Indian billionaire Sunil Bharti Mittal’s Bharti Enterprises has announced an agreement to purchase a 24.5% stake in BT Group from Patrick Drahi’s Altice, marking a significant investment in the UK telecoms giant.
The deal is seen as a vote of confidence in BT Group and the broader UK market, as Mittal, a prominent figure in India’s telecommunications industry, aims to bring his experience and long-term vision to the table.
Bharti’s strategic investment in BT Group
Bharti Enterprises, through its international investment arm, will acquire 10% of BT’s shares immediately, with plans to purchase the remaining 14.5% after securing the necessary regulatory approvals.
Despite the substantial stake, Bharti clarified that it does not intend to make an offer for the entire BT Group, signaling a strategic, rather than an opportunistic, approach to the investment.
Mittal, who built his fortune in India’s highly competitive telecom market, expressed his long-standing interest in BT and highlighted the company’s significant infrastructure and national status in the UK.
I’ve been watching BT for long, long years, it’s a company which has a glorious past, has national status, has this tremendous amount of physical infrastructure in the UK.
He emphasized that the investment is long-term and not driven by short-term market gains.
Support for BT’s leadership and strategic direction
Bharti’s investment is a strong endorsement of BT’s current leadership under CEO Allison Kirkby. Since taking over in February, Kirkby has overseen a nearly 30% increase in BT’s share price, driven by cost-cutting measures, a higher dividend, and improved cash flow.
This recovery in BT’s fortunes has been welcomed by investors, including Bharti, who sees potential for further growth under Kirkby’s stewardship.
Altice’s entire stake in BT was valued at approximately £3.2 billion based on Friday’s closing price. Despite the recent rally in BT shares, including a 6% jump on Monday following the announcement, Altice’s investment has been making losses.
The company initially acquired a 12% stake in BT in 2021, later increasing it to 24.5%, but the value of this stake has decreased by about £1 billion since its acquisition, according to calculations by the Financial Times.
Altice’s challenges and asset sales
Altice, led by Patrick Drahi, faces mounting pressure to reduce a debt pile exceeding $60 billion, accumulated during an era of low-interest rates. The sale of its stake in BT is part of a broader strategy to offload assets and manage this debt burden.
In recent months, Altice has sold a news channel and a radio station to shipping magnate Rodolphe Saadé and secured a $1 billion capital injection for Sotheby’s from Abu Dhabi’s sovereign wealth fund ADQ.
Karen Egan, head of telecoms at Enders Analysis, described Mittal as a “completely different kettle of fish to Patrick Drahi,” emphasizing that Mittal’s approach is long-term, constructive, and collaborative.
Mittal’s history with BT dates back to the late 1990s when BT owned a 21% stake in Bharti Airtel and held two board seats, indicating a long-standing relationship and understanding of BT’s operations.
Strategic implications and market response
The investment by Bharti comes at a time when BT Group is navigating a challenging telecom market. The entry of a high-profile, long-term investor like Mittal is likely to provide BT with strategic support and stability.
The move also highlights the growing interest in BT from global investors, following the disclosure in June that Mexican billionaire Carlos Slim had acquired a 3% stake in the company.
Allison Kirkby, BT’s CEO, welcomed the investment, stating,
We welcome investors who recognize the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy.
Bharti Airtel’s shares, listed in Mumbai, fell slightly by 0.4% on Monday following the announcement. However, the stock has surged by 43% this year, outperforming India’s benchmark BSE Sensex index, which has gained 10% over the same period.
This strong performance underscores investor confidence in Bharti Airtel’s growth prospects, despite the challenges in the global telecom sector.
Mittal’s long-term bet on BT Group
Sunil Bharti Mittal’s acquisition of a significant stake in BT Group from Altice represents a strategic long-term investment in the UK telecom giant.
This move underscores Mittal’s confidence in BT’s potential and his commitment to contributing to its future growth.
As Bharti integrates its stake in BT, the telecom industry will be closely watching the impact of this partnership on the market dynamics and BT’s continued recovery.
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United States President Joe Biden marked the second anniversary of the CHIPS and Science Act by highlighting the significant strides the US has made in semiconductor manufacturing.
The legislation, passed in 2022, aims to revitalise domestic chip production and bolster the nation’s position in advanced technologies like artificial intelligence (AI). Biden’s remarks underscore the impact of the Act, which has led to substantial investments and job creation in the semiconductor industry.
