Traders are swarming Facebook shares, buying options to take advantage of the tech company's volatile stock prices. Gunjan Banerji reports in The Wall Street Journal: The tumble in Facebook Inc.’s FB -1.45% shares has triggered frenzied trading of the company’s options, including contracts that pay out if the stock falls more than 30% or regains most of its losses. The social-media company’s shares rose 0.7%, to $169.39, Wednesday but have slumped 8.5% this week after reports that the data of up to 50 million users was transferred to an analytics firm tied to President Donald Trump’s … [Read more...]
Digital Ads a Waste Says P&G
Despite projections that the market for digital advertising will grow to $120 billion by 2021, the world's biggest advertiser, P&G is opting for different ways to reach customers. Writing in the Wall Street Journal, Suzanne Vranica reports that P&G cut its digital advertising budget by $100 million in the second half of 2017. With new data, P&G discovered it wasn't getting what it wanted out of its ads. Vranica writes: Once armed with more measurement data, P&G discovered that the average view time for a mobile ad appearing in a news feed, on platforms such … [Read more...]
Where’s the Value in this Market?
Value may be difficult to spot if you load your portfolio with market capitalization weighted exchange traded funds like those that track the S&P 500. Apple, Amazon, Facebook, Microsoft, and Google, the top five components of the S&P 500, trade at an average P/E of 84X and a median P/E of 29X earnings. One way to think about P/E is the number of years it would take to earn back your investment at the current rate of profit. Worse than the elevated P/E of the S&P 500 and its top constituents is the average dividend yield of the top five. America’s five biggest companies pay an … [Read more...]
Will Houseparty Dethrone Facebook?
Facebook is declining in popularity among U.S. teens. The platform has lost 10 percent of its users aged 12-17 according to eMarketer. Ben Rubin, a 30-year old tech entrepreneur has developed a group video chat app that is gaining in popularity with teens. Can Houseparty replace Facebook? The FT reports on Rubin’s goals for his app: Two years ago he landed on the idea for Houseparty, where groups of up to eight friends gather to chat, moving in and out of “rooms” and meeting friends of friends. It has already hosted half a billion chats. The average time spent on the app has gone from zero … [Read more...]
Is There a Cloud Backlash Brewing in Tech?
Despite what seems to be relentless drive toward cloud computing by most of the major tech companies, including most importantly Microsoft and Amazon.com, there appears to be a backlash coming. The backlash is broken down into two parts: The first part is a backlash against the large cloud computing providers. Smaller firms working on what has become known as "edge" computing, are making their mark in the industry. The second part of the backlash to big cloud computing is a focus on local computing, being pushed most notably by Apple. Richard Waters explains the trend in the … [Read more...]
Has the World Seen Peak Facebook?
For the first time ever Facebook has reported that daily active users declined in the last quarter. In the last three months of 2017, time spent on the site declined by about 5%. Facebook shares took a hit, but recovered somewhat when Facebook executives outlined their plan to keep revenues up by increasing prices. The lower traffic comes at a time when there is increased scrutiny on the effects social networks and mobile technology are having on children, and even adults. Mark Zuckerberg has begun investigating how to make Facebook users experience better by emphasizing “meaningful … [Read more...]
Has Facebook Peaked?
Mark Zuckerberg announced this morning that Facebook is going to be making significant changes to its social media site. A growing number of Americans are disengaging from the platform because they are being bombarded with ads and auto-play, not to mention the feelings of anxiety and depression. Facebook’s answer is to feed more content from friends and family and less from advertisers and public sites. The changes are expected to decrease engagement, but Facebook maintains they will be good for the company long-term. Bloomberg has more. In a note earlier this week, Wieser reported … [Read more...]
Is 2017’s Most Popular Strategy in Peril?
After nine years of a bull market that has been aided by the most aggressive and sustained period of monetary stimulus in history (you didn’t forget about that did you?) index-based investing has become the go-to strategy for many investors. Year-to-date, EPFR estimates that globally, investors have dumped $436.5 billion into index funds. Actively managed funds have experienced net outflows of over $150 billion in the U.S. alone. Jack Bogle would likely be proud, but does index-based investing still make sense when a majority of the money being invested in funds is flowing to vehicles that … [Read more...]
$70 Million in Bitcoin was Stolen, Did Anyone Notice?
Judging by the seemingly unstoppable rise in the cost of bitcoin, it would appear no one even noticed that $70 million worth of the digital currency was stolen by hackers. The victim was the crypto-currency mining operation known as NiceHash. Steven Russolillo reports: Andrej P. Škraba, head of marketing at NiceHash, said to The Wall Street Journal that approximately 4,700 bitcoin had been stolen from a bitcoin wallet, an online account that stores the digital currency. Bitcoin wallets, like other online bank accounts, have been targets of hackers in the past. “It was a professional … [Read more...]
Remember the Last Time the Tech Sector Did This?
The last time the global tech sector outpaced the next best performing sector as much as it is this year was in 1999. This year alone the NASDAQ Composite has closed at a new record 67 times, so far. As Riva Gold reports in the Wall Street Journal, "Just eight companies—Facebook Inc., Apple, Amazon.com Inc., Netflix Inc., Alphabet Inc., Baidu Inc., Alibaba Group Holding and Tencent—have increased by $1.4 trillion in market cap in 2017, a sum roughly equivalent to the combined annual GDP of Spain and Portugal." Gold continues: While technology companies have helped take U.S. and some Asian … [Read more...]