Category: Business

Snapchat Parent Snap Files IPO Prospectus with SEC

14 Feb 2017 IAC Staff

Snapchat is looking to raise up to $3 billion through the offering of Class A common stock shares, according to the Form S filed with the U.S. Securities and Exchange Commission on February 2. The company’s shares will be listed on the New York Stock Exchange under the symbol “SNAP.” Snap, the parent company of the fast-growing social network Snapchat, filed its request in a  public document of its initial public offering (IPO).

Snap is a camera company. Its flagship product is Snapchat, an image messaging and multimedia mobile application that allows people to communicate through short videos and images. Each of those short videos or images is called a Snap. On average, 158 million people use Snapchat daily, and more than 2.5 billion Snaps are created every day.

Snap generates substantially all of its revenue from advertising. “We help our advertising partners generate a return on their investment by creating engaging advertising products that reach our large and desirable audience,” according to the filing.

For the year ended December 31, 2016, the company reported revenue of $404.5 million, an increase from $58.7 million for the year ended December 31, 2015. The global average revenue per user was $1.05, compared to $0.31 for in 2015. The average revenue per user in North America was $2.15, versus $0.65 for the same period in 2015. The company posted a loss of $514.6 million, compared to a loss of $372.9 million for the year ended December 31, 2015. Adjusted EBITDA was a loss of $459.4 million, versus a loss of $292.9 million for the year ended December 31, 2015.

Snap said that it views daily active users (DAU) as a critical measure of its user engagement. The company had 158 million DAU on average in the quarter ended December 31, 2016.

The company said that mobile advertising is the fastest growing segment. Worldwide advertising spend is expected to grow from $652 billion last year to $767 billion in 2020. The mobile advertising is projected to grow nearly 3x from $66 billion in 2016 to $196 billion in 2020.

“We believe that one of the major factors driving this growth is the shift of people’s attention from their televisions to their mobile phones. This trend is particularly pronounced among the younger demographic, where our Daily Active Users tend to be concentrated,” according to the company.

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, according to research firm Nielsen.

Google’s Waymo Cars Driven 2.5m Autonomous Miles and Accelerating

13 Feb 2017 IAC Staff

Waymo, formerly the Google self-driving car project, has completed more than 2.5 million miles of autonomous driving on public roads in the past few years, Dmitri Dolgov, head of Waymo’s self-driving technology, said in a blog post.

He said that Waymo is accelerating the pace of testing on public roads and in simulation as part of its efforts to bring fully self-driving cars to more people. Citing this year’s California disengagement report, Dolgov added that the company has significantly improved its fully self-driving technology. The report shows that Waymo’s rate of safety-related disengages has dropped from 0.8 disengages per thousand miles in 2015 to 0.2 per thousand miles in 2016.

“Disengages are a natural part of the testing process and occur when a driver takes manual control of a vehicle while it is in autonomous mode. Testing, including disengages, allows our engineers to safely add to our software’s driving skills, expand hardware capabilities, and identify areas of improvement,” Dolgov said.

He noted that disengages are helping Waymo to further improve its technology.

“During testing our objective is not to minimize disengagements; rather, it is to gather, while operating safely, as much data as possible to enable us to improve our self-driving system. Therefore, we set disengagement thresholds conservatively, and each is carefully recorded. We have an evaluation process in which we identify disengagements that may have safety significance,” according to Waymo.

The report shows that Waymo operated its self-driving cars in autonomous mode for more than 2.3 million miles as of November 2016. Of those, 635,868 miles occurred on public roads in California, with the vast majority on surface streets in the typical suburban city environment of Mountain View, and neighboring communities. Though Waymo increased its driving by 50% in California, its total number of reportable disengages fell from 341 in 2015 to 124.

Further, Dolgov said that despite cars getting smarter and more advanced, road fatalities in the United States are on the rise. And human error is involved in 94% of all crashes. That is a reason for Waymo to work “harder than ever to bring self-driving cars that don’t get tired or distracted, to our roads.”

He noted that the drop in safety-related disengages shows the significant work Waymo has been doing to make its software and hardware more capable and mature.

“And because we’re creating a self-driving car that can take you from door to door, almost all our time has been spent on complex urban or suburban streets. This has given us valuable experience sharing the road safely with pedestrians and cyclists, and practicing advanced maneuvers such as making unprotected left turns and traversing multi-lane intersections,” Dolgov said.

Dolgov said that Waymo will continue to work harder to make its cars safer. With a hundred tragic road deaths every single day, Waymo is “motivated to work with governments and policymakers to deploy our technology safely and quickly.” He added that Waymo is very optimistic about bringing fully self-driving cars on the public roads.