From 10% to 30%: US chip production targets for 2032
In the years leading up to the CHIPS Act, the US witnessed a steep decline in its share of global semiconductor production.
Once accounting for 40% of the market, the country’s contribution dwindled to just 10%. The CHIPS and Science Act was introduced as a response to this downturn, aiming to reclaim the US’s leadership in the semiconductor sector.
Biden noted that, thanks to the Act, the US is now projected to manufacture nearly 30% of the global supply of leading-edge chips by 2032, a significant leap from the negligible figures seen just two years ago.
This ambitious goal reflects a broader strategy to ensure that the US remains competitive in emerging technologies, particularly AI, which relies heavily on advanced semiconductor chips.
The shift towards increased domestic production is not only about securing supply chains but also about maintaining technological leadership in an increasingly digital world.
$400 billion in semiconductor investments
Since the enactment of the CHIPS and Science Act, the US has seen a surge in investments from firms eager to capitalise on the incentives provided by the legislation.
Biden highlighted that these companies have announced investments totalling $400 billion in semiconductor manufacturing facilities across the country.
These investments are critical in expanding the domestic chip production capacity, reducing reliance on foreign suppliers, and securing the supply chain for essential technologies.
The influx of capital into the semiconductor sector has also translated into significant job creation. According to Biden, the industry has already generated 115,000 manufacturing and construction jobs, providing a much-needed boost to the US economy.
These jobs are not only for the semiconductor industry but also for the broader manufacturing sector, which has seen a resurgence in activity as a result of these investments.
The road ahead: Challenges and opportunities
While the progress made in the past two years is commendable, challenges remain on the road to achieving the US’ ambitious semiconductor production goals. Building the infrastructure required for advanced chip manufacturing is a complex and time-consuming process.
It involves not only constructing state-of-the-art facilities but also ensuring a skilled workforce is available to operate them.
Moreover, global competition in the semiconductor industry is fierce, with countries like China and South Korea also ramping up their production capabilities.
The success of the CHIPS and Science Act will depend on how effectively the US can maintain its technological edge while navigating these competitive pressures.
Looking forward, the CHIPS Act’s long-term impact will hinge on sustained investment, continuous innovation, and strong public-private partnerships.
As the US aims for 30% of global chip production by 2032, the journey will require coordinated efforts across government, industry, and academia to address the challenges and seize the opportunities that lie ahead.
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Meme coins have made quite a big name in the ever-evolving world of cryptocurrency.
Bonk, in particular, has attracted many investors this year. But now, a new entrant, Memeinator is making waves as well.
Many believe that the native MMTR coin could be the next 100x opportunity.
But let’s not accept anything at face value. Let’s dive deeper and figure out whether you should invest in BONK or bet on the new contender MMTR in 2024.
Memeinator has an edge over rivals
Memeinator could be a better investment than Bonk for this year as it has a significant edge over traditional meme coins.
That advantage is its ability to leverage artificial intelligence to go after weaker meme coins to deliver on its promise of dominating the meme coins space.
This unique strategy positions MMTR price to rapidly increase on the back of broader AI tailwinds.
Memeinator had a successful presale
A quick look at just how successful Memeinator’s recently ended presale was drives confidence in it as a good investment for 2024.
Having raised millions, it’s beyond doubt that the investment community sees meaningful potential in this blockchain-based platform. This early traction may be an indicator of future growth and adoption.
You can find more about Memeinator and its native meme coin MMTR on this link.
Community is engaging well with MMTR
Memeinator looks attractive at writing also because of the statistics related to community engagement.
For example, MMTR has received more than 1.44 million likes on social media and has reached over 340K people which has helped its price gain a whopping 247% over the past week.
Memeinator has also been mentioned close to 6,000 times in media which suggests it’s capturing attention at an unparalleled rate for a new meme coin.
MMTR to launch a video game
Memeinator is much more than a pump-and-dump scheme. That is evidenced in its plans to launch Meme Warfare – a video game to further drive community engagement.
MMTR is committed to gamifying the experience to attract a dedicated user base that typically is central for long-term success in the crypto market.
