk posed by the latest iOS 14 IDFA update which constrains&nbsp;advertising platforms such as SNAP&nbsp;to track and retarget iOS users, waning ROI for advertisers.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9d23140ca873324c623450139adf2e2a\" tg-width=\"1536\" tg-height=\"1152\" referrerpolicy=\"no-referrer\"><span>NYCstock/iStock Editorial via Getty Images</span></p>\n<p><b>Investment thesis: When the innovation factory gets its growth playbook right - initiating coverage at \"buy\"</b></p>\n<p>We see Snapchat(SNAP)as a leading innovation factory in the social media space, benefitting from best-in-class growth profile, a large and sizeable TAM, strong industry positioning, and prescient co-founders, spearheaded by CEO Evan Spiegel and CTO Bobby Murphy. Even though a challenger to Facebook(NASDAQ:FB), SNAP has a strong track record of successful innovations, showcasing multiple successful product introductions which now mostly have all been encroached upon by rivals such as its disappearing messages, Stories, vertical video format and AR lenses to list just a few.</p>\n<p>Given its strong focus on privacy and limited quantum of personal information, users were willing to share on its platform, investors wereskepticalof SNAP’s monetisation capabilities vs Facebook in the past. However, a range of successful investments to improve ad targeting and ad measurement capabilities in the last two years, coupled with the restructuring of its sales team to focus on becoming sector specialists (away from being regional specialists) has seen SNAP increase advertisers ROI on its platform. This in turn has resulted in accelerating its own eCPM (revenue per impression) by 50% to 100% over the past year and powered revenue growth which has climbed @45.7% CAGR over the past two years to 2020.</p>\n<p>We see increased recent investments mostly to grow its vertical focused sales team and continued innovation, especially that in AR with the aim of increasing engagement of users, ultimately improving ROI for advertisers as both, commendable and disciplined. We see management forecasts of 50% revenue growth over the next three to five-year cycle as achievable given that monetisation (SNAP ARPU @$10 vs $32 for FB) remains relatively in early stages. After SNAP turned adjusted EBITDA positive in Q3 of 2020, we see a clear path to profitability corroborated by the high operating leverage inherent in social media platform businesses.</p>\n<p>However, SNAP does not come without its risks, as we see the recent introduction of iOS 14 software update, limiting advertisers' ability to track, retarget and measure ads displayed to Apple(NASDAQ:AAPL)users as especially disconcerting. Majority of SNAP’s revenue is still generated in the US, which is led by the Apple user base (54.4%market share of smartphones). We believe the next two quarters will be the high noon for SNAP’s long-term growth trajectory as the impact of the iOS 14 update becomes clearer on its earnings.</p>\n<p>Even though valuations are pricey, we believe the premium is warranted, emblematic of strong recent execution and best of breed growth profile. We see EV/REV of 25x 2022E Revenue as fair and see management outdoing its own bullish revenue growth expectation of CAGR @50% over the next three- to five-year cycle. This confers us a fair value of $102, imputing an upside of 42% from its current share price. We initiate coverage on SNAP at “Buy”</p>\n<p><b>Ongoing penetration of smartphone users on the back of the relaunch of its Android version will drive DAU growth for SNAP</b></p>\n<p>After a blip in SNAP's DAU growth in 2018 where the growth stalled due to a technical glitch in its platform, SNAP’s DAUs have increased at an average CAGR of 20% over the past two and half years to reach 293m users in Q2 2021. We see global DAUs increasing at 11.6% CAGR over the next three years driven primarily by:</p>\n<p><b>1. Relaunch of its Android version in Q1 2019:</b>In Q1 2021, management reported that its total number of android users had surpassed that of iOS, speaking volumes of the quality of its relaunch just two years ago. Previously management had confirmed performance issues in its app in 2018 on android phones which have now been completely resolved.</p>\n<p><b>2. Localizing content and language:</b>SNAP continues to invest in expanding its team to support its global community, including investing in region-specific performance improvements of its services, increasing localization of content, improving its creative tools, and offering more language support to its global community outside the United States. A case in point being SNAP’s launch of its first local-market Snap Original in March 2021 with Phone Swap India.</p>\n<p><b>3. Marketing:</b>Furthermore, it’s broadening its sales efforts and supplier partnerships to drive growth in new geographies where management is seeing increasing traction with users.</p>\n<p><b>4. Augmented Reality:</b>Another key accelerant for SNAP is its ongoing investment and progress/popularity of its Augmented Reality products/services. We believe SNAP has become the leading AR social media platform and continues to execute well on unlocking the significant multi-billion-dollar opportunity inherent in the e-commerce industry.</p>\n<p>Despite clocking an impressive growth in DAUs (Daily active users) over the past few years (Figure 1), SNAP’s penetration of the global smartphone user base at 4.7% is relatively in its nascence. SNAP's penetration is significantly lower than larger rivals such as Facebook @30.7% (Figure 2), albeit werecognizethat SNAP’s target age group (16–39-year-olds) is significantly narrower than that of Facebook. In our model, we forecast this to climb to 6.4% by 2026.</p>\n<p>Figure 1: SNAP’s Global DAU (M)</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d085771715b83e0b27cc681c7a5a4977\" tg-width=\"442\" tg-height=\"261\" referrerpolicy=\"no-referrer\"><span>Source: SNAP Company Filings</span></p>\n<p>Figure 2: Penetration of SNAP DAUs of global smartphones vs Facebook</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0a57f9f3fce44c19a6fa6a04a130a46b\" tg-width=\"398\" tg-height=\"226\" referrerpolicy=\"no-referrer\"><span>Source: SNAP Company Filings</span></p>\n<p>Note: Q2 CAGR is for half year 2021 only</p>\n<p>In North America, SNAP had 95m users in Q2 2021, growing at 7.1% CAGR from the beginning of 2018. This represents a 32.1% penetration of all smartphone users in North America. Facebook's DAU penetration of North American smartphone users currently stands @66%. We expect DAU's to continue to increase in the mid-single digits for SNAP in North America even after the pandemic as reopening of economies will lead to people going out more and expanding their social graph.</p>\n<p><b>Snapchat has 95m users in North America or 3.3% of total smartphones users</b></p>\n<p><b>Figure 3:</b>North America DAU (M)</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4c118ad2cdb177cdecacf90188e327ee\" tg-width=\"435\" tg-height=\"250\" referrerpolicy=\"no-referrer\"><span>Source: Snap Inc.</span></p>\n<p><b>Figure 4:</b>Penetration of DAUs in N. America</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/877258d88c261b7ce135656bb46278b4\" tg-width=\"424\" tg-height=\"240\" referrerpolicy=\"no-referrer\"><span>Source: Snap Inc.</span></p>\n<p>Note: Q2 CAGR is for half year 2021 only</p>\n<p>In Europe, SNAP had 78m users in Q2 2021 growing at 11.1% CAGR from the beginning of 2018. According to our analysis, this represents c.12 to 18% penetration of all mobile subscribers in Europe. We expect DAUs to continue to increase in the mid-single digits for SNAP in Europe driven primarily by SNAP dedicating investments to increasingly localize content and add more language support.</p>\n<p><b>Snapchat has 78m users in Europe</b></p>\n<p><b>Figure 5:</b>Europe DAU (M)</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0015cb6b39d9fa81d99c88a1c1d96115\" tg-width=\"414\" tg-height=\"253\" referrerpolicy=\"no-referrer\"><span>Source: Snap Inc.Note: Q2 CAGR is for half year 2021 only</span></p>\n<p>In ROTW, SNAP had 120m users in Q2 2021 growing at 45.5% CAGR from the beginning of 2018. We expect DAUs to continue to increase in the mid-single digits for SNAP in the ROTW, driven primarily by investments in localising content and language, adding new marketing partners and increasing uptake of AR lenses added by its global community.</p>\n<p><b>Snapchat has 120m users in ROTW</b></p>\n<p><b>Figure 6:</b>ROTW DAU (M)</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4d21d95c3d76addb94be8c8641691653\" tg-width=\"407\" tg-height=\"253\" referrerpolicy=\"no-referrer\"><span>Source: Snap Inc.Note: Q2 CAGR is for half year 2021 only</span></p>\n<p><b>Revenue per user is SNAP’s most significant lever of growth</b></p>\n<p>Despite a 2020 penetration rate of 31.3% of total users in the US, SNAP represented only 3.9% of total US social media advertisement spend. Its penetration of users in the US is especially low when compared to Facebook, (albeit we recognize SNAP's younger audience bias narrows its relative acreage vs its bigger rival). This highlights the long runway of growth for the company, as they begin to improve ROI for advertisers driving higher monetisation.</p>\n<p><b>Figure 7:</b>Facebook vs SNAP DAU's and ARPU</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f2a5b8d9ad68ee1592566eb68de5b499\" tg-width=\"566\" tg-height=\"332\" referrerpolicy=\"no-referrer\"><span>Source: SNAP and Facebook company filings</span></p>\n<p>Revenue per user has been SNAP’s biggest growth driver over the past couple of years driven primarily by…</p>\n<ol>\n <li>Restructuring its sales team to be vertical focused</li>\n <li>Recent investments in increasing ROI have paid rich dividends</li>\n <li>Video advertising</li>\n <li>Replicating successful US playbook in other markets</li>\n <li>AR impact on E-commerce – as management continues to execute well on unlocking the multi-billion-dollar apparel and clothing opportunity.</li>\n</ol>\n<p><b>Verticalizationstrategy has boosted ARPU growth in North America</b></p>\n<p>About two years ago, SNAP made a conscious decision to restructure its sales team to becoming sector specialist rather than continue down the track of being regional specialists. This transition has proven to be extremely successful for the company as ARPU increased by 35% in 2019 followed by 41% in 2020, measurably higher the prior year ARPU growth of 18% in 2018. Over the past 12 to 18 months, SNAP has reported measurable success in verticals such as E-commerce, Consumer Packaged Goods, Tech, Streaming, Online Education and Telco.</p>\n<p>Whilst the impact from Apple's iOS 14 IDFA upgrade on SNAP's growth profile remains indiscernible, we derive some confidence from management's recent strong Q3 guidance and see the risk of the Apple update limiting the ROI for advertisers as manageable. As such, we expect ARPU to grow by 39% in 2022, followed by 34% in 2023 (Figure 8).</p>\n<p><b>Figure 8:</b>SNAP’s NA ARPU growth</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d67a9ca7bd429c6e0c0d488842ba7baa\" tg-width=\"472\" tg-height=\"279\" referrerpolicy=\"no-referrer\"><span>Source: Company Filings &amp; AlphaTech Equities</span></p>\n<p>Prior to implementing the verticalization strategy, a salesperson in the Midwest could serve advertisers from a host of different sectors including, McDonald's, Sprint, Target, T-Mobile, Taco Bell, Gap, Red Bull and Coca-Cola. This lack of focus restricted SNAP to build on advertising expertise required to serve individual verticals and drive higher ROI for clients. After restructuring, all account executives were made in charge of specific sectors rather than regions. An example being that all telecom account executives were made in charge of all advertisers in the telecom space only. This allowed SNAP’s account executives to work more closely with clients in the telecom sector, helping them problem solve and reach advertising goals. To connect these advertisers with audience, SNAP developed a more sophisticated suite of ad products and measurement tools, driving increased ROI for telecom clients.