Morgan Stanley Slashes Target Price to $16 For Twitter Inc.

Twitter Inc. has been making an effort to make its platform more engaging for users and add more customers to the platform however analysts at Morgan Stanley feel that the company will not be able to achieve much of that in the near future.

Twitter Inc. just can’t catch a breath. Due to projected slow user growth, revenue and earnings analysts at Morgan Stanley came down hard on the micro-blogging website as they lowered their forecast for Twitter stock.

In a note to investors, Brian Nowak, an analyst at Morgan Stanley stated that Twitter has had some trouble in keeping its current users engaged and along with that the social media website’s user trend remains troubling as well. Due to this reason, Morgan Stanley has slashed its twelve year target price to $16 from an initial one-year price target of $18. Furthermore, the financial services and research firm also reduced its projects for fiscal year 2017 by 13% to $769 million. Along with that it also reduced the revenue forecast of the micro-blogging website to $3.23 billion which indicates a slash of 6%.

The social media network has been struggling to keep users engaged on the website and has failed to increase the number of users on Twitter; apart from its user-base of politicians, celebrities and journalists, the social media site has found it difficult to attract mainstream social media users onto the website. In an attempt to attract these users, Twitter signed a deal with U.S. National Football League to stream its games on the platform so that it can drive more videos onto its platform from the NFL.

Morgan Stanley has maintained its Underweight rating on the stock of the micro-blogging platform. Furthermore the firm mentioned that the average time spent by a U.S mobile user on Twitter fell by almost 10% in the first quarter of 2016 in comparison to the same quarter in the previous year. However, in comparison to the previous year’s same quarter the new mobile app downloads were the same.

The note also suggested that any new users that might be added on the platform will be solely due to the deal that the social media network signed with NFL, the U.S. Presidential Elections as well as the Olympic Games. The analyst wrote that at this point fewer users are seen on the platform and even those that are on the platform are seen using the service for lesser time.

The analysts at the research firm are expecting that usually in the first quarter of the year the active user growth is reported to be fair however this time they are predicting that the social media site will not be able to report strong numbers when the company releases its earnings results on April 26. 

Will Tesla Motors be able to deliver on time, this time?

The auto-maker has received a number of pre-order for its Model S and it has started working on those deliveries already.

The pre-hype, event and post pre-order, all have turned out to work in Tesla Motor’s favor after the launch of its Model S at the March 31 event. The auto-maker has been quite successful in grabbing the attention of its audience and already has pre-orders of over 267,000, according to an update for the company’s chief executive officer Elon Musk. Only the pre-orders, at this point amount to a hefty amount of $276 million in cash.

The much anticipated mass market vehicle by Tesla was introduced last week at the auto-maker’s Model S launch event and has managed to surpass everyone’s expectations.. Potentially, the model is likely to get more orders worth $11.59 billion. It has managed to receive a more-than-expected response after the event however it was already understood that the event will be a success.

Due to the pre-hype, right before the event Tesla stock was trading up 3.4% at $237.59 and furthermore, the stock went even higher the next day. The company owes most of the product’s high demand to the pre-hype and buzz that it managed to create right before the launch. Usually Tesla motors does not need to market its product however before the launch of Model S, the management and the CEO himself, marketed the product on Twitter and released teaser pictures of the car.

However, the question that arises now is whether the company will be able to make the deliveries of these vehicles on time. There are many reasons to believe that the automobile organization will not make the same mistakes that it made with Model X as the Elon Musk, himself during the fourth quarter earnings call admitted the mistake that the auto-maker made with the Model X. He further stated that they realize that a lot of features and technologies were put into the specific model which was too much for a single product. Due to this reason, the product suffered production lag because it became too hard to produce it.

Mr. Musk admitted that it was one of the most difficult vehicles to produce in the world. However, we are quite sure that they have learnt from their mistakes and that they will not be repeating the same mistakes with Model S, the mass market electric vehicle (EV). This product is said to be make-or-break for the auto-maker. Tesla further stated that this was just part 1 of the automobile and there will be in a part 2 in which they will introduce additional features and that is why they have introduced to the vehicle to the customers almost two year prior to the actual launch.

