A woman stands in front of the logo of Snap Inc. on the floor of the New York Stock Exchange (NYSE) while waiting for Snap Inc. to post their IPO, in New York City, NY, U.S. March 2, 2017. REUTERS/Lucas Jackson/File PhotoRegister now for FREE unlimited access to Reuters.comReporting by Angelique Chen and Sheila Dang; Editing by Josie KaoOur Standards: The Thomson Reuters Trust Principles. .
Aug 15 (Reuters) – Snap Inc (SNAP.N), parent company of social media app Snapchat, has reached 1 million subscribers for its Snapchat+ premium subscription, the company said on Monday, afterlaunching the service in June as a new source of revenue.Social media companies including Snap, Twitter Inc (TWTR.N) and Meta Platforms Inc (META.O), which all earn the majority of revenue from selling digital advertising, are facing a weakening ad market due to record-high inflation causing brands to reign in their marketing spending.Snap’s shares dropped 25% last month after disappointing second quarter earnings, as it suffered from weaker advertising demand than Wall Street had expected. Chief Executive Evan Spiegel said the company would work to speed up revenue growth, in part through new sources of revenue. read more Register now for FREE unlimited access to Reuters.com Snapchat+, which costs $3.99 per month in the United States, offers access to 11 exclusive features not yet available to general users. Four new features announced Monday include new Snapchat app icon designs and the ability for subscribers to have their messages be more visible to celebrities on Snapchat. Subscribers can also use Snapchat on desktops.The paid subscription feature is now expanding to more countries including Saudi Arabia, India and Egypt, for a total of 25 markets, Snap said.Twitter, which is in a legal battle with billionaire Elon Musk over his attempt to walk away from his $44-billion deal to buy the company, also previously launched a $4.99 per month subscription product called Twitter Blue. Facebook and Instagram do not offer paid subscriptions as of now.Register now for FREE unlimited access to Reuters.comAppLovin offers to buy video game software maker Unity in $17.5 bln deal
People play “Pokemon GO” on the Pokequan GoBoat Adventure Cruise in the Occoquan River in the small town of Occoquan, Virginia, U.S. August 14, 2016. REUTERS/Sait Serkan GurbuzRegister now for FREE unlimited access to Reuters.comReporting by Eva Mathews and Nivedita Balu in Bengaluru, Krystal Hu in New York; Editing by Saumyadeb Chakrabarty and Mike HarrisonOur Standards: The Thomson Reuters Trust Principles. .
Aug 9 (Reuters) – Gaming software company AppLovin Corp (APP.O) made an offer on Tuesday to buy its peer Unity Software Inc (U.N) in a $17.54 billion all-stock deal, threatening to derail Unity’s announced plan to acquire AppLovin’s smaller competitor ironSource .AppLovin has offered $58.85 for each Unity share, which represents a premium of 18% to Unity’s Monday closing price. Unity will own 55% of the combined company’s outstanding shares, representing about 49% of the voting rights.AppLovin hired advisors to work out an offer after Unity last month said it would buy ironSource in a $4.4 billion all-stock transaction, sources familiar with the matter told Reuters. Unity’s board will have to terminate the ironSource deal if it wants to pursue a combination with AppLovin, according to the proposal.Register now for FREE unlimited access to Reuters.com Under the proposed deal, Unity’s Chief Executive John Riccitiello will become CEO of the combined business, while AppLovin Chief Executive Adam Foroughi will take the role of chief operating officer.Unity said its board would evaluate the offer. The company is slated to report its earnings after the bell on Tuesday.Both companies make software used to design video games. Game-making software has also been expanding to new technologies such as the so-called metaverse, or immersive virtual worlds.Unity’s software has been used to build some of the most-played games such as “Call of Duty: Mobile,” and “Pokemon Go”, while AppLovin provides helps developers to grow and monetize their apps.AppLovin’s offer comes as game developers and console makers warn of a slowdown in the sector as decades-high inflation and easing of COVID-19 restrictions lead gamers to pick outdoor activities. The company lowered its sales guidance on Tuesday.”The deal comes as surprise to everybody in the business,” said Serkan Toto, founder of game industry consultancy Kantan Games. “It’s a $15 billion company going after a $15 billion company. It’s a desperate attempt to consolidate and the chances of this deal happening are very slim.”Shares of Palo Alto, California-based AppLovin, which went public last year, fell 9.9% while those of Unity rose 1% in the morning trading session. Shares of ironSource were down 9.7%.Foroughi said the combined company will have the potential to generate an adjusted operating profit of over $3 billion by the end of 2024.Register now for FREE unlimited access to Reuters.comAnalysis: Brazil risk premium soars after Congress breaks spending cap
BRASILIA, July 22 (Reuters) – Brazilian fixed-income markets are pricing in the highest risk levels in years, raising red flags among investors and government officials who see little relief in sight.While global interest rate hikes and recession risks have put all emerging markets under pressure, Brazil faces special scrutiny after Congress cracked open a constitutional spending cap to allow a burst of election-year expenditures. read more “The problem is the change in the spending cap,” said an Economy Ministry official, who requested anonymity to discuss the situation openly. “It weakens the reading that the fiscal situation will be under control in the coming years.”Register now for FREE unlimited access to Reuters.comReporting by Marcela Ayres and Jose de Castro
Editing by Brad HaynesOur Standards: The Thomson Reuters Trust Principles. .