</p>\n<p><b>Ongoing investment in increasing ROI is paying rich dividends for SNAP</b></p>\n<p>By improving its advertising platforms by tweaking its ad measurement and optimization capabilities, SNAP has increased ROI for advertisers, in turn attracting more advertisers to its platform as it saw its active advertiser base doubling YoY in Q1 2021. Half of SNAP’s revenue is derived from direct response campaigns. Revenue from pixel purchases, which allows advertisers to track and retarget customers, was up 3x YoY in Q1 2021. It’s a similar story for SNAP’s Subscription goal-based bidding which also grew 3x YoY in Q1 2021.</p>\n<p>SNAP has always been known to be a laggard when it comes to delivering the same level of targeting capabilities vs Facebook. This has resulted in lower ROI for its advertisers. To counter this SNAP has been investing heavily to increase the sophistication of its ad platform over the past three years and recently claimed that it has reached “feature parity” with the largest advertising platform (Facebook) from the perspective of targeting capabilities driven by goal-based bidding optimizations and ad products.</p>\n<p>With the aim to increase ROI, we see SNAP’s recent investments in ad measurement and optimization as being extremely successful for clients, in turn increasing its own yield, as evidenced by year-on-year increases in eCPM of 67.0% in 1Q2021 and 122.0% in 2Q2021 (Figure 9). Some of the most successful ad products SNAP has released over the past three years, include its Dynamic Ads, down funnel Goal Based Bidding (GBB). This includes pixel purchase and app purchase, Commercials and Shows, Games and Self-Service AR.</p>\n<p><b>Figure 9:</b>eCPM Growth has been impressive since the pandemic</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9f4a31e5006be49edcfd3740bab45b51\" tg-width=\"480\" tg-height=\"274\" referrerpolicy=\"no-referrer\"><span>Source: Company Transcripts</span></p>\n<p><b>Figure 10:</b>NA ARPU has seen strong growth</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/6ae4ae83adc7111429f8194b34bd2ccf\" tg-width=\"471\" tg-height=\"275\" referrerpolicy=\"no-referrer\"><span>Source: Company Transcripts</span></p>\n<p>Another example of how SNAP has successfully focused on improving return on ad spend for its advertisers is its investment in Dynamic Ads format, enabling retailers to implement e-commerce campaigns on its platform that automatically optimizes across the advertisers' entire catalogue. An example being Adidas Canada which as a part of its “Always on E-commerce Strategy”, ran SNAP’s Dynamic Ads, resulting in a 4.4x incremental ROI.</p>\n<p><b>Video advertising represents a significant opportunity for SNAP to accelerate ARPU growth</b></p>\n<p>SNAP was the pioneer of the vertical video format on social media platforms, known for being richly immersive and engaging has seen bigger rivals such as Facebook encroaching on its territory which has copied the format on its platform. Videos represent a significant opportunity for SNAP and other social media platforms to engage its users and drive meaningful results for its advertising partners. SNAP worked closely with Nielsen to help US advertisers gauge the efficacy of reaching their target audiences via Snap Ads. The study revealed how the Total Ad Ratings (TAR) of over thirty cross-platform advertising campaigns reached people on Snapchat versus TV. The study concluded with Snapchat allowing advertisers to increase the reach of its target audiences by 16%. More importantly &gt;70% of Gen Z audience that was reached by Snapchat could not be tapped by TV-only campaigns. This becomes increasingly imperative given the backdrop of people continuing to cut the cord and increasing consumption of mobile content leading to an increased advertisers demand for SNAP’s video ad products such as Commercials.</p>\n<p><b>Figure 11:</b>Time spent on Traditional vs Digital Media in the US</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d94f887d0668c3b90f62feba5192bc5a\" tg-width=\"274\" tg-height=\"293\" referrerpolicy=\"no-referrer\"><span>Source: eMarketer</span></p>\n<p><b>Figure 12:</b>Average time spent on mobile vs TV in the US</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/2f7282acf1a6c682f32a5d2c8caf5a27\" tg-width=\"283\" tg-height=\"293\" referrerpolicy=\"no-referrer\"><span>Source: eMarketer</span></p>\n<p>Another study in partnership with IPG Media Lab revealed that the short form six-second ads convinced more users to consider purchasing the products featured in the commercials compared to 15-second ads.</p>\n<p><b>SNAP to replicate its US playbook in other regions with significant digital marketing budgets</b></p>\n<p>Even though European social media advertisement spend stands at $17.3bn vs $42.2bn in the US (41% of US figure), European ARPU at $5.53 at the end of 2020, represents only 28% of total size of US ARPU@$19.65, highlighting the significant headroom for SNAP to grow in the region. After seeing early success in accelerating revenue by building a robust sector team and increasing localisation, SNAP is now replicating the strategy in regions with markets with meaningful userbase coupled with large digital marketing budgets.</p>\n<p><b>Figure 13: Social media Ad spend in EU vs NA</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/498d0ad9e0658b65a04a78301ba041a3\" tg-width=\"428\" tg-height=\"264\" referrerpolicy=\"no-referrer\"><span>Source: Statista</span></p>\n<p><b>Figure 14: SNAP EU vs NA ARPU</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a484a4e962defffadca653fa6fcf4345\" tg-width=\"453\" tg-height=\"256\" referrerpolicy=\"no-referrer\"><span>Source: Company Filings</span></p>\n<p>In European countries such as UK, Netherlands and France, SNAP already reaches 90% of 13–24-year-olds and 75% of 12-34-year-olds. These developed European countries already see significant digital marketing spend and as such should be the easy low hanging fruits for SNAP to replicate its US playbook in and drive ARPU growth over the next three to five years. Furthermore, in countries that account for over half the world’s digital ad spend, Snapchat already reaches 70% of 13-34-year olds.</p>\n<p><b>SNAP’s AR capabilities allow it to tap into the significant E-commerce opportunity</b></p>\n<p>SNAP sees 200m people engaging with its AR features every day as brands increasingly try to find ways to supplement sales from physical brick and mortars even after the pandemic recedes. A study commissioned by SNAP in partnership with Deloitte saw 94% of people are expecting to use AR for shopping at the same level or more in 2022 versus 2021. SNAP’s leadership in both AR capabilities and user engagement ideally positions it to expand AR to new use cases and behaviours. We see SNAP’s young audience to be early adopters of these new technologies and shopping experiences. One of the key verticals SNAP has customised its solutions for is Apparel and Accessories, which is the largest shopping category for US teenagers (Figure 15).</p>\n<p><b>Figure 15:</b>The apparel, footwear and accessories retail e-commerce revenue in the US ($m)</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/26a4a2c66cfa4357296cfd658cba4678\" tg-width=\"477\" tg-height=\"291\" referrerpolicy=\"no-referrer\"><span>Source: Statista (U.S. online apparel and fashion market size 2022 | Statista) and AlphaTech Equities</span></p>\n<p>Given its AR capabilities, SNAP has solved many technical challenges in the e-commerce space re online shopping. Some areas where SNAP has already made good progress and reported significant success for its retailers include, trying on a pair of shoes, a watch or sunglasses through the use of its AR capabilities. SNAP allows its users to create and manage their 3D models which can easily be converted into Lenses. A good example is Dior's Lens campaign that allowed users to try on six pairs of B27 sneakers through AR. SNAP promoted the lenses within the Snapchat camera and via Snap Ads, with videos showing runway models playing with the Lens and pushing Snapchatters to virtually try on the sneakers by swiping up. This promotion resulted in a 6.2x ROI for Dior.</p>\n<p>Another area of progress rescaling for SNAP has been its beauty AR Lenses which allows users to try on an entire catalogue of beauty skews provided by retailers through its Lens Web Builder. Furthermore, SNAP makes it easier to find new fashion items by enabling users to scan a friend’s outfit or use a saved photo or screenshot and shop for similar items.</p>\n<p>Some of the areas on which SNAP is currently working on perfecting include allowing users to try on clothes and make it look realistic in the way that it drapes over the user's body in the right way. This is much more technically challenging, but we believe if cracked could open up a multi-billion-dollar opportunity for SNAP. Furthermore, SNAP has recently made some longer-term investments with acquisitions such as Fit Analytics and Aerial AI, enabling users to find the correct fit and size for clothes, helping reduce returns and drive margins for retailers. SNAP has also recently released some new features in Lens Studio 4.0 moving towards the goal of achieving a full apparel try-on.</p>\n<p><b>Will Apple’s iOS 14 update on IDFA scuttle SNAP's growth trajectory?</b></p>\n<p>IDFA; an identifier for advertisers is a unique identifier for devices and is used by advertising platforms such as SNAP to target and measure effectiveness of ads by each user through their mobile devices. With the iOS 14 update, Apple announced that it will enable users to block IDFA at the app level. Presaging the iOS 14 update consumers had to actively opt-out of sharing their IDFA but with the software update users are prompted to opt-in or opt-out of sharing their information. Previously, it is believed that 70% of iOS users shared their information but with the latest iOS update only 17% of users have opted in to share their IDFA as of July 2021.</p>\n<p><b>The IDFA update by iOS will see advertising platforms such as SNAP primarily impinged in two key areas:</b></p>\n<p><b>Ad Targeting:</b>If users have actively opted out of sharing their IDFA, platforms such as SNAP will no longer be able to track and retarget them for advertisement purposes. Platforms such as Facebook and Google have other deterministic variables which allow them to track individuals through their mobile devices such as emails and phone numbers. However, what level of these other deterministic variables is available to SNAP remains an unknown.</p>\n<p><b>Ad Measurement:</b>Previously, Mobile Measurement Partners (MMPs are companies which help apps measure the performance of campaigns) had constructed their measurement and fraud capabilities using the IDFA as a base. But with the update to iOS 14, Apple has announced the replacement API called the SKAdNetwork which will allow apps such as SNAP to collect ad conversion data at the campaign level. However, the new API is widely believed to reduce the quality of the date received by apps.</p>\n<p>Somewhat unsurprisingly, SNAP in its most recent earnings call reported seeing some early signs of demand disruptions as advertisers test and learn in this post iOS app tracking environment. This is especially true in the direct response e-commerce and gaming verticals. We continue to monitor these changes that will impact SNAP’s advertising partners, as it has been coy so far to conclude 1). how long it will take for these changes to be fully adopted, 2). the magnitude of the potential interruptions to demand, and 3). the eventual impact on its longer-term growth trajectory.