REcode.net : One Snap metric to watch: How much money is generated by each of it

One Snap metric to watch: How much money is generated by each of its users
Snap’s revenue per user will be key if the company wants to paint a pretty picture for Wall Street

Snap’s strategy when it comes to growing its business is more about quality than quantity.

That is, Snap believes it can grow its business by generating substantially more revenue from each of its existing users — a strategy that would mean sales go up even if its user base doesn’t grow at the same rate.

The best way to measure if that strategy is actually working is a metric called ARPU, or the average revenue [generated] per user. When Snap filed for an IPO earlier this year, it specifically mentioned ARPU as a key way to measure its revenue growth, and the company explained that it was primarily focused on adding new users in developed advertising markets to help bolster this number.

The thinking: Snap can make a lot more money from a new user in the United States than it can from a new user in Vietnam. So that’s where it’s focused on growing.

When the company reports its second-quarter results this Thursday, Aug. 10, ARPU will be a key number to look for to see if this strategy is working.

So how is Snap’s ARPU doing? And what would constitute as a positive report?

RBC Capital’s Mark Mahaney believes Snap will report ARPU of $1.19 per user in Q2, growth of 138 percent year over year. That’s a big jump, but actually slower growth than Snap has reported the past two quarters. In Q1, ARPU almost tripled year over year. It more than tripled in the fourth quarter of 2016, to $1.05.

For some perspective, let’s compare Snap’s ARPU to the company that Snap would love to emulate: Facebook. Leading up to Snap’s IPO, those close to the messaging company even argued that Snap’s users could one day be as valuable as Facebook’s users.

It’s a little tough to match the two, though, because of missing data. When Facebook was the same size as Snap, back in late 2009, it was still a private company — and those quarterly revenue figures weren’t broken out when Facebook eventually filed to go public.

The earliest ARPU we can calculate for Facebook is for Q4 2010, when it generated $2.24 per daily user. But Facebook was more than twice Snap’s size by then, as measured by daily users, and scale really matters in the ad industry, so it’s not a particularly valid comparison.

In the quarter that Facebook went public, its ARPU was $2.14, or more than double what Snap’s was in the quarter it went public — $0.90. You could argue that this is a sign that Snap rushed its IPO, but that’s a conversation for later.


The good news here: If all goes according to plan, ARPU for Snap can go much higher. Facebook’s most recent quarterly ARPU in the U.S. and Canada as calculated with DAUs: $24.90. Snap’s ARPU for the same region: $1.81. So there is a lot of room for growth, and unlike Facebook, Snap’s ARPU was steadily increasing in the year leading up to its IPO.

Join us for live coverage of Snap’s earnings on Thursday.

SKy News : VAT refund giant Global Blue picks banks to handle £3bn flotation

VAT refund giant Global Blue picks banks to handle £3bn flotation
Silver Lake and Partners Group have picked three Wall Street banks to handle a float valuing Global Blue at £3bn, Sky News learns.

The VAT refund giant which pioneered the concept of tax-free shopping has picked advisers to steer it towards a flotation that will have major stock exchanges around the world scrambling to secure its listing.

Sky News has learnt that Global Blue, which is controlled by the investment funds Silver Lake and Partners Group, has lined up Goldman Sachs, JP Morgan and Morgan Stanley to work on an initial public offering (IPO).

A flotation would be expected to value Global Blue at well over £3bn, although a precise valuation is unclear.

The company's owners want to take advantage of an explosion in demand from international shoppers for its services, which include tax-free retailing in more than 300,000 shops globally.

Global Blue also provides a currency conversion service enabling merchants to offer customers the choice of paying for goods in their domestic currency when travelling abroad.

Sources said that the company's owners were expected to consider a listing in London, New York or Asia, with Chinese consumers accounting for a growing share of Global Blue's revenues.

It recently acquired a stake in EuroPass, which has a tie-up with the Chinese social media platform WeChat.

In total, Global Blue operates in 51 countries and employs 1900 people.

According to the company, it powered 32 million tax-free shopping transactions in the year to March, as well as 21.5 million currency conversion transactions - equating to an overall value of €20.5bn in sales.

A Global Blue spokesman declined to comment on Monday.

FT : US markets in quietest period for 90 years

US markets in quietest period for 90 years


Even the markets deserve a holiday.

As traders jet off on their (now shorter) breaks, it appears the markets are taking a breather too.

US markets are at their quietest since 1927, according to Deutsche Bank, with the S&P 500 recording no fewer than 12 successive closes with moves of less than 0.3 per cent in either direction. Things haven’t been this dull for 90 years.

