Tuesday 18/06/19

Facebook launches its cryptocurrency and TikTok targets advertising…

Facebook taking aim at Bitcoin with £800m investment (Daily Telegraph, Hasan Chowdhury) contends that Facebook will launch its new cryptocurrency today. Bitcoin is currently the most popular cryptocurrency and has been strengthening of late, powering through the $9,000 mark recently for the first time since May 2018. The new cryptocurrency is being backed by Visa, Mastercard, PayPal and Uber and is thought to have support from groups such as the US Treasury and the Bank of England. * SO WHAT? * We’ll just have to see how this works out – although surely it WILL given the strength of the backing it has and its potential reach. What will be even more interesting to see is whether it ecplises Bitcoin or whether it legitimises it!

TikTok prepares to woo advertisers at Cannes (Financial Times, Hannah Murphy) suggests that the Chinese viral video app owned by ByteDance is trying to use its reach to muscle in on advertising by joining the fray that includes Instagram, Snapchat and YouTube. Third party estimates suggest that the app has now been downloaded over 1bn times and the company is going on a charm offensive at the Cannes Lions festival to emphasise the potential value of advertising on a platform that claims 37bn monthly video views and average daily user time of 46 minutes. Thus far, it has been building up its audience, but TikTok is expected to unveil a number of new features that will appeal to advertisers. * SO WHAT? * Given its popularity, reach and engagement, you would have thought that advertising with TikTok is a no-brainer. The risk will be with the potential fickleness of its youthful audience on a longer term basis, but this will surely be a winner in the short term. It’ll be interesting to see if this affects advertising revenues on the other platforms mentioned above or whether the digital advertising pie just gets bigger.

Airbus trumps Boeing and Lufthansa has a profit warning…

Airbus unveils new jet at Paris airshow and $15bn worth of orders (The Guardian, Gwyn Topham) shows Airbus rubbing Boeing’s nose in it at the Paris airshow as it launched a new long-range small passenger jet, called the A321XLR, and announced a fat order book. The plane’s longer range will open up routes like India to Europe and China to Australia and give airlines the option of operating single-aisle aircraft on routes that would normally only be

able to be serviced by larger, less fuel-efficient planes. * SO WHAT? * Airbus is continuing to benefit from Boeing’s 737 Max nightmares and, TBH, will probably continue to do so for some time after Boeing manages to fix its problems. 

Lufthansa’s profit warning shock rocks airline rivals (Daily Telegraph, Oliver Gill) highlights a shock profit warning from Europe’s largest airline as it blamed thinner margins on fierce competition from low-cost rivals and higher fuel costs. The share price fell by over 10% on the unscheduled announcement. Other airline share prices, such as those of IAG, easyJet, Ryanair and Wizz fell by 3-5% on the news. Adding insult to injury, Lufthansa said that it is also facing a potential €320m bill from German tax authorities.

Huawei puts a figure on its suffering, Pfizer makes an important acquisition and Beyond Meat faces detrators…

US blacklisting sees Huawei smartphone sales drop 40pc (Daily Telegraph, James Cook) shows just how much damage the US blacklisting is doing to Huawei as its global smartphone sales have fallen by 40% in the last month and that revenues would be $30bn less than forecast for the next two years. Founder Ren Zhengfei said that “We cannot get components supply, cannot participate in many international organisations, cannot work closely with many universities, cannot use anything with US components, and cannot even establish connection with networks that use such components”. Tricky. * SO WHAT? * This shouldn’t come as any surprise, but it is interesting to see the impact being quantified after Broadcom put a figure on it last week. I would have thought that Huawei will be hobbled in the West for quite some time as consumer confidence in the long term viability of its product and the existence of so many others in the space will kill their business (particularly in mobile phones).

Elsewhere, Pfizer to buy cancer drug maker Array BioPharma for $10.64billion (Wall Street Journal, Jared S. Hopkins and Kimberly Chin) heralds a major acquisition in

the field of cancer drugs. Pfizer has been trying to beef up its own offerings as well as making acquisitions but Array has two drugs – Braftovi and Mektovi – which are particularly attractive. * SO WHAT? * Given that the cancer drug market is expected by some to balloon to £237bn by 2024 in world-wide sales, you can understand Pfizer’s eagerness to be on the front foot.

Wall Street asks what it has just been served (The Times, James Dean) highlights increasingly sceptical sentiment from investors about the continued success of Beyond Meat, whose share price has risen by as much as 646% since it floated on the stock market. All eight big US banks now rate shares of Beyond Meat as a “hold”. * SO WHAT? * Some have compared Beyond Meat’s rise to that of Bitcoin and Tilray, the “pot stock” that shot up by 1,665% in less than three months. Yes, valuations are looking stretched at the moment, but the fact is that they are producing a real product that real people are already buying – and distribution is widening all the time. No-one seems to know why Bitcoin goes up or down (apart from “there’s a big order in the market” etc.) and Tilray went up on hopes for products that MIGHT come out when cannabis was legalised. IMHO, Beyond Meat makes something that’s tangible, has health benefits and is good for the environment – so I just think long term this stock is a winner. The shine may be dulled if other companies, such as Impossible Foods, attract more money but for the moment, I think that this is a stock that will continue to rise. If it follows through on its projection to break even by the end of this year, I find it hard to see what will stop it. 

And finally, in other news…

I thought I’d leave you today with what could be a game-changing cooking hack in ​An Incredible Garlic Peeling Hack Is Blowing Our Tiny Little Minds (LadBible, Jess Hardiman https://tinyurl.com/yyarjggg). I’m a bit sceptical, but I will definitely give this a go in future to see if it works!