</p>\n<p>In what has been seen as a vote of confidence for the social media company, SNAP saw higher opt-in rates by its users versus the industry average which is around 17% on the back of Apple launching its App Tracking Transparency-related changes at the backend of Q2 this year. SNAP believes that the introduction of the tracking changes by Apple came in later than anticipated. Additionally, the pace of updates to iOS 14 by iPhone users was also lagging SNAP’s expectations, allowing advertisers some more space to navigate Apple’s privacy changes. This we believe has pushed the full impact of the Apple privacy introduction into 2H 2021.</p>\n<p>With the aim to comply with Apple’s latest changes, SNAP enabled advertisers to measure their campaigns through its privacy-protecting measurement stack by introducing Advanced Conversions in Ads Manager. Furthermore, SNAP also launched support of SKAdnetwork version 3.0, with the aim of increasing attribution for advertisers who run Apple’s API.</p>\n<p><b>SNAP’s shares, even though expensive is poised for further acceleration</b></p>\n<p>We believe, much like SNAP's disappearing posts and videos, the opportunity for investors to buy the stock at these levels will not last long. SNAP has traded in EV/Rev range of 18x to 28x over the past 12 months or so which we see justified given its superior execution of its new playbook, leading to best of breed revenue growth profile. We see current street estimates as conservative, caveat by our assumption that the impact from the iOS 14 upgrade will do little to hinder its growth profile going forward. We will monitor Q3 2021 earnings closely for evidence on this, but for now, feel comfortable with management's guidance of 50% rev growth over the next three to five-year cycle.</p>\n<p><b>Figure 16: EV/REV ranged from 18-28x over the past year</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/2fc0c3e5ba6dbe46e068bda2353e7fce\" tg-width=\"640\" tg-height=\"326\" referrerpolicy=\"no-referrer\"><span>Source: Koyfin</span></p>\n<p>We estimate 2022 revenue of $6.3bn which is slightly ahead of current street forecasts at $6.2bn (MarketScreener) driven by higher ARPU and growth in DAU’s forecast. We see a 25x EV/Rev multiple as fair for SNAP, imputing an upside of 42% from its current share price of $72. We initiate coverage on the stock with a rating of “Buy” for SNAP.</p>\n<p><b>Figure 17: We get an upside of 42% for SNAP on a 25x EV/REV multiple on 2022E revenue</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/78152e55ffdef0adcfe646d893339cc1\" tg-width=\"640\" tg-height=\"343\" referrerpolicy=\"no-referrer\"><span>Source: Koyfin, Company reports and AlphaTech Equities</span></p>\n<p><b>Conclusion: We see Snapchat in the elite list of trillion-dollar companies club in the medium to long term</b></p>\n<ul>\n <li>We initiate coverage of SNAP with A “Buy” rating and price target of $102, imputing an upside of 42.2% from its current share price.</li>\n <li>We see a long runway for monetisation growth for SNAP underpinned by its recent successful investments in improving ROI for advertisers.</li>\n <li>With 293m users worldwide, representing only a 4.7% penetration of global smartphone users vs 30.7% for Facebook, we see ample headroom for SNAP to grow its user base.</li>\n <li>We see management’s multi-year revenue growth CAGR target of 50% as achievable driven by growth in DAU and accelerating ARPU.</li>\n <li>However, we closely monitor the risk posed by the latest iOS 14 IDFA which clipped the ability to track and retarget iOS users for advertising platforms such as SNAP.</li>\n <li>Even though valuation remains rich at 25x EV/REV 2022, we see this justified by SNAP’s best of breed growth profile.</li>\n <li>Unless the latest IDFA update from Apple dictates otherwise, we see SNAP continuing to punch strong growth numbers and see current share price as a good entry point for investors who missed the post-pandemic rally. We Initiate coverage on SNAP at \"Buy\".</li>\n</ul>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snapchat: Initiating Coverage With \"Buy\" - Is SNAP The Next Trillion-Dollar Company?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnapchat: Initiating Coverage With \"Buy\" - Is SNAP The Next Trillion-Dollar Company?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-09-20 15:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4455899-snapchat-initiating-coverage-with-buy-is-snap-the-next-trillion-dollar-company><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Written by AlphaTech Equities\nSummary\n\nWe initiate coverage of SNAP with A “Buy” rating and price target of $102, imputing an upside of 42.2% from its current share price.\nWe see a long runway for ...</p>\n\n<a href=\"https://seekingalpha.com/article/4455899-snapchat-initiating-coverage-with-buy-is-snap-the-next-trillion-dollar-company\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNAP":"Snap Inc"},"source_url":"https://seekingalpha.com/article/4455899-snapchat-initiating-coverage-with-buy-is-snap-the-next-trillion-dollar-company","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1134680528","content_text":"Written by AlphaTech Equities\nSummary\n\nWe initiate coverage of SNAP with A “Buy” rating and price target of $102, imputing an upside of 42.2% from its current share price.\nWe see a long runway for monetization growth for SNAP driven by its recent successful investments in improving ROI for advertisers.\nWith 293m users worldwide, representing only a 4.7% penetration of global smartphone users vs 30.7% for Facebook, we see ample headroom for SNAP to grow its user base.\nWe see management’s multi-year revenue growth CAGR target of 50% as achievable driven by its recent prescient investments in accelerating ROI for advertisers.\nHowever, we suggest closely monitoring the risk posed by the latest iOS 14 IDFA update which constrains advertising platforms such as SNAP to track and retarget iOS users, waning ROI for advertisers.\n\nNYCstock/iStock Editorial via Getty Images\nInvestment thesis: When the innovation factory gets its growth playbook right - initiating coverage at \"buy\"\nWe see Snapchat(SNAP)as a leading innovation factory in the social media space, benefitting from best-in-class growth profile, a large and sizeable TAM, strong industry positioning, and prescient co-founders, spearheaded by CEO Evan Spiegel and CTO Bobby Murphy. Even though a challenger to Facebook(NASDAQ:FB), SNAP has a strong track record of successful innovations, showcasing multiple successful product introductions which now mostly have all been encroached upon by rivals such as its disappearing messages, Stories, vertical video format and AR lenses to list just a few.\nGiven its strong focus on privacy and limited quantum of personal information, users were willing to share on its platform, investors wereskepticalof SNAP’s monetisation capabilities vs Facebook in the past. However, a range of successful investments to improve ad targeting and ad measurement capabilities in the last two years, coupled with the restructuring of its sales team to focus on becoming sector specialists (away from being regional specialists) has seen SNAP increase advertisers ROI on its platform. This in turn has resulted in accelerating its own eCPM (revenue per impression) by 50% to 100% over the past year and powered revenue growth which has climbed @45.7% CAGR over the past two years to 2020.\nWe see increased recent investments mostly to grow its vertical focused sales team and continued innovation, especially that in AR with the aim of increasing engagement of users, ultimately improving ROI for advertisers as both, commendable and disciplined. We see management forecasts of 50% revenue growth over the next three to five-year cycle as achievable given that monetisation (SNAP ARPU @$10 vs $32 for FB) remains relatively in early stages. After SNAP turned adjusted EBITDA positive in Q3 of 2020, we see a clear path to profitability corroborated by the high operating leverage inherent in social media platform businesses.\nHowever, SNAP does not come without its risks, as we see the recent introduction of iOS 14 software update, limiting advertisers' ability to track, retarget and measure ads displayed to Apple(NASDAQ:AAPL)users as especially disconcerting. Majority of SNAP’s revenue is still generated in the US, which is led by the Apple user base (54.4%market share of smartphones). We believe the next two quarters will be the high noon for SNAP’s long-term growth trajectory as the impact of the iOS 14 update becomes clearer on its earnings.\nEven though valuations are pricey, we believe the premium is warranted, emblematic of strong recent execution and best of breed growth profile. We see EV/REV of 25x 2022E Revenue as fair and see management outdoing its own bullish revenue growth expectation of CAGR @50% over the next three- to five-year cycle. This confers us a fair value of $102, imputing an upside of 42% from its current share price. We initiate coverage on SNAP at “Buy”\nOngoing penetration of smartphone users on the back of the relaunch of its Android version will drive DAU growth for SNAP\nAfter a blip in SNAP's DAU growth in 2018 where the growth stalled due to a technical glitch in its platform, SNAP’s DAUs have increased at an average CAGR of 20% over the past two and half years to reach 293m users in Q2 2021. We see global DAUs increasing at 11.6% CAGR over the next three years driven primarily by:\n1. Relaunch of its Android version in Q1 2019:In Q1 2021, management reported that its total number of android users had surpassed that of iOS, speaking volumes of the quality of its relaunch just two years ago. Previously management had confirmed performance issues in its app in 2018 on android phones which have now been completely resolved.\n2. Localizing content and language:SNAP continues to invest in expanding its team to support its global community, including investing in region-specific performance improvements of its services, increasing localization of content, improving its creative tools, and offering more language support to its global community outside the United States. A case in point being SNAP’s launch of its first local-market Snap Original in March 2021 with Phone Swap India.\n3. Marketing:Furthermore, it’s broadening its sales efforts and supplier partnerships to drive growth in new geographies where management is seeing increasing traction with users.\n4. Augmented Reality:Another key accelerant for SNAP is its ongoing investment and progress/popularity of its Augmented Reality products/services. We believe SNAP has become the leading AR social media platform and continues to execute well on unlocking the significant multi-billion-dollar opportunity inherent in the e-commerce industry.\nDespite clocking an impressive growth in DAUs (Daily active users) over the past few years (Figure 1), SNAP’s penetration of the global smartphone user base at 4.7% is relatively in its nascence. SNAP's penetration is significantly lower than larger rivals such as Facebook @30.7% (Figure 2), albeit werecognizethat SNAP’s target age group (16–39-year-olds) is significantly narrower than that of Facebook. In our model, we forecast this to climb to 6.4% by 2026.\nFigure 1: SNAP’s Global DAU (M)\nSource: SNAP Company Filings\nFigure 2: Penetration of SNAP DAUs of global smartphones vs Facebook\nSource: SNAP Company Filings\nNote: Q2 CAGR is for half year 2021 only\nIn North America, SNAP had 95m users in Q2 2021, growing at 7.1% CAGR from the beginning of 2018. This represents a 32.1% penetration of all smartphone users in North America. Facebook's DAU penetration of North American smartphone users currently stands @66%. We expect DAU's to continue to increase in the mid-single digits for SNAP in North America even after the pandemic as reopening of economies will lead to people going out more and expanding their social graph.\nSnapchat has 95m users in North America or 3.3% of total smartphones users\nFigure 3:North America DAU (M)\nSource: Snap Inc.\nFigure 4:Penetration of DAUs in N. America\nSource: Snap Inc.