This is becoming a habit: Deutsche also pointed out earlier this year that currencies were in a deep slumber.

WSJ : Hedge-Fund Manager’s Bearish Bets Backfire Again

Hedge-Fund Manager’s Bearish Bets Backfire Again
Crispin Odey’s positions in stock markets have fared poorly

Crispin Odey, one of Europe’s best-known hedge-fund managers, ran up a 10% loss in one of his hedge funds last month, in what is fast turning into a bad year for some big-name managers.

The European fund run by Mr. Odey, founding partner of London-based Odey Asset Management LLP which manages $5.9 billion in assets, experienced a 9.8% fall in its net asset value during July, according to an investor document seen by The Wall Street Journal. The fund is down 12% in the year through July.

Mr. Odey’s European fund was once one of the biggest in the sector, worth billions of dollars in its own right, though some investors withdrew their cash after poor returns in the past two years. According to an April letter to investors, the fund held just under $900 million in assets at the end of March.

A spokesman for Odey declined to comment.

Mr. Odey, a veteran trader who made millions betting on a recovery in Barclays Bank PLC in the immediate aftermath of the financial crisis, has fared less well in recent years as his bearish views have failed to pay off in rising markets.

The latest poor performance stems in part from bets on falling stock prices, particularly in the U.S., where the Dow Jones Industrial Average rose above 22000 for the first time last Wednesday. Mr. Odey’s fund has also bet against stocks such as Tullow Oil PLC, which climbed 13% during July, and specialty insurer Lancashire Holdings , which rose 6%, according to the investor document. The fund was positioned against the British pound, which climbed against the dollar, and against gilts, which also rose.

Mr. Odey isn’t the only big-name hedge-fund manager struggling this year.

Oil trader Andrew Hall said last week he is shutting the main fund at Connecticut-based Astenbeck Capital, the firm he founded. Mr. Hall posted losses when he misjudged the impact of a boom in U.S. oil production on oil prices.

Brevan Howard, one of Europe’s biggest funds, has lost 3.8% at its main fund through July, said a person familiar with details of the fund’s performance. Caxton Associates, which manages funds worth around $6.5 billion, has lost 11% in its main fund this year, said one of the fund’s investors.

Funds in the $3.1 trillion hedge-fund industry are on average up 3.6% between Aug. 2 and the start of the year, according to Chicago-based data group HFR.

(TechCrunch) SoftBank transfers its $5B stake in Nvidia to the Vision Fund

SoftBank transfers its $5B stake in Nvidia to the Vision Fund

SoftBank has confirmed that its 4.9 percent stake in Nvidia is to be transferred to the Vision Fund, its colossal investment vehicle that’s targeting a $100 billion final close.

The Japanese tech firm bought the position in chip-maker Nvidia, which has forayed into AI and self-driving car tech in recent years, back in May for a reported $4 billion. The Vision Fund held the rights to acquire that asset and the transfer was confirmed today in a filing.

The price paid was never disclosed but, with Nvidia’s market cap nearly at $100 billion today, the shares are worth around $5 billion right now. Following the deal, the Vision Fund becomes Nvidia’s fourth largest shareholder.

Beyond Nvidia, the Vision Fund is also picking up SoftBank’s share of medtech startup Guardant Health, which raised $360 million led by SoftBank in May. There’s plenty of cross-over beyond those deals. Previously, Softbank sold one-quarter of ARM, the chip giant it acquired last year for north of $30 billion, to the Vision Fund.

That ARM deal is a key component to the interest in Nvidia. SoftBank CEO Mashayoshi Son explained that Nvidia’s involvement in the Vision Fund makes particular sense because of the relationship that it has with ARM, which licenses its chip design to Nvidia among others. Addressing investors and press at a Q1 earnings event, Son dedicated plenty of time to explaining the Vision Fund which, as he himself admitted, is quite like any other VC investment vehicle in tech today.

Beyond its sheer size, he said that the fund is about developing a group of the world’s best companies to capitalize on the coming “information revolution.” Son explained that neither SoftBank nor the fund will look to take majority ownership in companies or invest strictly for profit, rather the goal is to develop a portfolio of top tech firms that can explore partnerships and synergies to grow together.

“We are ready to create this group and Nvidia is part of that,” he said.

