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Meta Passes Apple's 30% Ad Boost Fee to Advertisers
+ Stock Ideas: Naspers | Perion Network | AppLovin
Kristoffer Lindström
February 19, 2024
Hello!
Today, we cover the news on how Meta aims to counter Apple’s 30% cut on boosted ads by pushing it directly to advertisers. We have also found three bullish tech stock ideas.
Enjoy!
TECH BRIEF
Meta Passes Apple's 30% Ad Boost Fee to Advertisers
Meta has announced that it will implement a 30% fee for advertisers seeking to amplify post visibility on Facebook and Instagram's iOS applications. The new initiative stems from a 2022 App Store update where Apple extended its 30% cut to boosted posts, typically a measure used by businesses, influencers, and various social apps to extend the reach of their content.
The fee will be collected upon purchasing a boost on Apple's iOS, with the tech giant retaining a 30% service charge before any taxes. The change, affecting small businesses and influencers specifically, is set to roll out in the US first, with plans for expansion to additional markets later in the year.
In a move to circumvent the Apple tax, Meta advises users they can continue purchasing boosts via desktop or mobile versions of Instagram and Facebook's websites. This move caters to the firm's concern over making the boosting feature less discoverable and depriving businesses of this promotional avenue.
Meta's new billing method requires users to add prepaid funds and make payments before publishing their boosted posts on its iOS apps. An extra 30% fee will be charged to cover Apple's preloading funds transaction cost in iOS.
Apple maintains that this system ensures the consistent application of digital goods and services transactions within apps, referring to boosting as a digital service. This comes amid Meta's criticism of Apple's business practices, as Apple also introduced a tax on alternative US payment methods and allowed EU developers to use alternative app stores in exchange for a “Core Technology Fee”.
📉 Nordic Stock Updates - Embracer's stock sees minor gains, following sharp declines due to the latest quarterly report, amid analyst revisions; JP Morgan downgrades, Goldman Sachs cuts target. Yet, buy recommendations persist, hinting at strong future prospects despite potential short-term debt challenges. Conversely, Sinch impresses with Q4 growth, driving positive analyst outlooks. Carnegie and DNB Markets forecast brighter earnings, underpinned by robust profit growth and stringent cost management, setting the stage for a promising Q1.
🚀 AI in Focus - OpenAI's market value has soared to $80 billion after sealing a deal with Thrive Capital, marking a striking growth from a previous valuation of $27 billion less than a year ago. This leap positions OpenAI as the third most valuable tech startup globally, trailing only ByteDance and SpaceX. In parallel, Reddit has finalized a $60 million agreement with an AI company for content licensing, paving the way for its anticipated initial public offering (IPO), which could see the company valued at around $5 billion. This strategic move leverages the burgeoning AI sector to potentially enhance Reddit's market appeal ahead of its IPO. These developments reflect a dynamic tech landscape where AI innovations and strategic partnerships are significantly boosting company valuations and reshaping market standings.
🚀 Crypto & Defense Shift - Crypto startup exits hit their lowest since late 2020, with only 12 in the last quarter of 2023, despite a slight uptick in venture capital investment. This trend underscores the challenging landscape for digital currency ventures amidst a broader venture capital downturn, particularly in web3 projects. Meanwhile, Silicon Valley pivots towards defense technology, fueling a funding frenzy driven by geopolitical tensions. Investments in military tech, including drone countermeasures and surveillance, are projected to soar, marking a significant shift towards national security interests. This juxtaposition highlights a dynamic reorientation in investment priorities, from digital currencies to defense innovation, reflecting broader economic and geopolitical realities.
STOCK IDEA - Naspers
Naspers Limited (NPSNY): Undervalued Due to Stake in Tencent Holdings and Broad Venture Portfolio, Sees 40% Upside (Seeking Alpha)
Naspers Limited (NPSNY) is seen as undervalued, with a 40% potential upside, due to its significant stake in Tencent Holdings and a diverse venture portfolio currently undervalued by the market. Despite Naspers' market cap being eclipsed by its Tencent holdings, its broad venture investments are negatively valued, which is deemed unreasonable. The company is leveraging substantial buybacks funded by reducing its Tencent stake, offering interim capital payouts as the market discount narrows. Analysts highlight the timely opportunity to invest in Naspers, as it monetizes Tencent's value into shareholder returns against a backdrop of market undervaluation and negative enterprise value (EV) concerns. Key risks include regulatory challenges in China's gaming sector. Naspers, a global investor in tech and digital sectors, benefits from scale advantages, network effects, and intangible assets through its vast investment portfolio.
Ticker: NPSNY | Price: $35 | Potential: 40% | Timeframe: 12-18 months | Source: Seeking Alpha
📈 Technology & Venture Capital | 🚀 Undervalued Giant | 📈 Bullish idea
📝 Analysis: Dig deeper into this stock idea: Financials, valuation, moat analysis, timing, and more…
STOCK IDEA - Perion Network
Perion Network (PERI): AI Advancements and Strategic Acquisitions Position the Adtech Firm for Parabolic Growth
Perion Network (PERI), a pioneering adtech firm, is poised for substantial growth due to its advancements in AI and strategic acquisitions. Despite a recent drop in stock value following Q4 earnings, the company's focus on AI, including the successful launch of its generative AI audio advertising program WAVE and the acquisition of Hivestack, positions it well for future success. With a projected revenue growth of 10% for 2024 and a valuation significantly below its peers at a P/E ratio of less than 11, Perion represents an undervalued opportunity. Investors are encouraged to consider Perion, especially now, as it gears up to introduce new products and features, leveraging its AI technology to dominate the adtech space.
Ticker: PERI | Price: $23 | Timeframe: 24 months | Source: The Motley Fool
🤖 AI & AdTech | 🚀 AI Ascendancy | 📈 Bullish idea
📝 Analysis: Dig deeper into this stock idea: Financials, valuation, moat analysis, timing, and more…
STOCK IDEA - AppLovin
AppLovin (APP): Strong Buy Due to Accelerated Revenue Growth and Improved EBITDA Margins
AppLovin (APP) is a compelling buy with its accelerated revenue growth and improved EBITDA margins, driven by the AXON 2 AI engine and a shift to real-time bidding, offering a strong growth trajectory and robust cash flow. The company's Q4 performance exceeded expectations, and it's well-positioned for a positive 2024. Valued at 10.2x 2024 EBITDA, with a fair value estimate of $70, it shows great promise compared to peers. However, potential risks include increased competition and reliance on the AXON 2 engine's success.
Ticker: APP | Price: $60 | Target: $70 | Source: Seeking Alpha
📱 Technology / Adtech | 🚀 Growth Surge | 📈 Bullish idea
📝 Analysis: Dig deeper into this stock idea: Financials, valuation, moat analysis, timing, and more…
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