\nNote: Q2 CAGR is for half year 2021 only\nIn Europe, SNAP had 78m users in Q2 2021 growing at 11.1% CAGR from the beginning of 2018. According to our analysis, this represents c.12 to 18% penetration of all mobile subscribers in Europe. We expect DAUs to continue to increase in the mid-single digits for SNAP in Europe driven primarily by SNAP dedicating investments to increasingly localize content and add more language support.\nSnapchat has 78m users in Europe\nFigure 5:Europe DAU (M)\nSource: Snap Inc.Note: Q2 CAGR is for half year 2021 only\nIn ROTW, SNAP had 120m users in Q2 2021 growing at 45.5% CAGR from the beginning of 2018. We expect DAUs to continue to increase in the mid-single digits for SNAP in the ROTW, driven primarily by investments in localising content and language, adding new marketing partners and increasing uptake of AR lenses added by its global community.\nSnapchat has 120m users in ROTW\nFigure 6:ROTW DAU (M)\nSource: Snap Inc.Note: Q2 CAGR is for half year 2021 only\nRevenue per user is SNAP’s most significant lever of growth\nDespite a 2020 penetration rate of 31.3% of total users in the US, SNAP represented only 3.9% of total US social media advertisement spend. Its penetration of users in the US is especially low when compared to Facebook, (albeit we recognize SNAP's younger audience bias narrows its relative acreage vs its bigger rival). This highlights the long runway of growth for the company, as they begin to improve ROI for advertisers driving higher monetisation.\nFigure 7:Facebook vs SNAP DAU's and ARPU\nSource: SNAP and Facebook company filings\nRevenue per user has been SNAP’s biggest growth driver over the past couple of years driven primarily by…\n\nRestructuring its sales team to be vertical focused\nRecent investments in increasing ROI have paid rich dividends\nVideo advertising\nReplicating successful US playbook in other markets\nAR impact on E-commerce – as management continues to execute well on unlocking the multi-billion-dollar apparel and clothing opportunity.\n\nVerticalizationstrategy has boosted ARPU growth in North America\nAbout two years ago, SNAP made a conscious decision to restructure its sales team to becoming sector specialist rather than continue down the track of being regional specialists. This transition has proven to be extremely successful for the company as ARPU increased by 35% in 2019 followed by 41% in 2020, measurably higher the prior year ARPU growth of 18% in 2018. Over the past 12 to 18 months, SNAP has reported measurable success in verticals such as E-commerce, Consumer Packaged Goods, Tech, Streaming, Online Education and Telco.\nWhilst the impact from Apple's iOS 14 IDFA upgrade on SNAP's growth profile remains indiscernible, we derive some confidence from management's recent strong Q3 guidance and see the risk of the Apple update limiting the ROI for advertisers as manageable. As such, we expect ARPU to grow by 39% in 2022, followed by 34% in 2023 (Figure 8).\nFigure 8:SNAP’s NA ARPU growth\nSource: Company Filings & AlphaTech Equities\nPrior to implementing the verticalization strategy, a salesperson in the Midwest could serve advertisers from a host of different sectors including, McDonald's, Sprint, Target, T-Mobile, Taco Bell, Gap, Red Bull and Coca-Cola. This lack of focus restricted SNAP to build on advertising expertise required to serve individual verticals and drive higher ROI for clients. After restructuring, all account executives were made in charge of specific sectors rather than regions. An example being that all telecom account executives were made in charge of all advertisers in the telecom space only. This allowed SNAP’s account executives to work more closely with clients in the telecom sector, helping them problem solve and reach advertising goals. To connect these advertisers with audience, SNAP developed a more sophisticated suite of ad products and measurement tools, driving increased ROI for telecom clients.\nOngoing investment in increasing ROI is paying rich dividends for SNAP\nBy improving its advertising platforms by tweaking its ad measurement and optimization capabilities, SNAP has increased ROI for advertisers, in turn attracting more advertisers to its platform as it saw its active advertiser base doubling YoY in Q1 2021. Half of SNAP’s revenue is derived from direct response campaigns. Revenue from pixel purchases, which allows advertisers to track and retarget customers, was up 3x YoY in Q1 2021. It’s a similar story for SNAP’s Subscription goal-based bidding which also grew 3x YoY in Q1 2021.\nSNAP has always been known to be a laggard when it comes to delivering the same level of targeting capabilities vs Facebook. This has resulted in lower ROI for its advertisers. To counter this SNAP has been investing heavily to increase the sophistication of its ad platform over the past three years and recently claimed that it has reached “feature parity” with the largest advertising platform (Facebook) from the perspective of targeting capabilities driven by goal-based bidding optimizations and ad products.\nWith the aim to increase ROI, we see SNAP’s recent investments in ad measurement and optimization as being extremely successful for clients, in turn increasing its own yield, as evidenced by year-on-year increases in eCPM of 67.0% in 1Q2021 and 122.0% in 2Q2021 (Figure 9). Some of the most successful ad products SNAP has released over the past three years, include its Dynamic Ads, down funnel Goal Based Bidding (GBB). This includes pixel purchase and app purchase, Commercials and Shows, Games and Self-Service AR.\nFigure 9:eCPM Growth has been impressive since the pandemic\nSource: Company Transcripts\nFigure 10:NA ARPU has seen strong growth\nSource: Company Transcripts\nAnother example of how SNAP has successfully focused on improving return on ad spend for its advertisers is its investment in Dynamic Ads format, enabling retailers to implement e-commerce campaigns on its platform that automatically optimizes across the advertisers' entire catalogue. An example being Adidas Canada which as a part of its “Always on E-commerce Strategy”, ran SNAP’s Dynamic Ads, resulting in a 4.4x incremental ROI.\nVideo advertising represents a significant opportunity for SNAP to accelerate ARPU growth\nSNAP was the pioneer of the vertical video format on social media platforms, known for being richly immersive and engaging has seen bigger rivals such as Facebook encroaching on its territory which has copied the format on its platform. Videos represent a significant opportunity for SNAP and other social media platforms to engage its users and drive meaningful results for its advertising partners. SNAP worked closely with Nielsen to help US advertisers gauge the efficacy of reaching their target audiences via Snap Ads. The study revealed how the Total Ad Ratings (TAR) of over thirty cross-platform advertising campaigns reached people on Snapchat versus TV. The study concluded with Snapchat allowing advertisers to increase the reach of its target audiences by 16%. More importantly >70% of Gen Z audience that was reached by Snapchat could not be tapped by TV-only campaigns. This becomes increasingly imperative given the backdrop of people continuing to cut the cord and increasing consumption of mobile content leading to an increased advertisers demand for SNAP’s video ad products such as Commercials.\nFigure 11:Time spent on Traditional vs Digital Media in the US\nSource: eMarketer\nFigure 12:Average time spent on mobile vs TV in the US\nSource: eMarketer\nAnother study in partnership with IPG Media Lab revealed that the short form six-second ads convinced more users to consider purchasing the products featured in the commercials compared to 15-second ads.\nSNAP to replicate its US playbook in other regions with significant digital marketing budgets\nEven though European social media advertisement spend stands at $17.3bn vs $42.2bn in the US (41% of US figure), European ARPU at $5.53 at the end of 2020, represents only 28% of total size of US ARPU@$19.65, highlighting the significant headroom for SNAP to grow in the region. After seeing early success in accelerating revenue by building a robust sector team and increasing localisation, SNAP is now replicating the strategy in regions with markets with meaningful userbase coupled with large digital marketing budgets.\nFigure 13: Social media Ad spend in EU vs NA\nSource: Statista\nFigure 14: SNAP EU vs NA ARPU\nSource: Company Filings\nIn European countries such as UK, Netherlands and France, SNAP already reaches 90% of 13–24-year-olds and 75% of 12-34-year-olds. These developed European countries already see significant digital marketing spend and as such should be the easy low hanging fruits for SNAP to replicate its US playbook in and drive ARPU growth over the next three to five years. Furthermore, in countries that account for over half the world’s digital ad spend, Snapchat already reaches 70% of 13-34-year olds.\nSNAP’s AR capabilities allow it to tap into the significant E-commerce opportunity\nSNAP sees 200m people engaging with its AR features every day as brands increasingly try to find ways to supplement sales from physical brick and mortars even after the pandemic recedes. A study commissioned by SNAP in partnership with Deloitte saw 94% of people are expecting to use AR for shopping at the same level or more in 2022 versus 2021. SNAP’s leadership in both AR capabilities and user engagement ideally positions it to expand AR to new use cases and behaviours. We see SNAP’s young audience to be early adopters of these new technologies and shopping experiences. One of the key verticals SNAP has customised its solutions for is Apparel and Accessories, which is the largest shopping category for US teenagers (Figure 15).\nFigure 15:The apparel, footwear and accessories retail e-commerce revenue in the US ($m)\nSource: Statista (U.S. online apparel and fashion market size 2022 | Statista) and AlphaTech Equities\nGiven its AR capabilities, SNAP has solved many technical challenges in the e-commerce space re online shopping. Some areas where SNAP has already made good progress and reported significant success for its retailers include, trying on a pair of shoes, a watch or sunglasses through the use of its AR capabilities. SNAP allows its users to create and manage their 3D models which can easily be converted into Lenses. A good example is Dior's Lens campaign that allowed users to try on six pairs of B27 sneakers through AR. SNAP promoted the lenses within the Snapchat camera and via Snap Ads, with videos showing runway models playing with the Lens and pushing Snapchatters to virtually try on the sneakers by swiping up. This promotion resulted in a 6.2x ROI for Dior.\nAnother area of progress rescaling for SNAP has been its beauty AR Lenses which allows users to try on an entire catalogue of beauty skews provided by retailers through its Lens Web Builder. Furthermore, SNAP makes it easier to find new fashion items by enabling users to scan a friend’s outfit or use a saved photo or screenshot and shop for similar items.\nSome of the areas on which SNAP is currently working on perfecting include allowing users to try on clothes and make it look realistic in the way that it drapes over the user's body in the right way. This is much more technically challenging, but we believe if cracked could open up a multi-billion-dollar opportunity for SNAP. Furthermore, SNAP has recently made some longer-term investments with acquisitions such as Fit Analytics and Aerial AI, enabling users to find the correct fit and size for clothes, helping reduce returns and drive margins for retailers. SNAP has also recently released some new features in Lens Studio 4.0 moving towards the goal of achieving a full apparel try-on.\nWill Apple’s iOS 14 update on IDFA scuttle SNAP's growth trajectory?