Crypto tailwinds that may benefit Memeinator
The aforementioned factors, when put together with the broader tailwinds for the crypto industry in 2024, indicate that Memeinator may be a good investment for 2024. Such tailwinds include:
The total supply of Bitcoin was cut in half in April (Bitcoin halving event)
Regulators worldwide have been approving Bitcoin and Ethereum exchange-traded funds to invite institutional capital to the crypto market
The US Federal Reserve is expected to start cutting rates in September which will likely make the risk-on assets like cryptocurrencies more attractive
As these tailwinds drive broader acceptance for cryptocurrencies, novel projects with strong communities like Memeinator (MMTR) will likely benefit.
The bottom line
All in all, it’s important to note that BONK has had its moment in the sun. But Memeinator’s innovative approach, solid presale performance, and fast-growing community signal the potential for significant gains ahead.
If you’re interested in learning more Memeinator (MMTR), you should click here to visit its website now.
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Bumble, the women-centric dating app that once enjoyed a strong market presence, has recently seen its fortunes take a sharp downturn.
On August 8, Bumble shares crashed nearly 33%, hitting a record low after the company lowered its annual sales growth and 2024 revenue guidance.
This sudden plunge has sparked concerns among investors, signalling that the brand’s efforts to reignite growth through a comprehensive app overhaul have failed to deliver the desired results.
The company, now valued at around $1 billion, is set to lose more than $350 million in market value, marking its biggest intraday decline on record.
Bumble’s Q2 results reveal declining performance
Bumble’s second-quarter results have fallen short of Wall Street’s expectations, underscoring the challenges the company faces in maintaining its market position.
Revenue for the quarter ending June 30 increased by 3.4% to $268.6 million, but this was below the average analyst estimate of $273.2 million.
More concerning was the decrease in average revenue per paying user, which dropped to $21.37 from $23.23 a year earlier.
The company’s price-to-earnings ratio, a key metric for valuing stocks, stood at 7.91 times, significantly lower than its rival Match Group’s 15.15 multiple.
Bumble’s user base did grow, with the number of paying users rising 14.7% to 2.8 million, aligning with Wall Street estimates.
However, the tepid revenue growth and declining average revenue per user indicate that Bumble is struggling to convert its user base into sustainable financial growth.
Q3 outlook and 2024 guidance raise red flags
The company’s outlook for the third quarter and the full year 2024 has raised further concerns among investors.
Bumble now expects its full-year revenue to grow between 1% and 2%, a significant downgrade from its earlier forecast of 8% to 11%.
For the third quarter, the company has projected sales between $269 million and $275 million, well below the $296.1 million that analysts had anticipated.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to range between $77 million and $80 million, falling short of Wall Street’s expectations of $91.5 million.
This cautious outlook has sparked concerns about the effectiveness of Bumble’s recent app relaunch and the introduction of new features like the Premium Plus offering.
The company’s management has tied the revised guidance to a broader “reset” of its strategy, which they discussed in detail during an analyst call.
Bumble plans to slow down certain monetization efforts, such as expanding its Premium Plus subscription, which was initially slated for the second half of the year.
Is Bumble’s new direction too little, too late?
Bumble’s leadership transition has also played a role in the company’s current predicament.
Founder Whitney Wolfe Herd announced her departure as CEO in November, and since then, Bumble has appointed four new C-suite executives tasked with overhauling the app to appeal to younger users.
The company has introduced several new features, including new interest filters, an AI-assisted photo picker, and enhancements to the matching algorithm, all aimed at creating a more “authentic” user experience.
However, these changes have not yet translated into financial success. The platform’s focus on rewarding “positive peer behaviours” and cracking down on bad actors may improve the user experience in the long term, but it appears to have alienated some users in the short term.
As a result, Bumble’s management has decided to slow down its near-term monetization efforts, which could further impact its revenue growth.
Fading charm of dating apps
Bumble’s struggles are not unique; they reflect broader challenges facing the online dating industry.
The pandemic-driven boom in dating app usage has waned, and companies are grappling with a post-pandemic decline in user engagement and willingness to pay for premium services.
Source: TradingView
The competition is fierce, with rivals like Match Group reporting stronger results, thanks to stabilizing trends at Tinder and robust growth at Hinge.
Moreover, macroeconomic factors have added to the pressure. A slowdown in consumer spending, particularly among younger users, has made it harder for dating apps to maintain their growth momentum.