The vehicle is expected to hit the market by the end of 2017 and the reason for the late launch is that they want to make sure that all the additional features are tried and tested properly before the deliveries are made to the customers. From Global Equities Research, Trip Chowdhry stated that the auto-maker has made the product with a ‘Production First’ approach in mind. According to him, the company this time has worked on a very difficult mindset from that of Model X.

Could Pfizer-Allergen Merge Stop Just When Its About To Reach The Finish Line?

Pfizer is not getting the easy way out with it acquisition of Allergen still pending more reviews and criticism of the US Treasury

The merge with an Irish based Botox Company, Allergen Plc. Of Pfizer have been making headlines from criticism sympathy and much more gaining the attention of democratic and the government of the United States. The medicinal giant company hoped to avoid huge tax bills via this merge as its address would change to Ireland instead. This process is known as inversion, the US Treasury will not let this happen as easily as the drug maker had hoped and has released new policies and rules. This change would stop US based businesses do not attempt to avoid taxes.

Pfizer Inc. received this unfortunate news on Monday from the US Treasury which might damage the plans of its merge with Allergen worth $160 billion. This even lead to Allergen stock falling by as much as 22%, but the drug makers shares rose by 3% according to Reuters. This ‘supposedly’ inversion merge between the two companies would have moved the US Company’s address to Ireland putting it at an advantage in terms of smaller tax bills to as much as 12.5% instead of US’s 35%.

The pharmaceutical company is now the notice it has received from the US Treasury without making any assumptions of its own. It should not be concluded that the government of the United States has anything against these companies but it should also be taken into consideration that it is only making attempts to protect its own rights and stopping other companies from taking advantage of any loopholes in order to save it treasury.

Many US based companies have been doing this which the government has closely been observing and taking action against. Businesses are from the US and operate there but merge with another foreign company and get their home address changed avoiding taxes of the United States. Republicans such as Hillary Clinton and Donald Trump are against such actions of companies and have discussed this at their campaigns. The Treasury has even disclosed a statement that says foreign organizations will now be imposed with a three year limitation so that acquisitions and inversion deals can be avoided.

No speculations can be made at this point of what Pfizer’s next move is going to be after this update but there is lesser chance that it will back out from the merge now. It says that inversion was never its main motive of the takeover. Allergen will continue to sell its generics division to Teva according to Davis as it will get the company money. Both these parties involved in the merge can end the deal if they wish to, however the party ending the deal is going to have to pay the other an amount of $400 million, this is what the agreement states.

Blackberry’s John Chen Spoke about the Performance of Priv

The smartphone maker announced its fourth quarter financial results yesterday according to which The Priv did not get the attention we thought it did.

We had initially hoped that Blackberry Ltd.’s android powered smartphone, Priv would prove to be a turning point for the Canada based smartphone maker. However, according to the recent fourth quarter fiscal year financial results, it can be observed that the product did not get as much as attention as we had hoped it would.

The CEO John Chen had previously stated in an interview with CNBC, that in case the company fails to progress in the hardware business; it might exit the smartphone market and be a software-only firm. In addition to that he also said (at the launch of Priv last year) that the company needed at least a year to make the specific smartphone profitable. Despite the dip in its stock and revenue, he is expecting that the product could reap profits in the near future.

As per the fourth quarter earnings report, the Canada-based company incurred a loss due to which a dip of 5% was seen in BBRY stock. From initial revenue of $660 million from a year earlier, the revenue fell down to $464 million. Furthermore, the analysts had predicted that the organization might post earnings of $563.2 million; instead it made a loss of $238 million in comparison to a year ago, the loss was at $28 million.

In an interview with Bloomberg, the CEO justified why the android based smartphone failed to get the attention everyone thought it would. He explained that due to a delay in the network contract agreements the Priv’s distribution network suffered and took a hit. Furthermore, it has been made quite evident that the high-end smartphone market has officially hit a saturation point since the Priv was targeted as one of the high-end smartphones it took a hit in that department as well. He added that the price of the device might have to be taken into consideration again and a change might be seen some time next week.

