by | February 15, 2017 · 10:00 am

Facebook are dealing with the music industry

Facebook has a lot of DAU`s and more and more people spend time watching videos. Facebook is a young company and so far they already have billions of video views. But Mark Zuckerberg want to prosper from this industry.

There is no doubt that YouTube is the most popular video-sharing company in the world. Many artist has started their carriere at YouTube and one of them is Justin Bieber. In 2016, YouTube gave the music industry $1 billion in ad revenue, and Facebook wants to join.

 

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Streaming was a game changer on how media is bought. It changed how it`s consumed. It also changed who profits from it, and of course how much they all made in this industry. For the first time in 20 years, the music industry saw significant revenue growth in 2015.

The revenue from streaming is $2,9 billion world-wide, and revenue from video on demand rose almost 9% in 2015, and music clips can move about $50 – $70 billion from TV industry.

Facebook has nearly 2 billion users and still a growing advertising business, and a deal with the music industry can be a win-win agreement, which means billions in revenue from new sales for the music industry.

The interest in videos is growing and Facebook want to prosper from that, and that’s why they are so interested in music rights. Facebook moved billions in ad revenue from print and now many online firms have targeted TV.

Facebook are not alone on the market and they need to share some of the market with Twitter and Snapchat, but the biggest of them all is YouTube which is Faecbooks main rival. Googles YouTube channel said music is one of the most popular types of videos on their on-demand service.

TV networks and News organizations are experimenting with Facebook, just like they did with YouTube and this will continue. This is interesting because Facebook is big.

Thanks to streaming, the music industry is growing again and that is because of the paid streaming services from Apple and Spotify.

Facebook will probaby sign a deal with the music industry before the summer this year.

 

trump100_b

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | February 9, 2017 · 10:00 am

Will Snapchat be the next Facebook?

Snap is going public. No, I`m not talking about the pop stars with the super hit “I got the power”. This is something different. A different power. But how powerful are Snap Inc actually? Do you really think that Snapchat will be the next Facebook?

Let`s take a closer look at some real facts. I have made a picture of some of the most loved firms in the social media universe, and this time I will compare Snap with Facebook and Twitter. As you can see from the chart below, Snap look more like Twitter than Facebook. Take a look below.

 

 

compared

 

 

As you can see from the chart above, Snaps cost follow Snaps revenue. Its positive to see that their revenue grew from $59 million to $405 million. Thats a whopping 590% over the same time. But the drawback is their high cost structure. Their net operating profit after-tax fell from -$344 million in 2015 to -$498 million in 2016.

You do already here understand that Snap is not the same as Facebooks business model. Revenue goes up while their profit goes down. Snaps valuation is about $20-25 billion, with a revenue of $405 million, and an operating loss of -$520 million.

Facebooks valuation when they went public was much higher with $3,7 billion in revenue, and an operation income of $1,75 billion. Facebooks valuation at that time was $90-105 billion, but as you may know, the stock traded down after the IPO.

You also may know the story of Twitter. Right up, and right down again. Will Snap follow Twitter? Take a look at the numbers. They are very similar. Revenue was $448 million, with an operating loss of -$93 million.

Twitters valuation at that time was $18-25 billion, but people said it was too much. Many investors said the right valuation was half of that; only $10 billion. Snaps trailing sales valuation was 62x, which is about the same as Twitter`s 56x.

Twitter had 100 million DAUs when they went public, while Snap has about 158 million. What is that compared to Facebooks 483? It will be hard to be a new Facebook.

Snap are going public on Thursday.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | February 3, 2017 · 10:00 am

The parent of Snapchat are going public

Snapchat is one of the biggest favorite apps in the social media universe at the moment. Its founders Evan Spiegel and Bobby Murphy filed confidentially to go public with SEC late last year, and now they are ready to be traded on the New York Stock Exchange under the ticker SNAP.

Snap`s revenue rose to $404,5 million, which is eight times higher than their revenue in 2015. In Q4 Snap had 158 million daily active users (up 48%), and many of my friends and family members are one of them. 2,5 billion Snaps are created every day.

 

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Snap Inc is a camera company, and in the SEC filings they say: “We blive that reinventing the camera represents our greatest opportunity to improve the way people live and communicate.

Our products empower people to express themselves, live in the moment, learn about the world, and have fun together».

Worldwide advertising spend is expected to grow from $652 billion in 2016 to $767 billion in 2020. The fastest growing segment is mobile advertising, which is expected to grow nearly 3x from $66 billion in 2016 to $196 billion in 2020.

Snap belive that one of the major factors driving this growth is the shift of people`s attention from their televisions to their mobile phones. According to Nielsen, people between the ages of 18 and 24 spent 35% less time watching traditional television in an average month during the second quarter of 2016 compared to the second quarter of 2010.

A huge difference between Facebook at Twitter is that Snap Inc doesnt have their own server farm, which makes it more expensive which means Snaps earnings can look much lower that those who have their own server farm.

Snap Inc lost $514 million in 2016, which is up from about $373 million. Some of that money goes to Google because Snap Inc rents storage and server space from them. New legislation that would change U.S, or foreign taxation of international business activities or other tax-reform policies could also seriously harm their business.