\nIDFA; an identifier for advertisers is a unique identifier for devices and is used by advertising platforms such as SNAP to target and measure effectiveness of ads by each user through their mobile devices. With the iOS 14 update, Apple announced that it will enable users to block IDFA at the app level. Presaging the iOS 14 update consumers had to actively opt-out of sharing their IDFA but with the software update users are prompted to opt-in or opt-out of sharing their information. Previously, it is believed that 70% of iOS users shared their information but with the latest iOS update only 17% of users have opted in to share their IDFA as of July 2021.\nThe IDFA update by iOS will see advertising platforms such as SNAP primarily impinged in two key areas:\nAd Targeting:If users have actively opted out of sharing their IDFA, platforms such as SNAP will no longer be able to track and retarget them for advertisement purposes. Platforms such as Facebook and Google have other deterministic variables which allow them to track individuals through their mobile devices such as emails and phone numbers. However, what level of these other deterministic variables is available to SNAP remains an unknown.\nAd Measurement:Previously, Mobile Measurement Partners (MMPs are companies which help apps measure the performance of campaigns) had constructed their measurement and fraud capabilities using the IDFA as a base. But with the update to iOS 14, Apple has announced the replacement API called the SKAdNetwork which will allow apps such as SNAP to collect ad conversion data at the campaign level. However, the new API is widely believed to reduce the quality of the date received by apps.\nSomewhat unsurprisingly, SNAP in its most recent earnings call reported seeing some early signs of demand disruptions as advertisers test and learn in this post iOS app tracking environment. This is especially true in the direct response e-commerce and gaming verticals. We continue to monitor these changes that will impact SNAP’s advertising partners, as it has been coy so far to conclude 1). how long it will take for these changes to be fully adopted, 2). the magnitude of the potential interruptions to demand, and 3). the eventual impact on its longer-term growth trajectory.\nIn what has been seen as a vote of confidence for the social media company, SNAP saw higher opt-in rates by its users versus the industry average which is around 17% on the back of Apple launching its App Tracking Transparency-related changes at the backend of Q2 this year. SNAP believes that the introduction of the tracking changes by Apple came in later than anticipated. Additionally, the pace of updates to iOS 14 by iPhone users was also lagging SNAP’s expectations, allowing advertisers some more space to navigate Apple’s privacy changes. This we believe has pushed the full impact of the Apple privacy introduction into 2H 2021.\nWith the aim to comply with Apple’s latest changes, SNAP enabled advertisers to measure their campaigns through its privacy-protecting measurement stack by introducing Advanced Conversions in Ads Manager. Furthermore, SNAP also launched support of SKAdnetwork version 3.0, with the aim of increasing attribution for advertisers who run Apple’s API.\nSNAP’s shares, even though expensive is poised for further acceleration\nWe believe, much like SNAP's disappearing posts and videos, the opportunity for investors to buy the stock at these levels will not last long. SNAP has traded in EV/Rev range of 18x to 28x over the past 12 months or so which we see justified given its superior execution of its new playbook, leading to best of breed revenue growth profile. We see current street estimates as conservative, caveat by our assumption that the impact from the iOS 14 upgrade will do little to hinder its growth profile going forward. We will monitor Q3 2021 earnings closely for evidence on this, but for now, feel comfortable with management's guidance of 50% rev growth over the next three to five-year cycle.\nFigure 16: EV/REV ranged from 18-28x over the past year\nSource: Koyfin\nWe estimate 2022 revenue of $6.3bn which is slightly ahead of current street forecasts at $6.2bn (MarketScreener) driven by higher ARPU and growth in DAU’s forecast. We see a 25x EV/Rev multiple as fair for SNAP, imputing an upside of 42% from its current share price of $72. We initiate coverage on the stock with a rating of “Buy” for SNAP.\nFigure 17: We get an upside of 42% for SNAP on a 25x EV/REV multiple on 2022E revenue\nSource: Koyfin, Company reports and AlphaTech Equities\nConclusion: We see Snapchat in the elite list of trillion-dollar companies club in the medium to long term\n\nWe initiate coverage of SNAP with A “Buy” rating and price target of $102, imputing an upside of 42.2% from its current share price.\nWe see a long runway for monetisation growth for SNAP underpinned by its recent successful investments in improving ROI for advertisers.\nWith 293m users worldwide, representing only a 4.7% penetration of global smartphone users vs 30.7% for Facebook, we see ample headroom for SNAP to grow its user base.\nWe see management’s multi-year revenue growth CAGR target of 50% as achievable driven by growth in DAU and accelerating ARPU.\nHowever, we closely monitor the risk posed by the latest iOS 14 IDFA which clipped the ability to track and retarget iOS users for advertising platforms such as SNAP.\nEven though valuation remains rich at 25x EV/REV 2022, we see this justified by SNAP’s best of breed growth profile.\nUnless the latest IDFA update from Apple dictates otherwise, we see SNAP continuing to punch strong growth numbers and see current share price as a good entry point for investors who missed the post-pandemic rally. We Initiate coverage on SNAP at \"Buy\".","news_type":1},"isVote":1,"tweetType":1,"viewCount":634,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":860971506,"gmtCreate":1632128166105,"gmtModify":1676530706348,"author":{"id":"3572467863337252","authorId":"3572467863337252","name":"Jaywei","avatar":"https://static.tigerbbs.com/beccce245458fd51f01db3fd362d9d9c","crmLevel":6,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3572467863337252","authorIdStr":"3572467863337252"},"themes":[],"htmlText":"Some?","listText":"Some?","text":"Some?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/860971506","repostId":"1117610618","repostType":4,"repost":{"id":"1117610618","kind":"news","weMediaInfo":{"introduction":"Providing stock market headlines, business news, financials and earnings ","home_visible":1,"media_name":"Tiger Newspress","id":"1079075236","head_image":"https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba"},"pubTimestamp":1632126033,"share":"https://ttm.financial/m/news/1117610618?lang=&edition=fundamental","pubTime":"2021-09-20 16:20","market":"us","language":"en","title":"Some China concepts stocks fell in premarket trading","url":"https://stock-news.laohu8.com/highlight/detail?id=1117610618","media":"Tiger Newspress","summary":"(Sept 20) Some China concepts stocks fell in premarket trading.","content":"<p>(Sept 20)&nbsp;Some&nbsp;China concepts stocks fell in premarket trading.</p>\n<p><img src=\"https://static.tigerbbs.com/dc0bfb5f2f1bc4d2f48c30ba44145250\" tg-width=\"357\" tg-height=\"724\" referrerpolicy=\"no-referrer\"></p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" 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style=\"background-image:url(https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Tiger Newspress </p>\n<p class=\"h-time\">2021-09-20 16:20</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<p>(Sept 20)&nbsp;Some&nbsp;China concepts stocks fell in premarket trading.</p>\n<p><img src=\"https://static.tigerbbs.com/dc0bfb5f2f1bc4d2f48c30ba44145250\" tg-width=\"357\" tg-height=\"724\" referrerpolicy=\"no-referrer\"></p>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1117610618","content_text":"(Sept 20) Some China concepts stocks fell in premarket trading.","news_type":1},"isVote":1,"tweetType":1,"viewCount":592,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":883100065,"gmtCreate":1631213938757,"gmtModify":1676530497941,"author":{"id":"3572467863337252","authorId":"3572467863337252","name":"Jaywei","avatar":"https://static.tigerbbs.com/beccce245458fd51f01db3fd362d9d9c","crmLevel":6,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3572467863337252","authorIdStr":"3572467863337252"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/ARKK\">$ARK Innovation ETF(ARKK)$</a>Dip wru","listText":"<a href=\"https://laohu8.com/S/ARKK\">$ARK Innovation ETF(ARKK)$</a>Dip wru","text":"$ARK Innovation ETF(ARKK)$Dip wru","images":[{"img":"https://static.tigerbbs.com/f553bfb5ccb94a8cad9c383a2f249197","width":"1170","height":"2026"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/883100065","isVote":1,"tweetType":1,"viewCount":918,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":880344704,"gmtCreate":1631022717808,"gmtModify":1676530445246,"author":{"id":"3572467863337252","authorId":"3572467863337252","name":"Jaywei","avatar":"https://static.tigerbbs.com/beccce245458fd51f01db3fd362d9d9c","crmLevel":6,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3572467863337252","authorIdStr":"3572467863337252"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/ARKK\">$ARK Innovation ETF(ARKK)$</a>Let’s go","listText":"<a href=\"https://laohu8.com/S/ARKK\">$ARK Innovation ETF(ARKK)$</a>Let’s go","text":"$ARK Innovation ETF(ARKK)$Let’s go","images":[{"img":"https://static.tigerbbs.com/f947c9a88bf00d4a39e7d39eac19cc27","width":"1170","height":"2026"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/880344704","isVote":1,"tweetType":1,"viewCount":373,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":892767495,"gmtCreate":1628690430617,"gmtModify":1676529822764,"author":{"id":"3572467863337252","authorId":"3572467863337252","name":"Jaywei","avatar":"https://static.tigerbbs.com/beccce245458fd51f01db3fd362d9d9c","crmLevel":6,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3572467863337252","authorIdStr":"3572467863337252"},"themes":[],"htmlText":"Nice comment","listText":"Nice comment","text":"Nice comment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":3,"repostSize":0,"link":"https://ttm.financial/post/892767495","repostId":"2158474560","repostType":4,"repost":{"id":"2158474560","kind":"highlight","pubTimestamp":1628687700,"share":"https://ttm.financial/m/news/2158474560?lang=&edition=fundamental","pubTime":"2021-08-11 21:15","market":"us","language":"en","title":"3 Tech Stocks That Turned $10,000 Into Over $500,000","url":"https://stock-news.laohu8.com/highlight/detail?id=2158474560","media":"Motley Fool","summary":"These high-growth tech stocks generated massive multibagger gains.","content":"<p>The legendary investor Peter Lynch coined the term \"multibagger\" in his evergreen investing book <i>One Up on Wall Street</i>&nbsp;to describe stocks that have more than doubled in price. A stock that doubled in value was known as a \"two-bagger,\" while a stock that rose 20 times was called a \"20-bagger.\"</p>\n<p>Growth-oriented investors often seek out multibagger stocks in the tech sector, which has more than its fair share of high-growth and disruptive companies. It might seem tough to find the next big multibagger in this diverse sector, but studying a few stocks that previously crossed that threshold might help investors identify the upcoming winners.</p>\n<p>Let's examine three tech stocks that turned a modest $10,000 investment into more than $500,000 -- and what lessons we can glean from their massive multibagger gains.</p>\n<h2>1. Baidu: Turning $10,000 into more than $600,000</h2>\n<p><b>Baidu</b> (NASDAQ:BIDU), the Chinese tech company that owns the country's largest search engine, went public in 2005. If you had invested $10,000 in its IPO, your stake would be worth over $600,000 today.</p>\n<p>Between fiscal 2005 and 2010, Baidu's annual revenue rose at a whopping compound annual growth rate (CAGR) of 97.8%. The growth of the Chinese economy, rising income levels, and higher internet penetration rates drove that growth, and Baidu solidified its position as the online search leader in 2010 after <b>Alphabet</b>'s Google pulled out of mainland China.