Apple Sues Chip Maker Qualcomm for $1B

27 Jan 2017 IAC Staff

The tech giant Apple (APPL) has filed a lawsuit to the tune of $ 1 billion on Friday, 22 January 2017 against Qualcomm Inc. (QCOM) in the federal district court in the Southern District of California by accusing the latter of overcharging for its wireless chips and engaging in monopolistic tactics.

Apple said in the “Form many years Qualcomm has unfairly insisted on charging royalties for technologies that they have nothing to do with.” According the iPhone maker, the more money the Company innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations.

According to Apple, Qualcomm, the chipmaker company and the maker of the iPhone’s baseband processor, is leveraging its monopoly position in baseband chips and overcharging for the chips and refusing to pay some $ 1 billion in promised rebate for chip purchases.

Apple said in the lawsuit “We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts.”

The Apple’s lawsuit followed the US Federal Trade Commission’s lawsuit against Qualcomm filed on 17 January 2017. FTC filed the lawsuit against Qualcomm saying that the San Diego-based company used its dominant position as a supplier of certain phone chips to impose “onerous” supply and licensing terms on cell phone manufacturers.

Patrick Moorhead, president of market-research firm Moor Insights & Strategy, said the legal dispute with Apple will help determine ‘what is fair pricing for patents that Qualcomm invested heavily to develop’.

The iPhone has been hugely profitable for Apple and accounts for three-fourth of Apple’s gross profit. The lawsuit says that by making its chip supply contingent on paying patent licenses, Qualcomm managed to secure royalty terms which are not otherwise acceptable to the manufacturers.

For instance, Apple charges about $549 for an iPhone 6s with a 4.7-inch display and $649 for a iPhone 6s Plus with a 5.5-inch display. Even if the higher price is related to the larger display, and not Qualcomm’s chip, Qualcomm collects the same royalty percentage over the total selling price of the iPhone. Qualcomm also require Apple to exclusively use it chips in iPhones from at least 2011 to 2016. Apple also claims that Qualcomm’s practices deterred Apple from switching to chips made by competitors like Intel Corp.

In a counter statement, Qualcomm General Counsel Don Rosenberg called Apple’s claims “baseless” and has put blame on Apple for “actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information.”

$125B Sovereign Wealth Fund Merger in Abu Dhabi

27 Jan 2017 IAC Staff

Abu Dhabi’s government has merged two of its sovereign wealth funds called Mubadala Development Co and International Petroleum Investment Co (IPIC) into a new single entity called Mubadala Investment Company (MIC) with assets totalling about $125 billion on 21 January 2017. Government sources said the move was to cut costs in response to drop in oil prices in the global market and to diversify investments away from oil to other viable sectors.

The government said the joint venture will “run operations in acquisition, development, construction, financing, operation, and investment in various sectors”.

According to the government, integrating the two entities would create greater benefit and enhanced economic value to them.

IPIC owns corporate stakes in the energy industry and other sectors across the world. The new fund, Mubadala Investment Co, becomes the world’s 14th largest sovereign fund according to the data available with Sovereign Wealth Fund Institute.

The Abu Dhabi government also named Mubadala Development’s current group CEO Khaldoon Khalifa Al Mubarak to run the new sovereign fund.

Government sources say the merger of the two wealth fund giants will enable Abu Dhabi to face the demands of competitive world, where size matters. The measure by the major sheikhdom in the oil-rich United Arab Emirates, comes as a cost-cutting measure in response to the low prices of the commodity in the global market.

According to government the high-level merger is needed as the emirate government attempts to combine state assets to cut costs in response to drop in oil prices and diversify investments away from oil to other viable sectors. In the wake of oil prices at about half their levels in mid-2014, sovereign funds across the rich Gulf Arab oil exporting states have to adjust policies to adapt themselves to lower inflows of petrodollars.

The merged entity’s large size is expected to enable it to raise money from international market. Mubadala Investment Company would conduct partnerships and businesses in 30-plus countries. It will infuse synergies and growth in various sectors including the energy and utilities sector, technology, aerospace, industry, health care, real estate, and financial investments.

According to the Emirate government, the combined entity would realize synergies and growth in multiple sectors including the energy and utilities sector, technology, aerospace, industry, health care, real estate, and financial investments. It would also have the ability to contribute more significantly to the diversification of the economy, in line with the Abu Dhabi plan and the country’s long-term vision.

As a part of its measures to strengthen its financial institutions, Abu Dhabi is initiating the process of merging of several institutions like the proposed merger of two largest banks, National Bank of Abu Dhabi and First Gulf Bank.

For more information see: http://www.mubadala.com/en/merger