Benchmark Capital owns about 10% og the company. Lightspeed Venture Partners owns 8,3%, and Institutional Venture Partners owns 4%.

Snap are looking to raise up to $3 billion, and Snaps offering is being led by Morgan Stanley and Goldman Sachs. Morgan Stanley won the desired «lead left» position on the prospectus. The bank also led Facebooks initial public offering.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | February 1, 2017 · 10:00 am

The balance sheet assets of the six major central banks is up about 240%

All the worlds central banks are printing money like never before, and this is for the first time in history. The balance sheet assets of the six major central banks have just hit a new all-time record high of $17,3 trillion. Thats up from $4,987 trillion in May 2006.

People`s Bank of China (PBOC) has the largest balance sheet with total assets of $5,0 trillion, followed by the Federal Reserve with $4,4 trillion.

 

 

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The SNB is at the bottom of the chart above, but it has the largest balance sheet as a percentage of GDP, with it currently up to 88,4% of GDP vs. 20% of GDP in May 2006.

The BoJ`s balance sheet is equal to 70% of GDP vs. 25% of GDP in May 2006.

The PBOC`s balance sheet is equal to 53% of GDP vs. 56% of GDP in May 2006

The Fed`s balance sheet is equal to 25% of GDP vs 6% of GDP in May 2006

The ECB`s balance sheet is equal to 25% of GDP vs. 13% of GDP in May 2006

The BoE`s balance sheet is equal to 22% of GDP vs. 6% of GDP in May 2006

The total assets of the world`s six major central banks is equal to 36% of their combined GDP, a new all-time record high vs. Only 14% of their combined GDP in May 2006, and well above the nine median of 26%!

Trumps goal is massive growth, and IMF in January raised its economic growth forecasts to 2,3% in 2017 and 2,5% in 2018, thanks to Donald Trumps plans to cut taxes and boost infrastructure spending. The World Bank will follow IMF with similar forecasts.

Trump`s bold plan is to create 25 million new American jobs in the next decade, which means it will only take 2% annual growth of the workforce to hit that target. Data shows us that 25 million jobs have never been created in a 10 year timeframe.

A 2% growth rate over 10 year will generate 25 million jobs, which means if the economic growth rate hits 2,5% it would take about 8 years. If the growth rate goes up to 3% per year it will take about 6 years. If the rate goes higher, Trump can reach his goal during his first period as a President.

I do not agree with Trump`s immigrant policy, but there is a drawback here; If Trump want to reach his goal, he need immigrants, because the number of people who are working dropped 3,7% over the past 10 years, and some of the reasons for that is the baby boomers demographic shift.

Janet Yellen also said she consider to hike the rates because the economy is improving. The Fed want to proceed with «normalizing» monetary policy, which means they want to have room to ease in case of a future shock.

President Donald Trump can help them to solve their fiscal policy by cutting tax rates and spend more money on infrastructure. At the same time, he need to keep the lid on federal spending. Will Donald Trump succeed? Betting against him have so far been a bad decision.

 

trump100_b

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | January 31, 2017 · 10:00 am

Japan`s Megabanks are up about 50% since the election

This week is a week for a special focus on the banks around the world. Today, I will take a closer look at the banks in Japan.

Japans interest rate peaked in the 70s and 80`s at about 9%, and it went down to 6% in 1991. Then it started to fall down with the stock market. As you may know, Japan has printed tons of money and a great recovery has never happened.

 

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Japan are in a very special situation. The Bank of Japan left the interest rate unchanged at -0,1% at its December 2016 meeting, as widely expected. In addition; policy makers also decided to maintain its 10-years government bond yield target around 0% and viewed a moderate recovery trend in the economy had continued while exports has picked up.

With regard to the amount of JGB`s to be purchased, the Bank will conduct buying at more or less the current pace. An annual pace of increase of about 80 trillion yen.

The biggest banks in Japan are up about 50% since the election.

On top of all this, Japan will continue with its craziness and monetize about $670 billion`s worth of bonds per year.Wow!

Japan`s economy has continued its moderate recovery trend, and overseas economics have continued to grow at moderate pace, although emerging economies remain sluggish in part. In this situation exports have picked up.

Prime Minister Shinzo Abe said the sales for American cars are poor, pushing back after President Donald Trump described the trade imbalance on vehicles as «unfair». Japan exported 1,6 million cars in 2015. Sales of American cars in Japan are almost non-existent, while only 19 000 cars were sold in Japan in 2015, trade minister Hiroshige Seko said.

The reason for the bad sale is competition and not tariff.

Despite all the noise from the U.S and Trump`s fiscal and trade policies, and a number of unclear factors like Brexit, trade deals and the global economic situation, Japan will see its economy grow in 2017 on the back of the weak yen and government steps to stimulate sluggish consumption, economists have said.

They predict that 2017 will be a positive year for Japan, and the government looks to craft more measures to help boost consumption.

A weaker yen against the dollar will also help boost Japanese exporters and their revenue.

Shinzo Abe will meet Donald Trump in Washington 10 February this year.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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