Crispus Nyaga, analyst at Invezz, noted:
Bumble stock crashed after weak earnings and weak guidance, a reflection that the online dating industry is facing substantial headwinds. These results came just a week after Match Group, the parent company of Tinder and OkCupid, slashed jobs after another set of weak results. Bumble’s main challenge is how to monetize its business as competition – including from Meta Platforms and TikTok – rises. Its customer churn will likely continue rising and the company will need to improve its offerings to justify its premium offerings.
What’s wrong with Bumble’s finances?
Bumble’s financial metrics reveal a company that is struggling to maintain its footing in a competitive market.
The total number of paying users increased to 4.1 million in the second quarter, up from 3.6 million a year earlier.
However, this growth in users did not translate into proportional revenue growth, as the average revenue per user continued to decline.
Bumble’s profit per share for the quarter came in at 22 cents, beating the estimate of 13 cents. While this is a positive sign, it is overshadowed by the company’s reduced revenue guidance and the broader concerns about its growth strategy.
The company has also announced plans to introduce more features on the Bumble app, including additional options for making “opening moves” and an AI-assisted photo picker to ease profile creation.
These features are expected to roll out through the fall and early winter, but whether they will be enough to turn the tide remains to be seen.
Investor are cautious
Investor sentiment towards Bumble has soured, as reflected in the sharp decline in its stock price.
The company’s downward revision of its revenue and earnings guidance has left investors questioning the clarity and effectiveness of its growth strategy.
Bumble’s challenges are compounded by the broader market dynamics, including changing consumer preferences, increased competition, and unfavourable macroeconomic conditions.
While the company’s leadership is taking steps to address these issues, the road ahead is likely to be challenging.
Can Bumble bounce back?
Bumble’s recent struggles highlight the difficulties of maintaining growth in a highly competitive and rapidly changing market.
The company’s efforts to reinvent itself through new features and a refreshed app have yet to yield the desired results, and its financial performance has suffered as a result.
The market’s reaction to Bumble’s revised guidance and disappointing Q2 results suggests that investors are losing confidence in the company’s ability to navigate these challenges.
While Bumble still has a strong brand and a sizable user base, it will need to demonstrate that its new strategy can deliver sustainable growth in the long term.
As Bumble moves forward, it will be crucial for the company to strike the right balance between enhancing the user experience and driving revenue growth.
Whether it can achieve this balance and regain investor confidence remains to be seen.
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Fastly Inc. (NYSE: FSLY) experienced a significant downturn this week, with its stock price falling to an all-time low of $5.52 and closing down 14.33% on Thursday.
This drop followed a series of events beginning with the company’s Q2 earnings report released post-market on Wednesday, where Fastly announced a 5% cut to its full-year 2024 revenue guidance. The adjusted forecast now ranges between $530 million and $540 million.
Analysts react to Fastly’s revised guidance
Analysts, like Piper Sandler’s James Fish, reacted by downgrading Fastly from ‘Overweight’ to ‘Neutral’ and slashing the price target from $10 to $6, citing demand issues primarily with its largest customers who are on utility-type contracts.
The revised guidance and the subsequent stock price fall were heavily influenced by reduced demand forecasts from Fastly’s major clients. In his note, Fish highlighted concerns about Fastly’s future revenue prospects, leading to the downgrade.
Fastly reported a Q2 revenue of $132.37 million, a 7.8% increase year-over-year, slightly beating the expectations by $0.85 million.
However, despite this growth, the company faced a GAAP net loss of $43.7 million, deepening from a loss of $10.7 million in the same quarter the previous year.
Challenges for Fastly
The earnings details revealed more than just financial figures; they painted a picture of a company grappling with significant market and operational challenges.
Notably, Fastly’s Last Twelve Months Net Retention Rate (LTM NRR) decreased, highlighting issues in customer retention and possibly signaling reduced future revenues from existing customers.
Fastly struggles with not only demand softening but also increased competition in the content delivery network sector.
The company’s heavy reliance on a small number of large media companies exacerbates its vulnerability to pricing pressures and shifts in spending patterns.
Despite some successes outside its largest customer base, Fastly’s expansion into security and computing has not yet counterbalanced these challenges effectively.
In response to these challenges, Fastly CEO Todd Nightingale outlined the company’s strategy to mitigate these demand challenges. In Q2, Fastly pushed forward with its customer acquisition efforts, notably achieving a 4% sequential growth in Enterprise customer count.