Wall St Week Ahead Recession fears loom over U.S. value stocks
A screen displays trading informations for stocks on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 27, 2022. REUTERS/Brendan McDermidRegister now for FREE unlimited access to Reuters.comReporting by Lewis Krauskopf, additional reporting by David Randall and Ira Iosebashvili; Editing by Ira Iosebashvili and Richard ChangOur Standards: The Thomson Reuters Trust Principles. .
NEW YORK, July 15 (Reuters) – Fears of a potential economic slowdown are clouding the outlook for value stocks, which have outperformed broader indexes this year in the face of surging inflation and rising interest rates.Value stocks – commonly defined as those trading at a discount on metrics such as book value or price-to-earnings – have typically underperformed their growth counterparts over the past decade, when the S&P 500’s (.SPX) gains were driven by tech-focused giants such as Amazon.com Inc (AMZN.O) and Apple Inc (AAPL.O).That dynamic shifted this year, as the Federal Reserve kicked off its first interest rate-hike cycle since 2018, disproportionately hurting growth stocks, which are more sensitive to higher interest rates. The Russell 1000 value index (.RLV) is down around 13% year-to-date, while the Russell 1000 growth index (.RLG) has fallen about 26%.Register now for FREE unlimited access to Reuters.com This month, however, fears that the Fed’s monetary policy tightening could bring on a U.S. recession have shifted the momentum away from value stocks, which tend to be more sensitive to the economy. The Russell value index is up 0.7% in July, compared with a 3.4% gain for its growth-stock counterpart.”If you think we are in a recession or are going into a recession, that does not necessarily … work to the advantage of value stocks,” said Chuck Carlson, chief executive at Horizon Investment Services.The nascent shift to growth stocks is one example of how investors are adjusting portfolios in the face of a potential U.S. economic downturn. BofA Global Research on Thursday cut its year-end target price for the S&P 500 to 3,600 from 4,500 previously and became the latest Wall Street bank to forecast a coming recession. read more The index closed at 3,863.16 on Friday and is down 18.95% this year.Corporate earnings arriving in force next week will give investors a better idea of how soaring inflation has affected companies’ bottom lines, with results from Goldman Sachs , Johnson & Johnson (JNJ.N) and Tesla among those on deck.For much of the year, value stocks benefited from broader market trends. Energy shares, which comprise around 7% of the Russell 1000 value index, soared over the first half of 2022, jumping along with oil prices as supply constraints for crude were exacerbated by Russia’s invasion of Ukraine.But energy shares along with crude prices and other commodities have tumbled in recent weeks on concerns that a recession would sap demand.A recession also stands to weigh on bank stocks, with a slowing economy hurting loan growth and increasing credit losses. Financial shares represent nearly 19% of the value index. read more An earnings beat from Citigroup, however, buoyed bank shares on Friday, with the S&P 500 banks index (.SPXBK)gaining 5.76%.At the same time, tech and other growth companies also tend to have businesses that are less cyclical and more likely able to weather a broad economic slowdown.”People pay a premium for growth stocks when growth is scarce,” said Burns McKinney, portfolio manager at NFJ Investment Group.JPMorgan analysts earlier this week wrote they believe growth stocks have a “tactical opportunity” to make up lost ground, citing cheaper valuations after this year’s sharp sell-off as one of the reasons.Value stock proponents cite many reasons for the investing style to continue its run.Growth stocks are still more expensive than value shares on a historical basis, with the Russell 1000 growth index trading at a 65% premium to its value counterpart, compared to a 35% premium over the past 20 years, according to Refinitiv Datastream.Meanwhile, earnings per share for value companies are expected to rise 15.6% this year, more than twice the rate