212.00 +0.14 (0.07%)
After hours: 5:57PM EDT
|Bid||211.51 x 1000|
|Ask||212.18 x 900|
|Day's range||210.47 - 215.64|
|52-week range||164.57 - 284.50|
|Beta (5Y monthly)||1.09|
|PE ratio (TTM)||48.37|
|Earnings date||27 May 2021|
|Forward dividend & yield||N/A (N/A)|
|1y target est||276.18|
(Bloomberg) -- Twitter Inc. has stepped up its pace of acquisitions in recent months after years of languid deal-making, a change that reflects the social network’s stronger financial standing and a renewed effort to speed up the addition of new features.Last week Twitter announced the purchase of news reader service Scroll with a goal of adding the product to an eventual subscription offering for its social network. The deal was Twitter’s sixth announced so far this year, and the seventh since December.While many of Twitter’s transactions have been small and driven by a desire to quickly add more employees or technical expertise, Twitter’s activity this year is markedly different from 2017 and 2018, when the company completed just one public acquisition in two years. Twitter, which a few years ago was itself a buyout target, is also taking bigger swings, and has been part of the conversation around higher-profile deals since last year, including efforts to acquire Discord Inc., Clubhouse and even TikTok.The shift is part of a concerted push to launch products at a faster rate, following the admission from Chief Executive Officer Jack Dorsey in February that the company has been dragging its feet for years on new tools for its platform. Twitter set out to double its “development velocity” and the “number of features per employee” that affect revenue and user growth, and acquiring teams and products that align with the company’s plans bolsters that effort.“The pace has picked up as our hiring needs have picked up, as our clarity has picked up, as our investing levels have picked up,” Chief Financial Officer Ned Segal said of the acquisition strategy in an interview. “It shouldn’t surprise you or others to see our name mentioned around things big and small.” He declined to comment on specific deals.Twitter’s six purchases so far in 2021 -- less than halfway through the year -- are the most the company has made in a calendar year since 2015, when it publicly announced eight acquisitions. Many this year have been directly related to Twitter’s effort to build a subscription offering, which would generate revenue outside of the main advertising business.In addition to Scroll, Twitter acquired startup Revue with plans to build out a subscription newsletter business. Other employees added through deals this year are working on “super follows,” or letting Twitter accounts charge followers for special content or access. Twitter will eventually take a cut of these subscriber fees, providing the company with a more predictable revenue stream than its current advertising business.This focus on a specific product road map seems to be the most likely explanation for Twitter’s flurry of deal activity, said Mark Shmulik, an analyst at Sanford C. Bernstein. At Twitter’s Analyst Day presentation in February, the plan outlined was the “most put together and coherent” he’d ever seen from the company, he said.“It all starts with the clarity of ‘where is the North Star and how are we getting there?’” Shmulik said. “For a long time, they didn’t really have that.”Adding startups to help with new consumer features is the most likely reason for Twitter to make deals moving forward, said Mandeep Singh, a technology analyst at Bloomberg Intelligence. He pointed to commerce and augmented reality as industries where rival social media platforms like Facebook Inc. and Snap Inc. are currently invested.Singh also suggested that Twitter should look at advertising technology startups for possible deals. The company spent the past few years telling investors it plans to improve its direct response advertising business -- essentially helping advertisers drive specific outcomes, like an app download. Twitter could benefit from adding more employees or technology to help it catch up with competitors in this space. “That is one area where they would want to close the gap,” he said.Perhaps just as noteworthy are the deals Twitter hasn’t made, but has been interested in, which show the company is considering adding a new product outside of its core social media service for the first time in years.The company tried to acquire Discord, the video-game chat company that rejected a $12 billion bid from Microsoft Corp. last month. Twitter also attempted to buy the audio-chat app Clubhouse for $4 billion, and is now building its own rival product, called Spaces. The San Francisco-based social network was also one of the many interested companies bidding on TikTok’s U.S. operations last summer, though it is likely Twitter would have been a smaller partner in any transaction for the popular video-sharing app.It’s possible Twitter could benefit from the current regulatory climate. Facebook Inc. and Google, always considered top acquirers for any consumer technology deal, are both under intense antitrust scrutiny in Washington, making it less likely either company could get a sizable deal through the regulatory process. Facebook is confronting government threats to unwind its past deals for Instagram and WhatsApp.Twitter, which is much smaller than its digital advertising competitors, has almost $9 billion in cash or cash equivalents on its balance sheet, and a “board that’s supportive of our plan,” Segal said. Once a perpetual money-losing business, Twitter is now profitable.Still, Segal dismissed the idea that Twitter’s more aggressive