</p>\n<p>Between 2010 and 2015, Baidu's annual revenue grew at a CAGR of 53.6% as it expanded its ecosystem beyond its search engine with new mobile apps and cloud storage services.</p>\n<p>But between 2015 and 2020, Baidu's revenue only rose at a CAGR of 9.9%, as tighter restrictions on its online ads, rising competition from monolithic apps like <b>Tencent</b>'s WeChat, and the slowdown of China's economy throttled its growth. The pandemic exacerbated that pain last year, and Baidu remains exposed to the Chinese government's escalating crackdown on its top tech companies.</p>\n<p>As a result, Baidu's stock price has declined about 40% over the past six months and has stayed roughly flat over the past five years. That dismal return indicates high-growth multibagger stocks like Baidu can lose their momentum as their core markets mature, new competitors enter the market, and government regulators change the rules of the game.</p>\n<h2>2. Shopify: Turning $10,000 into nearly $900,000</h2>\n<p><b>Shopify</b> (NYSE:SHOP), a Canadian e-commerce services company that enables businesses to build their own online stores, fulfill their own orders, and manage their own marketing campaigns, went public in 2015. A $10,000 investment in its IPO would be worth nearly $900,000 today.</p>\n<p>Shopify grew like a weed because many smaller businesses didn't want to tether themselves to big online marketplaces like<b> Amazon</b> (NASDAQ:AMZN), which rein in their sellers with listing fees and restrictive rules. That transition accelerated throughout the pandemic last year as more businesses opened online stores.</p>\n<p>Shopify's revenue rose at a CAGR of 70.2% between 2015 and 2020. The stock has risen more than 30% this year, even as concerns about slower online spending in a post-pandemic market battered other e-commerce stocks -- and investors continue to pay a premium for Shopify's growth at over 40 times this year's sales.</p>\n<p>Unlike Baidu, Shopify doesn't yet face any existential challenges. Its decentralized e-commerce approach continues to disrupt Amazon's centralized platform, and it could have plenty of room to grow over the long term as more offline merchants bring their businesses online.</p>\n<h2>3. Nvidia: Turning $10,000 into $8.16 million</h2>\n<p><b>Nvidia</b> (NASDAQ:NVDA), the world's largest producer of discrete GPUs for computers, servers, and video game consoles, went public in 1999. If you had invested $10,000 in its IPO back then, your initial investment would now be worth nearly $8.2 million.</p>\n<p>Nvidia experienced a massive growth spurt over the past five years, as demand for its gaming and data center GPUs hit record levels. A new generation of PC games lifted sales of its gaming GPUs, while new AI applications at data centers sparked fierce demand for its high-end server GPUs.</p>\n<p>Higher cryptocurrency prices also periodically boosted sales of Nvidia's gaming GPUs for mining purposes, and it sold more Arm-based Tegra CPUs for connected cars and<b> Nintendo</b>'s Switch consoles.</p>\n<p>Those tailwinds, along with its acquisition of the data center equipment maker Mellanox last April, boosted Nvidia's annual revenue at a CAGR of 27.2% between fiscal 2016 and fiscal 2021.</p>\n<p>Nvidia remains <a href=\"https://laohu8.com/S/AONE.U\">one</a> of the market's fastest-growing chipmakers, even as its proposed acquisition of Arm Holdings remains on thin ice. It continues to widen its lead against <b>Advanced Micro Devices </b>in the discrete GPU market, and it remains a solid investment on the secular growth of the gaming, data center, and AI markets.</p>\n<p>Nvidia's stock price has rallied more than 50% this year, yet its stock still looks surprisingly cheap at 12 times forward earnings. Therefore, Nvidia's stock could still have plenty of room to run -- even if the regulators strike down its ambitious takeover of Arm Holdings.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>3 Tech Stocks That Turned $10,000 Into Over $500,000</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n3 Tech Stocks That Turned $10,000 Into Over $500,000\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-08-11 21:15 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/08/10/3-tech-stocks-that-turned-10000-into-over-500000/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The legendary investor Peter Lynch coined the term \"multibagger\" in his evergreen investing book One Up on Wall Street to describe stocks that have more than doubled in price. A stock that doubled in ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/08/10/3-tech-stocks-that-turned-10000-into-over-500000/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SHOP":"Shopify Inc","NVDA":"英伟达","BIDU":"百度"},"source_url":"https://www.fool.com/investing/2021/08/10/3-tech-stocks-that-turned-10000-into-over-500000/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2158474560","content_text":"The legendary investor Peter Lynch coined the term \"multibagger\" in his evergreen investing book One Up on Wall Street to describe stocks that have more than doubled in price. A stock that doubled in value was known as a \"two-bagger,\" while a stock that rose 20 times was called a \"20-bagger.\"\nGrowth-oriented investors often seek out multibagger stocks in the tech sector, which has more than its fair share of high-growth and disruptive companies. It might seem tough to find the next big multibagger in this diverse sector, but studying a few stocks that previously crossed that threshold might help investors identify the upcoming winners.\nLet's examine three tech stocks that turned a modest $10,000 investment into more than $500,000 -- and what lessons we can glean from their massive multibagger gains.\n1. Baidu: Turning $10,000 into more than $600,000\nBaidu (NASDAQ:BIDU), the Chinese tech company that owns the country's largest search engine, went public in 2005. If you had invested $10,000 in its IPO, your stake would be worth over $600,000 today.\nBetween fiscal 2005 and 2010, Baidu's annual revenue rose at a whopping compound annual growth rate (CAGR) of 97.8%. The growth of the Chinese economy, rising income levels, and higher internet penetration rates drove that growth, and Baidu solidified its position as the online search leader in 2010 after Alphabet's Google pulled out of mainland China.\nBetween 2010 and 2015, Baidu's annual revenue grew at a CAGR of 53.6% as it expanded its ecosystem beyond its search engine with new mobile apps and cloud storage services.\nBut between 2015 and 2020, Baidu's revenue only rose at a CAGR of 9.9%, as tighter restrictions on its online ads, rising competition from monolithic apps like Tencent's WeChat, and the slowdown of China's economy throttled its growth. The pandemic exacerbated that pain last year, and Baidu remains exposed to the Chinese government's escalating crackdown on its top tech companies.\nAs a result, Baidu's stock price has declined about 40% over the past six months and has stayed roughly flat over the past five years. That dismal return indicates high-growth multibagger stocks like Baidu can lose their momentum as their core markets mature, new competitors enter the market, and government regulators change the rules of the game.\n2. Shopify: Turning $10,000 into nearly $900,000\nShopify (NYSE:SHOP), a Canadian e-commerce services company that enables businesses to build their own online stores, fulfill their own orders, and manage their own marketing campaigns, went public in 2015. A $10,000 investment in its IPO would be worth nearly $900,000 today.\nShopify grew like a weed because many smaller businesses didn't want to tether themselves to big online marketplaces like Amazon (NASDAQ:AMZN), which rein in their sellers with listing fees and restrictive rules. That transition accelerated throughout the pandemic last year as more businesses opened online stores.\nShopify's revenue rose at a CAGR of 70.2% between 2015 and 2020. The stock has risen more than 30% this year, even as concerns about slower online spending in a post-pandemic market battered other e-commerce stocks -- and investors continue to pay a premium for Shopify's growth at over 40 times this year's sales.\nUnlike Baidu, Shopify doesn't yet face any existential challenges. Its decentralized e-commerce approach continues to disrupt Amazon's centralized platform, and it could have plenty of room to grow over the long term as more offline merchants bring their businesses online.\n3. Nvidia: Turning $10,000 into $8.16 million\nNvidia (NASDAQ:NVDA), the world's largest producer of discrete GPUs for computers, servers, and video game consoles, went public in 1999. If you had invested $10,000 in its IPO back then, your initial investment would now be worth nearly $8.2 million.\nNvidia experienced a massive growth spurt over the past five years, as demand for its gaming and data center GPUs hit record levels. A new generation of PC games lifted sales of its gaming GPUs, while new AI applications at data centers sparked fierce demand for its high-end server GPUs.\nHigher cryptocurrency prices also periodically boosted sales of Nvidia's gaming GPUs for mining purposes, and it sold more Arm-based Tegra CPUs for connected cars and Nintendo's Switch consoles.\nThose tailwinds, along with its acquisition of the data center equipment maker Mellanox last April, boosted Nvidia's annual revenue at a CAGR of 27.2% between fiscal 2016 and fiscal 2021.\nNvidia remains one of the market's fastest-growing chipmakers, even as its proposed acquisition of Arm Holdings remains on thin ice. It continues to widen its lead against Advanced Micro Devices in the discrete GPU market, and it remains a solid investment on the secular growth of the gaming, data center, and AI markets.\nNvidia's stock price has rallied more than 50% this year, yet its stock still looks surprisingly cheap at 12 times forward earnings. Therefore, Nvidia's stock could still have plenty of room to run -- even if the regulators strike down its ambitious takeover of Arm Holdings.","news_type":1},"isVote":1,"tweetType":1,"viewCount":550,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":804324614,"gmtCreate":1627932618638,"gmtModify":1703498063344,"author":{"id":"3572467863337252","authorId":"3572467863337252","name":"Jaywei","avatar":"https://static.tigerbbs.com/beccce245458fd51f01db3fd362d9d9c","crmLevel":6,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3572467863337252","authorIdStr":"3572467863337252"},"themes":[],"htmlText":"Chicken genius","listText":"Chicken genius","text":"Chicken genius","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":8,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/804324614","repostId":"2156511670","repostType":4,"repost":{"id":"2156511670","kind":"highlight","weMediaInfo":{"introduction":"The leading daily newsletter for the latest financial and business news. 33Yrs Helping Stock Investors with Investing Insights, Tools, News & More.","home_visible":0,"media_name":"Investors","id":"1085713068","head_image":"https://static.tigerbbs.com/608dd68a89ed486e18f64efe3136266c"},"pubTimestamp":1627918709,"share":"https://ttm.financial/m/news/2156511670?lang=&edition=fundamental","pubTime":"2021-08-02 23:38","market":"us","language":"en","title":"Using Options To Create A 10% Synthetic 'Dividend' On Tesla Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2156511670","media":"Investors","summary":"If Tesla stock stays above 450 then I achieve a 10.14% per annum return when the put expires worthless.","content":"<p><b>Tesla</b>&nbsp;stock is holding nicely above a rising 50-day moving average and is trading above 700 in the stock market today.&nbsp;</p>\n<p>One bad thing about Tesla stock is that it doesn't pay a dividend. But, what if we could use options to manufacture our own dividend?&nbsp;</p>\n<p>Let's say I have $45,000 that I want to invest in TSLA stock. I could simply buy some shares and hope the stock rises.