John further told Bloomberg that the company is also working on mid-range category smartphone now as well which means that in the near future we will be seeing some new Blackberry mid-range phones. However at a lower average selling price (ASP) the company will need to smell a number of units in the market to breakeven as this product is mainly for the mass market. In addition to that, he did emphasize of the fact that whoever bought The Priv, loved it. He believes that mid-range phones might prove to be an excuse to sell BBRY’s high-end phones as well.

He also talked about some of the drawbacks in the device which include upgrading the operating system on a regular basis. Rumors have surfaced that android’s latest Marshmallow 6.0 will soon hit the Priv as well. He is quite certain that the smartphone will prove to be an excellent device in the smartphone market; and with its expansion plans to enter Japan and Mexico will only increase the company’s market share in the industry. Even though he mentioned that in case the hardware business does not perform well, they will exit it however it seems as though he has no such intentions of doing so.

Furthermore, there have been rumors of two new android smartphones to hit the market soon that have been codenamed ‘Rome’ and ‘Hamburg’. However, it should be mentioned that the company’s fate completely depends on the product’s pricing, average selling price and marketing along with other factors.

In a time span of five year, McDonald’s Corporation plans to introduce over 2,800 restaurants in the Asian market. The fast food chain announced that it was looking for strategic partners in the Asian region to avail growth opportunities and increase its value; these strategic partners, the company stated would help McDonald’s achieve its competitive advantage all throughout Asian especially in places such as Taiwan and Japan.

The hamburger chain in partnership with these strategy planners will be able to invest in modernization and further increase its capital resources for expansion. Steve Easterbrook, the chief executive officer of the fast food restaurant chain, stated in a press release that the Asian market seems like an area filled with opportunities for the company where it can they will be able to blend their global quality standards with those of the locals by attaining local insights and expertise from its strategic partners that share their vision and values.

The CEO further stated that this expansion strategy will help the company grow in different diverse markets which will place it closer to its customers and hence they will be able to serve their customers better. As per Easterbrook’s statement it is quite evident that the hamburger giant exploring potential growth opportunities in the Asian market mostly because of its diversity and also because it will get the company closer to its customers.

According to the strategic and thoughtful approach, McDonald’s plans to launch 1,500 outlets in China, Korea and Hong Kong in the upcoming five years. This will be an extension to its existing 2,800 restaurants in the three regions. The company has pointed out these three specific regions are the restaurant chain organization’s High-Growth Markets; these are the markets that the company signifies as markets that have a greater potential for expansion and franchising. Furthermore, presently, the restaurant fast food chain has over 36,000 restaurants in over 100 countries all across the globe.

McDonald’s like many other fast food chains and coffee houses including Starbucks are aiming at China mainly because of its population growth and urbanization rates. It works in the favor of the company as it will bring in more sales. In the past few years, the Big Mac maker has been struggling in the Chinese market because of a problem that occurred due to one of its suppliers back in 2014. And in order to retain customer’s trust in the market, they are pushing towards this expansion move.

In addition to that, the company had been posting weak earnings since the past few quarters however it stated late November last year that it will work on improving its earnings and it is safe to say that it has managed to deliver. Furthermore, the last stronger-than-expected financial results were merely a reflection of how well the company’s All-day breakfast menu did in the market.

Netflix's Streaming Catalog Declined By 32%

Sources suggest that the streaming catalog of Netflix is shrinking rapidly after it saw a 32 percent decline in total titles

Netflix Inc. has been in a war with its streaming subscribers as well as the VPN services which does not seem to be getting over anytime soon. Late last year, the company announced its global expansion plans and since then it has been in a lot of troubles from its streaming subscribers. The streaming platform is available to nearly 75 million subscribers in 190 countries globally. But subscribers who are living outside the United States feel that their monthly subscriptions are not valued.

Ever since the announced that it will expand in Australia and New Zealand in March last year, viewers used VPN services to already subscribe to the streaming service before it was launched. Because of this, nearly 340,000 Australian viewers got their hands on the far superior US content library. That was the moment which initially started geo dodging and now it is being done on a big scale. The only issue which the subscribers feel is that apart from the United States’ members, Netflix does not value other customers.