stance on deals has anything to do with a weaker field of acquirers. “Even if the people with whom you are competing may change from one year to another, the amount of competition doesn’t change,” he says.It wasn’t long ago that Twitter itself was a possible takeout target after a dramatic internal restructuring, including the return of founder Dorsey to the helm in October 2015. At the time, Twitter was focused on downsizing as a means to attract a possible suitor. It laid off employees two years in a row, shuttered its video app Vine, and sold off its developer products to Alphabet Inc.’s Google.Buyout interest from a range of companies, including Salesforce.com Inc. and Walt Disney Co., failed to result in a deal, and Twitter was left with a smaller staff but fewer side projects left to distract them.And just because Twitter is exploring a big acquisition doesn’t mean it will land one. The main reason a Twitter deal for Discord never progressed is that the interest was one-sided, according to people familiar with the talks. Any deal for Discord, Clubhouse or ByteDance Ltd.’s TikTok would dwarf the company’s most expensive purchase ever -- a $479.1 million ad-tech deal for TellApart in 2015 -- and most of the acquisitions Twitter is making are so small that pricing isn’t required to be disclosed.“I don’t know if they’ve won the right or earned the right from investors to go down that path” to a multibillion-dollar deal, Shmulik said. If Twitter does stay active, he expects that it will go after companies that fit with product plans around creators and helping Twitter users make money from the service. “It’s all about reducing time to market,” he said.Segal said Twitter isn’t done shopping.“We don’t see anything that will slow down our pace,” he said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
IBM is doubling down on hybrid cloud and artificial intelligence as CEO Arvind Krishna takes steps to modernize the legacy company’s tech business.
(Bloomberg) -- International Business Machines Corp. is rolling out a new product that will help businesses automate tasks, capitalizing on the rise of chat bots and virtual assistants during the pandemic and taking another step in its pivot toward cloud services and artificial intelligence.The tool, called Watson Orchestrate, uses artificial intelligence to select and sequence the prepackaged skills needed to perform a task across sales, human resources, or operations functions. It will be compatible with Slack Technologies Inc. and email as well as connect to business applications like Salesforce.com Inc., SAP SE and Workday Inc. The product is expected to be available later this year.“We will look back on this year and last as the moment the world entered the digital century in full force,” said Chief Executive Officer Arvind Krishna in a statement. “In the same way that we electrified factories and machines in the past century, we will use hybrid cloud to infuse AI into software and systems in the 21st century.”Watson Orchestrate is one of a slate of new offerings and initiatives IBM is unveiling at its annual Think Conference, where its evolution from century-old company into a modern enterprise will be on full display. The pandemic accelerated the adoption of cloud services, a trend Krishna has been keen to optimize since he took over as CEO last year, and as part of an effort to revive growth after years of shrinking revenue.IBM is focusing on what it calls hybrid-cloud, which allows companies to use a combination of their own data centers and computing resources leased from others and accessed online. The strategy fueled IBM’s 2019 acquisition of Red Hat, a deal Krishna helped arrange, for about $34 billion. IBM is also betting that corporate users will adopt AI in more of their systems.The Armonk, New York-based company partnered with Ernst & Young LLP to create a hub that will focus on offering regulatory compliance, digital trust and security services to financial services companies through IBM’s hybrid cloud platform. IBM is also adding an upgrade to its Cloud Pak for Data service that the company said will generate answers to queries eight-times faster, and it’s rolling out Project CodeNet, an open source dataset with millions of lines of code to speed up businesses applications of artificial intelligence.The new offerings come on the heels of IBM introducing its 2 nanometer chip, which is the world’s smallest and first chip of that size. IBM is working closely with Samsung Electronics Co Ltd. and Intel Corp. to bring the chips to market, Krishna said on a call with journalists, adding that the ongoing semiconductor shortage is “very worrisome.”Watch: IBM Unveils World’s Smallest, First 2 Nanometer Chip (Video)IBM’s rivals, including Microsoft Corp. and Alphabet Inc.’s Google, have also been moving to expand the use of AI for cloud computing customers across a variety of industries. Microsoft, for example, introduced new tools last year for doctors to use chat bots to more easily communicate with patients. Google announced a tie-up in February with Ford Motor Co. that will provide data analytics to the factory floor and let drivers use voice-recognition technology in their cars. Cloud software maker ServiceNow Inc has acquired several AI companies to refine products that help clients automate numerous personnel, customer service and information technology tasks.Krishna reaffirmed IBM is “on a path to sustained mid-single digit growth over the medium term,” and that the new offerings would eventually translate into revenue growth as clients increase adoption.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.