&nbsp;</p>\n<p>But, if I want a more conservative play, I could sell a March 18, 2022-expiring put with a strike price of 450 and set aside the $45,000 in case I am assigned on the short put.&nbsp;</p>\n<p>That 450 strike put generates around $2,680 in option premium in just under eight months.&nbsp;So, my $45,000 investment into Tesla is giving me a 10.14% annualized \"dividend.\" What's the catch? Well, much like owning Tesla shares, if the stock keeps dropping, I'm going to lose money in the short-term.&nbsp;</p>\n<p>If Tesla stock is below 450 next March, then I will be forced to buy 100 shares at 450 each.&nbsp;</p>\n<h3>10% Annualized Return If Put Expires Worthless</h3>\n<p>But, if TSLA stays above 450, then I achieve a 10.14% per annum return when the put expires worthless.&nbsp;</p>\n<p>Cash secured puts are a bullish strategy but are considered slightly less bullish than owning Tesla stock because the potential gains are limited to the premium received.&nbsp;</p>\n<p>The 450 strike put currently has a delta of 9, so selling this put gives you an exposure roughly equivalent to owning nine shares of Tesla stock, although this will change as the stock moves up and down.&nbsp;</p>\n<p>One method that can help cut the risk is to turn it into a spread and buy a $250 strike put. This turns the trade into a bull put spread and reduces the capital at risk.&nbsp;</p>\n<p>Tesla stock has a Composite Rating of 89, an EPS Rating of 73 and a Relative Strength Rating of 86.&nbsp;</p>\n<p>Please remember that options are risky, and investors can lose 100% of&nbsp;their investment.&nbsp;&nbsp;</p>\n<p>This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.&nbsp;</p>\n<p><i>Gavin McMaster has a&nbsp;Masters in Applied Finance&nbsp;and Investment. He specializes in income trading using options, is very conservative in his style and believes patience in waiting for the best setups is the key to successful&nbsp;trading. Follow him on <a href=\"https://laohu8.com/S/TWTR\">Twitter</a> at @OptiontradinIQ</i><i>&nbsp;</i></p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Using Options To Create A 10% Synthetic 'Dividend' On Tesla Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nUsing Options To Create A 10% Synthetic 'Dividend' On Tesla Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/608dd68a89ed486e18f64efe3136266c);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Investors </p>\n<p class=\"h-time\">2021-08-02 23:38</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<p><b>Tesla</b>&nbsp;stock is holding nicely above a rising 50-day moving average and is trading above 700 in the stock market today.&nbsp;</p>\n<p>One bad thing about Tesla stock is that it doesn't pay a dividend. But, what if we could use options to manufacture our own dividend?&nbsp;</p>\n<p>Let's say I have $45,000 that I want to invest in TSLA stock. I could simply buy some shares and hope the stock rises.&nbsp;</p>\n<p>But, if I want a more conservative play, I could sell a March 18, 2022-expiring put with a strike price of 450 and set aside the $45,000 in case I am assigned on the short put.&nbsp;</p>\n<p>That 450 strike put generates around $2,680 in option premium in just under eight months.&nbsp;So, my $45,000 investment into Tesla is giving me a 10.14% annualized \"dividend.\" What's the catch? Well, much like owning Tesla shares, if the stock keeps dropping, I'm going to lose money in the short-term.&nbsp;</p>\n<p>If Tesla stock is below 450 next March, then I will be forced to buy 100 shares at 450 each.&nbsp;</p>\n<h3>10% Annualized Return If Put Expires Worthless</h3>\n<p>But, if TSLA stays above 450, then I achieve a 10.14% per annum return when the put expires worthless.&nbsp;</p>\n<p>Cash secured puts are a bullish strategy but are considered slightly less bullish than owning Tesla stock because the potential gains are limited to the premium received.&nbsp;</p>\n<p>The 450 strike put currently has a delta of 9, so selling this put gives you an exposure roughly equivalent to owning nine shares of Tesla stock, although this will change as the stock moves up and down.&nbsp;</p>\n<p>One method that can help cut the risk is to turn it into a spread and buy a $250 strike put. This turns the trade into a bull put spread and reduces the capital at risk.&nbsp;</p>\n<p>Tesla stock has a Composite Rating of 89, an EPS Rating of 73 and a Relative Strength Rating of 86.&nbsp;</p>\n<p>Please remember that options are risky, and investors can lose 100% of&nbsp;their investment.&nbsp;&nbsp;</p>\n<p>This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.&nbsp;</p>\n<p><i>Gavin McMaster has a&nbsp;Masters in Applied Finance&nbsp;and Investment. He specializes in income trading using options, is very conservative in his style and believes patience in waiting for the best setups is the key to successful&nbsp;trading. Follow him on <a href=\"https://laohu8.com/S/TWTR\">Twitter</a> at @OptiontradinIQ</i><i>&nbsp;</i></p>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSLA":"特斯拉"},"is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2156511670","content_text":"Tesla stock is holding nicely above a rising 50-day moving average and is trading above 700 in the stock market today. \nOne bad thing about Tesla stock is that it doesn't pay a dividend. But, what if we could use options to manufacture our own dividend? \nLet's say I have $45,000 that I want to invest in TSLA stock. I could simply buy some shares and hope the stock rises. \nBut, if I want a more conservative play, I could sell a March 18, 2022-expiring put with a strike price of 450 and set aside the $45,000 in case I am assigned on the short put. \nThat 450 strike put generates around $2,680 in option premium in just under eight months. So, my $45,000 investment into Tesla is giving me a 10.14% annualized \"dividend.\" What's the catch? Well, much like owning Tesla shares, if the stock keeps dropping, I'm going to lose money in the short-term. \nIf Tesla stock is below 450 next March, then I will be forced to buy 100 shares at 450 each. \n10% Annualized Return If Put Expires Worthless\nBut, if TSLA stays above 450, then I achieve a 10.14% per annum return when the put expires worthless. \nCash secured puts are a bullish strategy but are considered slightly less bullish than owning Tesla stock because the potential gains are limited to the premium received. \nThe 450 strike put currently has a delta of 9, so selling this put gives you an exposure roughly equivalent to owning nine shares of Tesla stock, although this will change as the stock moves up and down. \nOne method that can help cut the risk is to turn it into a spread and buy a $250 strike put. This turns the trade into a bull put spread and reduces the capital at risk. \nTesla stock has a Composite Rating of 89, an EPS Rating of 73 and a Relative Strength Rating of 86. \nPlease remember that options are risky, and investors can lose 100% of their investment.  \nThis article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions. \nGavin McMaster has a Masters in Applied Finance and Investment. He specializes in income trading using options, is very conservative in his style and believes patience in waiting for the best setups is the key to successful trading. Follow him on Twitter at @OptiontradinIQ","news_type":1},"isVote":1,"tweetType":1,"viewCount":523,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":802164543,"gmtCreate":1627736182182,"gmtModify":1703495346437,"author":{"id":"3572467863337252","authorId":"3572467863337252","name":"Jaywei","avatar":"https://static.tigerbbs.com/beccce245458fd51f01db3fd362d9d9c","crmLevel":6,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3572467863337252","authorIdStr":"3572467863337252"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/802164543","repostId":"1154216466","repostType":4,"repost":{"id":"1154216466","kind":"news","pubTimestamp":1627713678,"share":"https://ttm.financial/m/news/1154216466?lang=&edition=fundamental","pubTime":"2021-07-31 14:41","market":"us","language":"en","title":"Antitrust Activists Want to Go Full Throttle. Here’s a Lesson They Should Consider First","url":"https://stock-news.laohu8.com/highlight/detail?id=1154216466","media":"Barron's","summary":"About the author: Thomas W. Hazlett is H.H. Macaulay endowed professor of economics at Clemson Unive","content":"<p><i>About the author: Thomas W. Hazlett is H.H. Macaulay endowed professor of economics at Clemson University, and previously served as chief economist of the Federal Communications Commission.&nbsp;His latest book is</i>The Political Spectrum: The Tumultuous Liberation of Wireless Technologies, from Herbert Hoover to the Smartphone.</p>\n<p>Big Tech is in the antitrust hot seat. But before the Department of Justice tries to break up companies likeGoogleorApple,it should recall the history, and eventual outcome, of theAT&amp;T-Time Warner merger.</p>\n<p>The DOJ expended extensive time and resources to stop AT&amp;T’s acquisition of Time Warner, marking the department’s first challenge to a major vertical merger in over 40 years. The government was unsuccessful despite its best efforts, which included an appeal to the D.C. Circuit, and time reveals that its concerns were evidently misplaced all along. The merger did not result in higher prices, program blackouts, or even any appreciable advantage for the companies.</p>\n<p>In October 2016 AT&amp;Tannouncedits plan to buy Time Warner.&nbsp; Donald Trump’s presidential campaign trashed the merger in a statement: &nbsp;“AT&amp;T … is now trying to buy Time Warner and thus the wildly anti-Trump CNN. Donald Trump would never approve such a deal.”&nbsp; With Trump in office, the DOJ moved to block it.</p>\n<p>In 2017, the DOJ went to court tocomplainthat the merger would “substantially lessen competition in video” by allowing AT&amp;T to “use Time Warner’s ‘must have’” networks like CNN, TNT, TBS, and HBO to raise fees charged to rival cable TV distributors like Comcast or DISH. AT&amp;T, which had acquired national satellite operator DirecTV, could threaten “blackouts” depriving rival distributors of key programs—their subscribers would then quit and flock to DirecTV (AT&amp;T) so as to keep watching CNN or the NBA Playoffs on TNT. Not only would major TV and cable systems be hurt, but emerging online streaming services would be crushed.</p>\n<p>The government’s case focused on “vertical leveraging,” where a company uses two complementary products to make it more difficult for rivals to compete in the individual markets.&nbsp;Here, AT&amp;T was combining video content creation with video program distribution; the allegation was that competitors in either segment might be hurt.&nbsp;Yet there are clear efficiencies to be had, as widely found in studies of vertically integrated firms, with joint operations boosting consumer happiness. Buyers at Costco eagerly snap up Costco-supplied Kirkland products—which the retailer stocks in place of those of some independent producers—if they improve price or quality.&nbsp;So facts, not just a story, are needed.&nbsp; District Court Judge Richard J. Leonfoundthat the DOJ case “falls far short of establishing the validity of its… theory.”</p>\n<p>Aside from the political overtones of the case, there was good historical reason to doubt the official complaint. A cable TV programmer combined with (or split from) a video distributor several times in recent years.&nbsp;Vertical integration did not cause higher prices, as shown by econometric analysis. Nor did vertical integration lead to “blackouts,” as the DOJ conceded. A three-judge panel of the D.C. Circuit confirmed Judge Leon’s opinion, finding that “the industry had become dynamic in recent years with the emergence, for example, of Netflix and Hulu.”</p>\n<p>Owning DirecTV and Time Warner together turned out to be not much advantage, let alone a monopoly. Despite a huge boost in pandemic demand for video content, rivals soon dined on AT&amp;T-Time Warner’s lunch. When AT&amp;T bought DirecTV in 2015, it paid $67 billion.