Moreover, Fastly introduced the Fastly AI Accelerator in beta, aimed at enhancing the performance of ChatGPT-powered applications and reducing operational costs. This move signifies Fastly’s pivot towards leveraging AI to diversify and strengthen its service offerings.
Workforce reduction as a cost alignment measure
Adding to its slew of challenges, Fastly also announced an 11% reduction in its global workforce. This decision is expected to incur a charge of approximately $9.5 million to $10 million, primarily related to severance and related costs, aiming for completion by the end of 2024.
Despite the troubling short-term indicators, Fastly is making concerted efforts to pivot its strategy. This includes enhanced investment in security and compute services, which are expected to provide cross-selling opportunities and potentially stabilize revenue streams.
However, the effectiveness of these strategic shifts remains to be seen, particularly as they occur against a backdrop of broader market challenges and internal restructuring.
As Fastly navigates through these tumultuous times, the fundamental question for investors is whether the current low stock price represents a buying opportunity or a potential value trap.
To answer that let’s delve deeper into what the charts have to say about Fastly’s price trajectory, and explore whether the technical indicators align with the fundamental analysis presented.
A short-term bounce-back play?
Fastly shares have remained in a prolonged downtrend since late 2020 that has seen them crashing from above $130 to yesterday’s low at $5.52. Although the stock can experience further downside, one interesting thing to note about yesterday’s move is that the shares closed over 5% higher from where they opened at $5.58.
FSLY chart by TradingView
Considering that short-term traders who want to bet on a near-term bounce-back can take a long position in the stock near $5.85 with a strict stop loss at $5.50. However, investors must stay away from the stock until it can recapture its medium-term swing high above $8.46.
Traders who want to short the stock must wait for it to bounce back above $6 or fall below $5.52 to initiate fresh short positions.
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Venezuelan President Nicolás Maduro has escalated tensions with Elon Musk by ordering the temporary blocking of access to X, the social media platform previously known as Twitter.
This move, which comes in the midst of an ongoing online dispute between the two and in the wake of Maduro’s controversial re-election, represents a significant clampdown on dissent within the country.
Maduro accuses Musk of fueling unrest
Maduro, who often portrays himself as a revolutionary socialist, has accused Musk of using X to promote protests and unrest in Venezuela.
The president claims that these actions are part of a broader “fascist, imperialist” coup attempt backed by the United States. In a speech delivered on Thursday night, Maduro stated,
He has violated the rules by inciting hatred, fascism, civil war, death, confrontation of Venezuelans and has violated all Venezuelan laws.
These accusations reflect the broader narrative often employed by Maduro’s government, which frequently blames foreign powers, particularly the United States, for the country’s internal challenges.
By targeting Musk, Maduro is framing the social media mogul as a significant external threat to Venezuelan sovereignty.
Government orders X to be blocked for 10 days
In response to these accusations, Maduro announced that Venezuela’s National Commission of Telecommunications would block access to X for a period of 10 days.
“We will remove the X social network out of circulation in Venezuela for 10 days,” Maduro declared.
By Friday morning, users in Venezuela reported that posts on X had stopped loading, with only those using VPNs able to access the platform.
This move underscores the government’s ongoing efforts to suppress dissent and control the flow of information within the country.
Social media platforms like X have long been a vital tool for opposition groups in Venezuela to organize protests and share information, making them a frequent target of government crackdowns.
The implications of the ban
The temporary ban on X raises several critical questions about the future of free speech and access to information in Venezuela.
By blocking one of the most popular social media platforms, the government is effectively stifling a key avenue for public discourse and dissent.
This could have significant ramifications for the country’s already fragile political environment.
Additionally, the decision to target a platform owned by a high-profile figure like Elon Musk may further strain Venezuela’s already tenuous relationship with the US.
Musk, a billionaire entrepreneur with significant influence, could use his platform to amplify the situation in Venezuela, drawing greater international attention to the Maduro government’s actions.
Moving forward: What to expect?
As the 10-day ban progresses, it remains to be seen whether the Venezuelan government will extend the block or take further action against other social media platforms.
The situation also raises questions about how international actors, including the US, might respond to this latest escalation.
For now, Venezuelans with access to VPNs will continue to use X and other blocked platforms to share information and express dissent.
However, the government’s willingness to impose such a significant restriction suggests that more stringent measures could be on the horizon.
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