Back when the Vision Fund announced its first close of $93 billion — that also happened in May, it was a busy month — SoftBank disclosed that the fund has the right to buy its stakes in ARM, Nvidia and Guardant Health, as well as Intelsat, OneWeb and SoFi. Expect more share swapping between the two entities going forward.

SoftBank’s other transactions may soon include its first ride-sharing investment in North America, too. Son revealed his intention to cut a deal with either Uber of Lyft — he said a decision hasn’t been made on which one yet. SoftBank is already the majority investor in Didi Chuxing (China), Ola (India), Grab (Southeast Asia) and 99 (Latin America).

>>> US Gapping down


Gapping down
In reaction to disappointing earnings/guidance:

  • BSFT -4.1%, BRK.B -1.1%, AVXL -1%, NAT -0.5%

M&A news:

  • FMS -1.7% (to acquire NXTM for $30/share)
  • UTX -1.2% (reports of potential deal with COL)

Other news:

  • ZYNE -48.5% (announces top-line results from its Phase 2 STAR 1 (Synthetic Transdermal Cannabidiol for the Treatment of Epilepsy) clinical trial evaluating ZYN002g)
  • GEMP -31% (announces data based upon its preliminary review of the limited top-line data set from the Phase 2b ROYAL-1 trial)
  • CLSN -7.1% (announced that it is taking steps to voluntarily delist the Company's common shares from trading on the Tel Aviv Stock Exchange)
  • AMRS -3.1% (files for 42,268,338 share common stock offering by selling stockholders)
  • CERS -1.2% (files for $250 mln mixed securities shelf offering)

Analyst comments:

  • TEVA -3.5% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
  • IPI -3.4% (downgraded to Sell from Neutral at UBS)
  • BBRY -2.6% (resumed with a Sell at Goldman)
  • SABR -1.7% (downgraded to Underperform from Neutral at BofA/Merril)

>>> US Gapping up


Gapping up
In reaction to strong earnings/guidance:

  • III +19%, HZNP +16.1%, KOS +5%, CRNT +4.9%, SPNS +4.8%, GOGO +4.3%, FDC +4%, ON +3%, TSN +2.5%, RTTR +1.7%, FOLD +1.2%, CNNX +0.5%

M&A news:

  • NXTM +39.1% (to be acquired by Fresenius Medical Care (FMS) for $30.00 per share)
  • COL +6.7% (reports of potential UTX deal)

Other news:

  • MYOK +33.5% (announces 'positive' topline data from the first patient cohort of its Phase 2 PIONEER-HCM study; also reported earnings)
  • EROS +22% (report that the company is in talks with Apple (AAPL) and other parties to sell its entire content library of films and music)
  • CLNT +14.3% (to purchase ECoin Redemption Codesg; signs an agreement w/ ECoin Global for the purchase of ECoin redemption codes with an aggregate value of $50 million for total consideration of $20 million)
  • KDMN +13.6% (granted orphan drug designation by the FDA for tesevatinib for the treatment of non-small cell lung cancer with epithelial growth factor receptor-activating mutations)
  • CYCC +8.3% (selects a recommended Phase 2 dose from part 1 of a dose-escalating, Phase 1, first-in-human, clinical study of CYC065)
  • SODA +1.1% (continued strength)
  • MASI +0.9% (provides study results for SpHb in trauma patients with low hemoglobin levels)

Analyst comments:

  • LLL +2% (added to Conviction Buy List at Goldman)
  • GRUB +1.8% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • DE +1.5% (added to Conviction Buy List at Goldman)
  • CLH +1.2% (upgraded to Equal Weight from Underweight at Barclays )
  • NICE +1.1% (target raised to $84 from $76 at Chardan Capital Markets)

>>> US Early premarket gappers


Early premarket gappers

Gapping up:

  • NXTM +37.4%, HZNP +20.9%, III +19%, MYOK +16.6%, CLNT +15.4%, XNET +8.6%, KOS +5%, SPNS +4.8%, GOGO +4.3%, GOGO +4.3%, FDC +4%, ON +3%, PHIIK +2.2%, RTTR +1.7%, NTNX +1.6%, FOLD +1.2%, SODA +1.1%, NICE +1.1%, MU +1.1%, TSEM +0.9%, JD +0.9%, MASI +0.9%, AMD +0.6%, NVDA +0.5%, CNNX +0.5%, CMRX +0.5%

Gapping down:

  • ZYNE -47.6%, GEMP -39%, CLSN -7.1%, MYL -3.7%, BBRY -3.7%, CRNT -1.8%, LPSN -1.1%, AVXL -1%, NAT -0.5%