&nbsp;In February 2021, with DirecTV’s satellite subscriber base collapsing, the spun-off operation wasvaluedat $16.3 billion.</p>\n<p>And AT&amp;Tthen unloaded the video assets of Time Warner. A new enterprise—Warner Bros. Discovery—is being spun off and merged with Discovery (Discovery Channel, Animal Planet, TLC, HGTV, the Food Networkand more). The content-only firm voluntarily severs the link the DOJ critiqued as easy monopoly money. With the allegations of anticompetitive bundling, it has been cast off as not worth the trouble.AT&amp;T shareholders receive $43 billion, less than half the $100 billion AT&amp;T expended (in debt and equity) for Time Warner three years ago. The government’s scenario of anti-competitive vertical integration proved a fantasy.</p>\n<p>AT&amp;T’s maneuvers deserve whatever scorn billions in shareholder losses can buy. A cynic might offer that antitrust laws be beefed up to protect against such corporate errors, ignoring that economic penalties—more reliable and harsher than whatever antitrust enforcers might deal—are visibly in place. But little note has been made of the ironic political saga. Policymakers are moving full throttle to enact statutes to beef up antitrust prosecution in tech for exactly what AT&amp;T so spectacularly failed to do in video.&nbsp; Rep. Pramila Jayapal (D-Wash.) and Rep. Lance Gooden (R-Texas) introduced the “Ending Monopoly Platforms Act” that would restrict vertical mergers in online services, for example. At least five other bills for new antitrust rules have been introduced.</p>\n<p>Not only can such policies be expensive legal diversions, they can block the innovations igniting exciting new choices for customers. Netflix has integrated from streaming into movie production, after launching Roku. Hulu was created by News Corp. (Fox) and NBC-Universal (Comcast).&nbsp;Amazon Prime Video, Sling, YouTube TV, Apple TV, Disney Plus, HBO Max and Paramount Plus—each has extended a large media or e-commerce platform. Each evolved from a quest for better products. Treating entrepreneurship as suspect puts the screws to just the disruptions now roiling online entertainment markets. AT&amp;T learned the hard way that owning complementary products is no guarantee of success. </p>","source":"lsy1610680873436","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Antitrust Activists Want to Go Full Throttle. Here’s a Lesson They Should Consider First</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAntitrust Activists Want to Go Full Throttle. Here’s a Lesson They Should Consider First\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-31 14:41 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barrons.com/articles/antitrust-activists-want-to-go-full-throttle-heres-a-lesson-they-should-consider-first-51627509048?mod=hp_COMMENTARY_3><strong>Barron's</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>About the author: Thomas W. Hazlett is H.H. Macaulay endowed professor of economics at Clemson University, and previously served as chief economist of the Federal Communications Commission. His latest...</p>\n\n<a href=\"https://www.barrons.com/articles/antitrust-activists-want-to-go-full-throttle-heres-a-lesson-they-should-consider-first-51627509048?mod=hp_COMMENTARY_3\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.barrons.com/articles/antitrust-activists-want-to-go-full-throttle-heres-a-lesson-they-should-consider-first-51627509048?mod=hp_COMMENTARY_3","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1154216466","content_text":"About the author: Thomas W. Hazlett is H.H. Macaulay endowed professor of economics at Clemson University, and previously served as chief economist of the Federal Communications Commission. His latest book isThe Political Spectrum: The Tumultuous Liberation of Wireless Technologies, from Herbert Hoover to the Smartphone.\nBig Tech is in the antitrust hot seat. But before the Department of Justice tries to break up companies likeGoogleorApple,it should recall the history, and eventual outcome, of theAT&T-Time Warner merger.\nThe DOJ expended extensive time and resources to stop AT&T’s acquisition of Time Warner, marking the department’s first challenge to a major vertical merger in over 40 years. The government was unsuccessful despite its best efforts, which included an appeal to the D.C. Circuit, and time reveals that its concerns were evidently misplaced all along. The merger did not result in higher prices, program blackouts, or even any appreciable advantage for the companies.\nIn October 2016 AT&Tannouncedits plan to buy Time Warner.  Donald Trump’s presidential campaign trashed the merger in a statement:  “AT&T … is now trying to buy Time Warner and thus the wildly anti-Trump CNN. Donald Trump would never approve such a deal.”  With Trump in office, the DOJ moved to block it.\nIn 2017, the DOJ went to court tocomplainthat the merger would “substantially lessen competition in video” by allowing AT&T to “use Time Warner’s ‘must have’” networks like CNN, TNT, TBS, and HBO to raise fees charged to rival cable TV distributors like Comcast or DISH. AT&T, which had acquired national satellite operator DirecTV, could threaten “blackouts” depriving rival distributors of key programs—their subscribers would then quit and flock to DirecTV (AT&T) so as to keep watching CNN or the NBA Playoffs on TNT. Not only would major TV and cable systems be hurt, but emerging online streaming services would be crushed.\nThe government’s case focused on “vertical leveraging,” where a company uses two complementary products to make it more difficult for rivals to compete in the individual markets. Here, AT&T was combining video content creation with video program distribution; the allegation was that competitors in either segment might be hurt. Yet there are clear efficiencies to be had, as widely found in studies of vertically integrated firms, with joint operations boosting consumer happiness. Buyers at Costco eagerly snap up Costco-supplied Kirkland products—which the retailer stocks in place of those of some independent producers—if they improve price or quality. So facts, not just a story, are needed.  District Court Judge Richard J. Leonfoundthat the DOJ case “falls far short of establishing the validity of its… theory.”\nAside from the political overtones of the case, there was good historical reason to doubt the official complaint. A cable TV programmer combined with (or split from) a video distributor several times in recent years. Vertical integration did not cause higher prices, as shown by econometric analysis. Nor did vertical integration lead to “blackouts,” as the DOJ conceded. A three-judge panel of the D.C. Circuit confirmed Judge Leon’s opinion, finding that “the industry had become dynamic in recent years with the emergence, for example, of Netflix and Hulu.”\nOwning DirecTV and Time Warner together turned out to be not much advantage, let alone a monopoly. Despite a huge boost in pandemic demand for video content, rivals soon dined on AT&T-Time Warner’s lunch. When AT&T bought DirecTV in 2015, it paid $67 billion. In February 2021, with DirecTV’s satellite subscriber base collapsing, the spun-off operation wasvaluedat $16.3 billion.\nAnd AT&Tthen unloaded the video assets of Time Warner. A new enterprise—Warner Bros. Discovery—is being spun off and merged with Discovery (Discovery Channel, Animal Planet, TLC, HGTV, the Food Networkand more). The content-only firm voluntarily severs the link the DOJ critiqued as easy monopoly money. With the allegations of anticompetitive bundling, it has been cast off as not worth the trouble.AT&T shareholders receive $43 billion, less than half the $100 billion AT&T expended (in debt and equity) for Time Warner three years ago. The government’s scenario of anti-competitive vertical integration proved a fantasy.\nAT&T’s maneuvers deserve whatever scorn billions in shareholder losses can buy. A cynic might offer that antitrust laws be beefed up to protect against such corporate errors, ignoring that economic penalties—more reliable and harsher than whatever antitrust enforcers might deal—are visibly in place. But little note has been made of the ironic political saga. Policymakers are moving full throttle to enact statutes to beef up antitrust prosecution in tech for exactly what AT&T so spectacularly failed to do in video.  Rep. Pramila Jayapal (D-Wash.) and Rep. Lance Gooden (R-Texas) introduced the “Ending Monopoly Platforms Act” that would restrict vertical mergers in online services, for example. At least five other bills for new antitrust rules have been introduced.\nNot only can such policies be expensive legal diversions, they can block the innovations igniting exciting new choices for customers. Netflix has integrated from streaming into movie production, after launching Roku. Hulu was created by News Corp. (Fox) and NBC-Universal (Comcast). Amazon Prime Video, Sling, YouTube TV, Apple TV, Disney Plus, HBO Max and Paramount Plus—each has extended a large media or e-commerce platform. Each evolved from a quest for better products. Treating entrepreneurship as suspect puts the screws to just the disruptions now roiling online entertainment markets. AT&T learned the hard way that owning complementary products is no guarantee of success.","news_type":1},"isVote":1,"tweetType":1,"viewCount":522,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":808049789,"gmtCreate":1627546807541,"gmtModify":1703492084662,"author":{"id":"3572467863337252","authorId":"3572467863337252","name":"Jaywei","avatar":"https://static.tigerbbs.com/beccce245458fd51f01db3fd362d9d9c","crmLevel":6,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3572467863337252","authorIdStr":"3572467863337252"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/PDD\">$Pinduoduo Inc.(PDD)$</a>Good good gogoo","listText":"<a href=\"https://laohu8.com/S/PDD\">$Pinduoduo Inc.(PDD)$</a>Good good gogoo","text":"$Pinduoduo Inc.(PDD)$Good good gogoo","images":[{"img":"https://static.tigerbbs.com/3a803fd2def3cf011cfc510499e19dfa","width":"1170","height":"2026"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/808049789","isVote":1,"tweetType":1,"viewCount":689,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":803704720,"gmtCreate":1627461441560,"gmtModify":1703490413371,"author":{"id":"3572467863337252","authorId":"3572467863337252","name":"Jaywei","avatar":"https://static.tigerbbs.com/beccce245458fd51f01db3fd362d9d9c","crmLevel":6,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3572467863337252","authorIdStr":"3572467863337252"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/TIGR\">$Tiger Brokers(TIGR)$</a>Let’s go ?&nbsp;","listText":"<a href=\"https://laohu8.com/S/TIGR\">$Tiger Brokers(TIGR)$</a>Let’s go ?&nbsp;","text":"$Tiger Brokers(TIGR)$Let’s go ?","images":[{"img":"https://static.tigerbbs.com/8cd0f5634979d1942a82bf62be8075a4","width":"1170","height":"2026"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":7,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/803704720","isVote":1,"tweetType":1,"viewCount":628,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":171124267,"gmtCreate":1626720438759,"gmtModify":1703763947025,"author":{"id":"3572467863337252","authorId":"3572467863337252","name":"Jaywei","avatar":"https://static.tigerbbs.com/beccce245458fd51f01db3fd362d9d9c","crmLevel":6,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3572467863337252","authorIdStr":"3572467863337252"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/SOFI\">$SoFi Technologies Inc.(SOFI)$</a>Like and comment","listText":"<a href=\"https://laohu8.com/S/SOFI\">$SoFi Technologies Inc.(SOFI)$</a>Like and comment","text":"$SoFi Technologies Inc.(SOFI)$Like and comment","images":[{"img":"https://static.tigerbbs.com/c18a3433d1956d5af07ad0f3dd8e4d91","width":"1170","height":"2026"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/171124267","isVote":1,"tweetType":1,"viewCount":588,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0}],"defaultTab":"following","isTTM":true}