Baidu to Buy Chinese Livestreaming Giant in Big Social Foray

(Bloomberg) -- Baidu Inc. agreed to buy Joyy Inc.’s livestreaming business for China, a deal that will mark the search engine giant’s biggest foray into the fastest-growing arena of digital video.The company will pay about $3.6 billion in cash for Joyy’s YY Live, according to a statement Monday. Baidu unveiled the deal as it posted revenue for the September quarter that beat analysts’ estimates.Once the runaway leader in desktop search, Baidu is trying to adapt its business to the mobile era but losing ground piecemeal to rivals such as ByteDance Ltd. By taking over Joyy’s YY streaming network, Baidu gets ahold of a $1.8 billion business with 4 million paying users who splurge on virtual gifts to tip their favorite performers. Joyy will keep the operations of its other video and streaming platforms for users outside China.The YY deal could help Baidu catch up in the heated arena of online entertainment. To compete for users and advertisers, Baidu’s core search app is morphing into a platform hosting a wide array of content from articles to videos and livestreaming, not unlike Tencent Holdings Ltd.’s WeChat. Its Netflix-style iQiyi Inc. is also going head-to-head with services run by Tencent and Alibaba Group Holding Ltd.Dissecting China’s Crackdown on Its Internet Giants: QuickTakeCompetition aside, China’s attempt to rein in its most powerful private-sector companies remains a source of concern to investors. The country’s antitrust watchdog last week unveiled a raft of regulations to root out monopolistic practices in internet sectors including search and e-commerce. Baidu -- which operates in a country where Google search doesn’t exist -- has repeatedly run afoul of regulators for promoting content deemed problematic.Baidu forecast sales of 28.6 billion yuan ($4.2 billion) to 31.3 billion yuan for the December quarter, compared with estimates for 29 billion yuan. Revenue was little changed at 28.2 billion yuan in the three months ended September, versus an average forecast for 27.5 billion yuan.Started in 2005 as a chat tool for gamers, YY was among the pioneers of a way to monetize livestreaming by taking a cut of virtual gifts bestowed by fans. In 2014, its parent launched Twitch-style Huya Inc. using the same model. That unit was later spun off and is now in the middle of merging with DouYu International Holdings Ltd. to create a $10 billion game-streaming giant controlled by Tencent.Baidu has over the past years expanded its investment into content needed to attract and keep users, backing social media platforms including Q&A site Zhihu. Longer term, the 20-year-old company is investing in artificial intelligence technology and betting on commercializing AI through smart speakers and self-driving cars. In September, its smart speaker unit received its first independent financing round at a valuation of $2.9 billion.Read more: Down $290 Billion, China Tech Investors Mull Nightmare ScenariosFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P. Read More...


Bank of America: 3 Strong Value Stocks to Buy Now

The prospect of a COVID-19 vaccine hitting the market in coming months – rather than years – and chance it offers to control the novel virus, has investors in a mood to buy, and fueled the market gains. The S&P 500 is up more than 10% so far in November. So which stocks should you be looking at now?Bank of America analysts have tagged three tech-oriented stocks as likely gainers. All three fit a profile: they boast a Strong Buy analyst consensus rating, and BofA sees their upside potentials starting at 30% and heading up from there. Wix.com, Ltd. (WIX)We’ll start with Wix, the DIY of website construction. Since it hit the scene 14 years ago, this company has built a reputation as the one-stop shop for website construction, building its business on the ‘freemium’ model, offering customers – who are not necessarily website experts – the ability to build and maintain a site – for free. More advanced tools and support are available through the subscription service. It’s a viable model, filling a real need, as evidenced by the company’s $700-plus million in annual revenue.More to the point, WIX shares are up 95% year-to-date, with the growth really taking off in May. Wix’s quarterly revenues have also showed a pattern of increase through 2020, with sequential gains in Q1, Q2, and Q3. The Q3 number hit $254 million.Covering Wix for BofA, 5-star analyst Nat Schindler writes, “We see a big opportunity for Wix to continue its strong momentum as businesses shift online. Wix’s commitment to maintain its aggressive marketing push should ultimately lead to a significant revenue expansion opportunity in out years… we expect 2020 marketing efforts will leave Wix in a strong position heading into 2021.”In line with his comments, Schindler rates WIX a Buy, and his $350 price target implies an upside of 47% for the next 12 months. (To watch Schindler’s track record, click here)Overall, Wix’s shares have a Strong Buy analyst consensus based on 8 reviews, breaking down to 7 Buys and 1 Hold. The stock is selling for $238.27, and its $323.13 average price target suggests room for 35% upside growth next year. (See Wix stock analysis on TipRanks)Peloton Interactive (PTON)Next up, Peloton, is an upscale exercise equipment manufacturer. Peloton’s home exercise bikes offer users opportunity to connect online to classes, instructors, music, and other content designed to make spinning more endurable at home. Exercise is a necessity, but we all know how difficult it can be to stick to regimen solo; Peloton uses connected tech to fill the gap for well-heeled customers willing to spend extra to stay in shape and comply with social lockdown rules.5-star analyst Justin Post, rated 26 overall in the TipRanks database, wrote the Bank of America note on Peloton, and he sees both a solid position now and a clear path forward for the company.“[We] think Peloton is building a content advantage that starts with its premium instructors. Peloton’s deal with Beyoncé will add new premium content, and we can envision deals with other recording artists and sports personalities… We also note that the 25-34 group is the fastest growing segment for Peloton bike consumers, a huge opportunity for Peloton. When bike demand eventually slows, Peloton can lower bike ASPs, launch CPO (Certified Pre-owned) bikes and add more targeted content partnerships, which should further unlock demand in this age group,” Post wrotePost gives the stock a $150 price target, implying a 49% one-year upside, and rates it a Buy. (To watch Post’s track record, click here)The Strong Buy analyst consensus rating on Peloton is based on no fewer than 22 Buy reviews, which outweigh 3 Holds and 1 Sell. PTON’s average price target is $133.12, suggesting a 32% upside form the current trading price of $100.30. (See PTON stock analysis on TipRanks)Avalara, Inc. (AVLR)Last but not least is Avalara, a provider of cloud-based software for automating business tax compliance. Tax codes – especially across international borders or other jurisdictional boundaries – are complicated, and Avalara bill itself as a solution for small- and mid-sized businesses remain in compliance with various laws. The company’s platform integrates business, tax, and accounting apps for customers around the world. And at a time when it may not be possible for a small business to just phone up the tax guy and make an appointment to go over the books, an automated solution can be a lifesaver.In his note of the stock for BofA, Brad Sills, another of the firm’s 5-star analysts, sees what he describes as a ‘long runway for growth.’“Billings reaccelerated to 30%+ from 22% in Q2, and indicates that Avalara is a beneficiary of omnichannel sales adoption in SMBs, which drives more complexity in sales tax calculation and filings. While the quarter benefitted from some pent-up demand, we believe these underlying demand drivers are sustainable long term, given increased tax compliance pressure from states and local governments,” Sills commented. Sills rates AVLR shares as a Buy, calling it his top pick. His $200 price target indicates confidence in 32% growth going forward. (To watch Sills’ track record, click here)All in all, Avalara’s Strong Buy rating from the analyst consensus is unanimous, with 10 Buys behind it. The stock is selling for $151, and its $186.3 average price target implies an upside of ~22% for the next 12 months. (See AVLR stock analysis at TipRanks)To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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