SoftBank and Axiata Group announced Tuesday an investment of $60 million by the Japanese company in ADA, a digital analytics, artificial intelligence (AI), and marketing company in the Malaysian telecom’s conglomerate.
The investment is aimed at expanding and speeding ADA’s analytics, data and AI digital marketing business in Asia, Axiata and SoftBank said in a joint statement. ADA currently serves 1,300 customers in the region.
In addition, Daichi Nozaki, SoftBank Vice President and Head of the Enterprise Business Unit’s Global Business Division, will join the ADA board in mid-May 2021.
SoftBank Corp. Representative Director and Chairman Ken Miyauchi said the ADA investment enables his company to embark on its “Beyond Japan” business strategy.
“We will utilize ADA’s know-how in data and AI, and its support structures,” Miyauchi told a virtual news conference. “And by closely collaborating with ADA, I’m confident we can propose new digital marketing solutions to companies in Asia and help support their digital transformation.”
The investment is also in line with SoftBank’s growth strategy announced during its initial public offering in 2018, he said.
With the investment, SoftBank will hold a 23.07 percent stake in ADA, which has a valuation of 1.07 billion ringgit ($260 million). Axiata Digital Services remains ADA’s majority shareholder at 63.47 percent.
Japan’s Sumitomo owns a 13.46 percent stake.
Also, Axiata Group President and CEO Izzaddin Idris said both Axiata and SoftBank discovered they have common ground, and that ADA could fit well with some of SoftBank’s existing businesses.
ADA aims for a $2 billion valuation in the next five years across Southeast Asia.
“We have no immediate plans to spin off ADA via a public listing,” Izzaddin said. “Listings are to raise capital, but ADA is already raising capital without listing,” he added.
ADA CEO Srinivas Gattamneni said the $60 million investment would be used to develop a big data platform and AI models focused on digital marketing and the automation of content creation for the advertising industry.
Miyauchi said SoftBank sees tremendous potential in digital marketing, digital communication, digital automation and security services — with digital marketing in Asia as a promising growth area.
The latest advertising statistics show that as of January 2021, there were 5.22 billion unique mobile phone users in the world, as DataReportal noted. This makes up 66.6 percent of the total global population.
It also marks a 1.8 percent year-over-year increase from January 2020. In this one year, the world gained 93 million more mobile phone users. If these digital marketing statistics continue to trend, we’ll be seeing even more mobile phone users over the coming years.
Robinhood’s IPO thwarts as it ponders offering U.S. IRA
Popular investing company Robinhood Markets began trading on Thursday its initial public offering at $38 a share, followed by a 10 percent drop, and closing at $34.90. This came following an announcement on Saturday its plans to launch U.S. retirement accounts as an endeavor to raise its bidding.
The investing platform had aimed to raise an estimate of $2.3 billion, with an offer of 55 million shares assessed between $38 and $42, with an anticipated market value of $35 billion.
Despite Robinhood’s attempt to allocate up to 35 percent of its shares to retail, a modest 20 percent went to retail indicating less interest than expected, according to The New York Times.
In a bold move, the company gave its users the chance to employ their investments in its IPO shares, as an additional chance to engage in the platform’s stated mission: democratization of finance.
Providing users with individual retirement accounts (IRA) who have tax advantages of saving money for their retirement would give Robinhood the chance to expand its field.
According to the Investment Company Institute, Americans carried $12.6 trillion in IRA by the end of March, which will allow the online brokerage firm to tap into a vast market by offering tax benefits to those saving for retirement.
This initiative will execute the company’s vision of setting aside a third of its shares for customers. This will allow them to directly acquire shares through its platform, which is extremely unusual for IPOs since it reserves shares for institutional buyers.
Robinhood will allow users to indulge in commission-free trades on stocks, and cryptocurrencies, in an attempt to address and gain popularity amongst a younger audience.
“We are interested in building more account types, including IRAS and Roth IRAS, we’ve been hearing that a lot from our customers. We want to make first-time investors into long-term investors,” Robinhood CEO Vlad Tenev said in response to investors.
Also, this could be interpreted as another attempt to enhance its reputation following its investigation with financial regulators.
Last month, the financial platform agreed to pay approximately $70 million preceding the regulator’s accusation of showing its userbase misleading information.
In the assumption that the implemented method survives, the California-based firm might still encounter some financial implications.
The fact is that Robinhood may obtain about 75 percent of its income from transaction-based revenues, which is nearly triple of its competitors’. And since it makes an average of 2.5 cents for $100 traded, this puts it more at risk to lose some of its userbase if they began trading at a lot less than $100 on the app.
The company’s revenues exceeded all analysts’ expectations as its revenue experienced a roaring soar of 245 percent last year alone. Then, in the first quarter of 2021, the company reached $525 million.
One of the most influential reasons leading to the platform’s popularity is the fact that it does not charge trading commissions, nor does it require customers to carry big balances. Robinhood makes most of its money by funneling investors’ orders towards big trading firms, such as Citadel Securities.
Since most of the accounts on its platform are retail traders, the online brokerage has about 18 million funded investment accounts.