of growth companies, Credit Suisse estimates.Data from UBS Global Wealth Management on Thursday showed value stocks tend to outperform growth stocks when inflation is running above 3% – around a third of the 9.1% annual growth U.S. consumer prices registered in June. read more Josh Kutin, head of asset allocation, North America at Columbia Threadneedle, believes a possible U.S. recession in the next year would be a mild one, leaving economically sensitive value stocks primed to outperform if growth picks up.”If I had to pick one, I’d still pick value over growth,” he said. “But that conviction has come down since the start of the year,” Kutin said.Register now for FREE unlimited access to Reuters.comFDA regulation of premium cigars ‘arbitrary and capricious,’ judge finds
- Judge finds agency ignored evidence in deeming premium cigars subject to same law as cigarettes
- Cigar groups, FDA will submit briefs on remedy
(Reuters) – The U.S. Food and Drug Administration’s decision to regulate premium cigars under the same federal law as other tobacco products like cigarettes was arbitrary and capricious, a federal judge ruled Tuesday.U.S. District Judge Amit Mehta in Washington, D.C., said the agency had ignored relevant data about the health risks of premium cigar use. He asked the FDA and the industry groups challenging the regulations — the Premium Cigar Association and Cigar Rights of America — to submit briefs on whether he should vacate the FDA’s decision or simply remand the matter back to the agency.”The family-owned manufacturers and retailers that make and sell premium cigars have long believed the FDA mishandled its decision to regulate premium cigars,” said Michael Edney of Steptoe & Johnson, a lawyer for the plaintiffs. “We are grateful for the court’s decision and the opportunity for further proceedings in this matter.”Register now for FREE unlimited access to Reuters.comReporting By Brendan Pierson in New YorkOur Standards: The Thomson Reuters Trust Principles.Brendan PiersonThomson ReutersBrendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at [email protected]. .
The FDA could not immediately be reached for comment.The litigation focuses on the so-called Deeming Rule adopted by the agency in 2016, in which it identified a wide range of tobacco products, including premium cigars, to be subject to its regulatory authority along with cigarettes under the Family Smoking Prevention and Tobacco Control Act.The plaintiffs said that the agency considered, and rejected, a carve-out for premium cigars, both before adopting the final rule and again in 2017 and 2018 when it solicited additional comments.They said FDA rules requiring cigar makers to register their products annually and provide ingredient lists for each product, and requiring all products be submitted for laboratory testing, were impractical for hand-made, “artisan” premium cigars.The industry groups said that, unlike cigarettes and e-cigarettes, premium cigars do not appeal to young people and are not associated with addiction. They cited studies showing that young people are unlikely to use premium cigars, that users of premium cigars are unlikely to smoke them frequently and that infrequent cigar use is not associated with increased mortality.Mehta on Monday agreed that the FDA had not adequately considered the studies cited by the plaintiffs, instead asserting that there was “no evidence” that premium cigars were less harmful without directly addressing them.”Where, as here, an agency speaks in absolute terms that there is no evidence, it acts arbitrarily and capriciously when there is in fact pertinent record evidence and the agency ignores or overlooks it,” the judge wrote.The case is Cigar Association of America v. U.S. Food and Drug Administration, U.S. District Court, District of Columbia, No. 16-cv-01460.For Premium Cigar Association and Cigar Rights of America: Michael Edney of Steptoe & JohnsonFor FDA: Garrett Coyle of the U.S. Department of JusticeRead more:Premium tobacco cos tell judge FDA rules don’t apply to artisan productsMedical associations back FDA in lawsuit over premium cigar rulesRegister now for FREE unlimited access to Reuters.com