It is believed that the US content library is three times bigger than its second major market United Kingdom and ten times bigger than almost all other parts of the world which also include new 130 countries. The cord cutter already dreamt of replacing the pay TV cable services where customers had to pay huge cable bills with a single online service.

Netflix at the beginning of the year noticed that more and more people are using VPN services to access the service just so that a better content library is in their hands. The customers have been complaining for quite a while now that the content library they have for access for their particular region is not enough. Furthermore, the comparison between the US content library and all other libraries is not acceptable to Netflix’s users. But according to the company, it is not in their hands to design a different catalogue for all regions.

It was previously reported that content owners who have all the rights were pressurizing the streaming giant to block and ban the geo dodgers. The Netflix world is not happy with the move but that is how it will go. But it is not about the domestic content library or the international market, sources suggest that the streaming catalog is rapidly shrinking.

The company had almost 8,103 titles in total in 2014 out of which 6,494 were online movies and 1,609 were TV shows. The content library was immense, extensive, and diversified. But as of now the company only offers if customers 5,532 titles which shows a massive 32 percent decline within two year. Netflix now has 4,335 movies and 1,197 TV shows.

Netflix said that it would come up with a better streaming catalog and with time the catalog will improve instead it is only shrinking. The reason of this is still unknown but this has not affected the positive growth of the company globally. But that is how movie and TV shows contracts work with Netflix. For instance, The Wolf of Wall Street and the Hunger Games: Catching Fire deals both expired in August last year and the firm chose to not renew it. These are just two movies and there might be whole bunch of other contracts which the streaming giant would have let go after expiration date.

Facebook Inc.'s Safety Check Malfunctioned After Terrorist Attack in Pakistan

The social media network publicly apologized for the malfunction of its safety feature.

The Safety Feature on the social media platform, Facebook Inc. has been there for a while now however, it is far from perfect yet. Yesterday, apparently the Safety Check feature malfunctioned; since there was a terrorist attack in Lahore, Pakistan, the social media network enabled its safety feature. However, instead of the people sitting in Lahore, the website sent push notifications to people all across the Pacific asking them if they were safe.

The blast happened at Gulshan-I-Iqbal in Lahore, Pakistan at a park on Sunday which left 65 dead and hundreds terribly injured. Most of these victims and casualties included women and children as the blast happened in a park, as per the reports. However, Facebook enabled its safety check feature which it usually does in case a disaster of such magnitude or a natural disaster occurs anywhere in the world. The sole purpose of the safety check is to ensure that people in the affected areas are safe and it has become another way of families to reach their loved ones and know if they are okay or not.

However, this time, the safety check feature on the social media website malfunctioned and sent push notifications to people where all across the globe. The social media organization has come forward and apologized publicly for this mishap and addressed it as a ‘glitch’ and ‘bug’ in their system. Even though a lot of people were affected because of this incident, the feature failed to serve its purpose and did exactly opposite of what it was actually intended to do.

The company has a user base strength of over 1.55 billion and it has not yet disclosed how much of these active users were affected by this glitch in their system. The news came out after a number of people expressed their frustration and annoyance at the confusing notifications they were receiving from Facebook. The people who reported this glitch in various cities include people from Washington D.C., London, New York etc.

These people who received these push notifications stated that they received notifications of a blast near their area and the location was not even specified which caused a panic as they believed that the blast took place in their own city. However, there were only a few people who faced this issue in those areas while others did not receive any such notification from the social media site. The social media company is still working on what went wrong with the feature however this is not the first time something like this has happened with the specific feature.

In October 2014, the social media network introduced this safety check feature which was meant to keep users informed regarding any natural disaster that took place in their city including earthquakes, cyclones etc. However, they pondered over human based attacks as well and decided that they would enable the feature for such incidents as well. In November last year, during the Paris Terrorist Attack, the organization enabled the safety feature so users were able to inform their loved ones that they were alright. Since then, the safety feature has been activated for numerous such events especially in the first three months of 2016.

Despite the fact that this false alarm annoyed and confused a lot of Facebook users, it might not be as bad as it seems as it managed to keep people of the world informed regarding such an attack in another country.