Preceding to the firm’s April-June revenues – which witnessed a rise of estimated 124 percent to 135 percent – the company is expecting a plunge in its July – September revenues.
In cryptocurrencies, Robinhood is foreseeing a lower level of trading activity since prices of Bitcoin and other cryptocurrencies have been dropping since its peaking earlier in April.
Robinhood openly filed for its IPO earlier this month, unveiling last year’s profits with a pure income of $7.45 million on net revenue of $959 million.
It is worth highlighting that experiencing a slight drop on the first day of trading may not necessarily signal trouble times ahead for the company. During 2012, Facebook, for example, had a catastrophic public offering $38, and currently dominate the social networking company’s stakes that stands at a successful $358.
Uber shares drop as Softbank plans to sell 45 million in stakes
Uber shares tumbled on Wednesday with more than 4.5 percent in extended trading, following a report stating that SoftBank is selling around $2 billion worth of shares, in a definitive attempt to recover from lost bets on Didi and other investments.
Japanese telecommunications and technology multinational conglomerate Softbank is selling a whopping 44 million shares in Uber as a final effort to contain around $4 billion in losses due to its investment in Chinese ride-hailing titan Didi, according to a CNBC report.
Earlier this week, The Financial Times reported that Softbank’s Didi share loses were approximately around $4 billion due to China’s latest regulatory attack on Big Tech.
By selling 45 million in stakes in the San Francisco-based ride-hailing company, Softbank Vision Fund will minimize its stake in Uber by roughly a third.
Due to Didi’s plunge, Uber endured a 5 percent drop in extended New York trading.
Reuters reported that the Japanese technology investment group decided to take the initiative to put its plan into action was not based on the recent tumble in Didi’s value, but mostly because the timing seemed convenient to take some profit.
Back in 2018, Softbank invested around $7.6 billion into Uber, and increased its investment to $333 million in the following year.
It is worth highlighting that all three companies are intertwined.
Softbank is Didi’s largest shareholder with a stake of more than 20 percent, while Uber also owns an estimated value of 13 percent in the Chinese ride-hailing app, and Didi acquired Uber China from Uber back in 2016 – where Uber was a huge pre-IPO shareholder, owning around 12 percent of the firm.
In the recent months, with Beijing tightening its noose on Big Tech firms, Chinese trading companies trading in the U.S., Hong Kong, and mainland China witnessed a sharp plunge in its market value.
Didi’s shares experienced an influential 40 percent drop since the Beijing-based firm began trading on the New York Stock Exchange (NYSE).
Two days after Didi debuted on NYSE, China’s internet regulator instructed app stores to remove Didi from its platform. This was announced under the pretense that the Chinese ride-hailing company was involved in unorthodox performance of collecting users’ personal data.
Google’s 2021 Q2 soars as antitrust grip tightens
Google’s parent company Alphabet Inc, recorded on Tuesday a rising profit in second quarter revenue, despite heated antitrust regulations and prosecutions, the search giant marked its highest mark so far of quarterly revenue.
Amidst the latest antitrust cold war between Big Tech companies and Washington in the last quarter, Google and Alphabet Inc. tallied in sales, marking the best quarterly revenue for the search engine giant.
“Our strong second quarter revenues of $61.9 billion reflect elevated consumer online activity and broad-based strength in advertiser spend,” Alphabet Inc. and Google’s CEO Sundar Pichai said in a statement.
“Again, we benefited from excellent execution across the board by our teams,” he added.
As Google found itself under the spotlight from some of the biggest antitrust lawsuits, the company’s earnings performance came as a slight breather amidst all the regulations it has been subjected to lately.
Earlier this month, an assembly of state attorneys filed a lawsuit against the tech titan under pretense that its Play Store violated major antitrust regulations. Google’s alleged anticompetitive behavior could have caused it a major marketplace for its apps.
The lawsuit concentrated on the 30 percent fees Google was charging from developers to sell digital products and services through its Play Store.
By the end of June, the search engine’s second quarter defeated analysts’ estimates of $56.15 billion by scoring its parent company Alphabet Inc. a massive $61.88 billion in sales, grading Google one of its highest quarterly revenue so far.
Alphabet Inc.’s share price witnessed a higher ascend in in-after hours trace preceding Google’s release of its quarter results of $2.819 as of time of writing.
It is worth highlighting that Google’s 2020 Q2 revenues suffered a major downfall of $37.99 billion in revenue – in comparison to its 2021 revenue – marking 2021’s Q2 as a major boost for the platform and its parent company.
Since the Biden administration began tightening its antitrust grip around Silicon Valley giants, Big Tech firms acquitted themselves of any antitrust wrong doing. According to these firms, if the company controls a market then it has the right to control the prices.
To most tech companies, deciphering the antitrust law is easy.
Since most of their services are free to consumers, it is advertisers and other consumers who are paying the price, literally. In some cases, some of these platforms keep their prices low and run a thin margin on its retail business.
Despite the constant fight between Google and antitrust regulators for its alleged anticompetitive approach, the rise in its quarterly revenues is a clear demonstration of the power Google still has as one of the big-league global players.
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