The Ghost of Snap and Trump's big DWAC.
The past week, Snap Inc. caused an uproar on markets and just what did Trump do again?!
Hey, Hisa fan,
What a week that was! The financials continued to trickle in and just like old times, some we lose, some we win!
The Snapchat Hit!
Snap Inc, the company that owns the social media platform Snapchat was on the week’s verge of a financial bombshell, opening up a pandora box for analysts to look into the next earnings frontier for listed companies.
Snapchat had indicated in its earnings that it had fallen short of Ad revenues as it could not track user data and thus Ad targeting which the company uses was sort of “useless.” Those rules make it more difficult to gather information from users and target ads.
The company also said during the release that Advertisers were under immense pressure from the pandemic and supply chain disruptions, which limited their spending.
Snap’s revenue grew 57% to $1.07 billion which was $93 million short of analysts expectations.
The company posted a net loss of $71.9 million.
Operating leverage gained ground in 3Q2021 with the company’s free cash flow reaching positive $52 million from negative $70 million in 3Q2020.
Adjusted earnings per share stood at $0.17 vs. the 0.8 posted on analysts estimates.
Global daily active users (DAUs) was at 306 million for 3Q21.
The average revenue per user (ARPU) stood at $3.49 for 3Q21 compared to a $3.67 per StreetAccount
The Snap Hit on Tech
The effect on Snap Inc hit on tech companies that have for long depended on Ad targeting to generate revenues, sending a warning to investors who had shareholding on tech companies.
Stocks in Numbers
Facebook [NASDAQ: FB] shares have traded as high as $384.33 and as low as $244.61 over a 52-week period. The shares closed Friday with a 5.05% decline at $324.61 per share.
Aphabet Inc [NASDAQ: GOOG] the parent company for Google and related companies had the class A shares down 3.04% on Friday at $2751.33 per share.
Twitter Inc., [NASDAQ: TWTR] was down 4.83% to close the week at $62.24 per share.
Snap Inc [NASDAQ: SNAP] shares were down 26.59% to end the week at $55.14 per share.
Coffee Break…Is Trump’s SPAC Magnetic?
Former U.S President Donald J. Trump sure doesn’t take bans lightly. See, just before he was dethroned off his presidential status, Trump faced one of the worst embarrassments a President could have globally; forget Iran or Walking in front of Melania, Trump was banned from Social Media!!
After the ban, Trump threatened to launch his own social media and last week he did more than that, with his new plan to take on Big Tech and “create a rival to the liberal media” with his own social media company.
Trump’s company said it was going public by merging with Digital World Acquisition Corp. (aka DWAC), a special purpose acquisition company (aka SPAC — or blank check company).
DWAC shares more than 846% in value this week, from $9.95 to 940.20, the company’s stock became the most traded stock on the Nasdaq and NYSE, changing hands 470 million times!
So, what’s it going to be, will Trump triumph?
On Markets…
The global market front was under pressure after Federal Reserve Chair Jerome Powell said the U.S. central bank was “on track” to begin reducing its purchases of assets. This could be a trigger for other global banks to begin tapering and also pose a case for interest rates.
For markets, the Dow Jones Industrial Average posted gains for the week, with a 1.1% gain to 35,677.02, the S&P 500 was up as well for the week 1.6%, to 4,544.9 while the Nasdaq Composite followed the uptrend despite the earnings, adding 1.3% during the week to close at 15,090.20 basis points.
The local markets space was largely on the red as some of the previous gainers retreated from previous highs.
The benchmark all share index of the Nairobi Securities Exchange [NASI] decreased by 0.18% to close the week at 178.54 points from last week’s figure of 178.86 points. The NSE20 and the NSE25 share indices were similarly on the decline, shedding 0.49% and 0.05% to close the week at 1,960.75 points and 3,867.27 points respectively.
The market turnover was however on the rise, posting a 53.21% growth at Kes 3.21 billion from the Kes 2.10 billion posted a week earlier. The volume of shares exchanging hands on the bourse was equally higher, with a 33.39% growth to 73.22 million shares from the 54.89 million shares transacted a week earlier.
What cowries are we collecting this week?
Facebook Inc. [NASDAQ: FB] - Apple Inc, Microsoft Corp, Google parent Alphabet Inc, Amazon.com Inc and Facebook Inc are all set to report earnings this week, but FB will be an investors’ watch. Facebook has in recent times faced major backlash from the public, from whistleblowers to outages and even a proposed name change.
PS: Don’t worry, we’ll keep an eye on all tech stocks.
The Boeing Company [NYSE: BA] - The Airline industry was one of the most affected areas during the pandemic. With some countries easing travel, how has this impacted flying hours for Boeing and just what will commercial deliveries spell for BA and other aircraft manufacturers?
U.S Government Treasury Yields - Treasury yields often move inversely to bond prices and may in the long term pose a threat to technology and other growth shares, with the Fed mentioning on the beginning of tapering, will the yields go up or is it a downward lane for this one?
How about you, what stocks are you watching for the week? Let us know on the Hisa App.
Disclaimer: This article does not constitute any investment recommendations. Investors and the general public are advised to do their own research before making any investment decision..