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Monday markets: ASX media stocks’ $8bn hit, Twitter’s $2m loss after failing to declare ad revenue

The macroeconomic environment continues to spell trouble for investors as almost $8bn is wiped from valuation of ASX listed media stocks in 2022.

Rising inflation continues to influence speculation and doubt surrounding the value of media and tech stocks this week.

Share prices of  major television, publishing and radio and billboard advertising companies have fallen between 19 per cent and 44 per cent since January, compared to a fall of 4.6 per cent for the benchmark ASX 200.

Twitter:

  • Twitter continues its dramatic buyout tussle with Elon Musk, with official filings suggesting he does intend to complete the acquisition.
  • One cause of Twitter stock’s relative stability is Musk’s announcement of his approximate 9% stake in the platform in early April, which saw Twitter’s share price share shoot up by 27% the day after the news of Musk’s filing. Investors and market spectators alike are in for an interesting period of speculation. It’s undetermined yet how Musk’s saga with the company will benefit or derail investors in the long-term, but all signs so far show that Musk’s affiliation has bolstered the position of TWTR investors while the stocks of its social platform peers continue to tumble.
  • Twitter Australia paid an income tax of only $149,812, compared to $1.3 million the year before, a dramatically minute figure in contrast to its APAC peers. Google Australia paid $85 million in taxes in 2021, while Meta Australia paid $24 million, and Netflix Australia $868,000.
  • Twitter does not disclose in its report how much money it makes from advertising on its platform locally.
  • Twitter Australia ultimately posted a $2 million loss amidst rising sales and marketing expenses.
  • Twitter’s share price sits at 40.16 USD today, up 0.63% since markets closed at 39.91

Meta:

  • Meta stocks continue a tragic decline, seemingly still suffering the consequences of Snap’s profit warning in May.
  • Meta stocks today trade at 190.78 USD, a loss of 4.06% since markets last closed at 198.86.
  • Sheryl Sandberg, outgoing Meta COO of 14 years and out-of-touch feminist icon, revealed that she unloaded more than 90% of her Facebook stock over the last decade.
  • Over the past decade, Sandberg has sold over 75% of her after-tax shares through regularly scheduled share sale programs, according to research firms that track the sales. In total, she sold over 22 million shares for more than $1.7 billion, according to analytics firm VerityData.
  • Despite its battered share price, Meta continues to stridently embrace its metaverse ambitions. Meta confirmed on Tuesday that it will change its Nasdaq ticker to META beginning June 9, revealed after a filing with the Securities and Exchange Commission (SEC).

Australian media stocks: fast facts

  • Volatile macroeconomic conditions are rendering Australian media companies like Nine, Seven West Media, News Corporation and oOH!media more vulnerable to swinging economic conditions like rising interest rates and the potential of a suspected recession.
  • Media companies will be susceptible to the unpredictability of advertising revenue in this period.
  • Seven West Media has posted a more than $500 million loss in valuation so far in 2022, while Nine Entertainment Co. posted a 28% loss in market valuation in the YTD of $1.5 billion.
  • Nine owns 65% of online real estate platform Domain, which has lost $1.6 billion in value so far this year. Approximately $1 billion of Nine’s loss can be attributed to Domain’s decline.
  • Rupert Murdoch’s News Corporation has seen a 23% decline in share price in the YTD. The News Corp share price has come under selling pressure this year, with the ASX 200 share down 23.5% since the opening bell on 4 January.
  • Radio broadcaster Southern Cross Austereo appears to also have suffered a significant $208.7 million loss in 2022, its valuation crashing 32% in the market.
  • Netflix Australia’s aforementioned paltry tax contribution was chalked up to a reported $2.4m profit in Australia by the company in 2021, despite suspicious estimates that the company generates hundreds of millions in revenue from subscribed customers across the country.

Dentsu:

  • Dentsu’s share price has suffered a significant tumble, trading at 4,265 JPY today, down 3.40% since markets closed.
  • Last week, Dentsu shares traded at 4,305 JPY, meaning the stock has been slowly declining throughout the week.

Omnicom Inc.:

  • Omnicom stocks have taken a hit, trading at 71.63 USD, a drop of 2.22% since markets last closed.
  • The board of Omnicom Group Inc. has announced that it will pay a dividend on the 8th of July, with investors receiving US$0.70 per share. This means the annual payment is 3.9% of the current stock price, which is above the average for the industry.
  • Omnicom last week named Matt McNally CEO of Omnicom Health Group.
  • Omnicom recently launched their Supply Chain IQ Score, which OMG claims is the industry’s first supply-chain based media activation tool, allows media planners to view physical, digital and in-transit SKU inventory data and shift media investment accordingly.

Publicis Groupe:

  • Publicis Groupe stocks are trading at 51.06 EUR today, down 0.47% since markets closed at 51.30 EUR.
  • Publicis recently named Chris Kaye as head CEO of creative practice, Publicis Groupe UK.

Havas Group:

  • Vivendi, French holding company of subsidiary Havas, traded at 11.35 EUR today, up 0.35% after markets closed at 11.31 EUR.
  • Havas Media Group announced last week that it entered into a global partnership with attention firm Lumen Research to create a group of tools that enable planning, buying and media optimization around attention metrics.
  • The addition of attention data to Havas Media Group’s Mx operating system is currently rolling out across 150 of Havas Media Group’s global markets and will be available to client teams from June 2022.

WPP:

  • WPP stock is on the up today, trading at 924.00 GBX, an increase of 0.37% and 3.40 GBX today since market close.
  • WPP’s next dividend payment this week will be UK£0.19 per share, a decrease from last year when the company paid a total of UK£0.31 a share to shareholders.
  • The decline follows a disappointing trend of declining profits for investors, with WPP’s earnings per share plummeting by approximately 36% a year over the previous five years.
  • WPP has affirmed their efforts to ensure diversity in hiring processes, hiring a new global chief talent and inclusion officer, LJ Louis, formerly of WeWork.

Alphabet Inc.:

  • Alphabet stock has dropped today, trading at 2,290.82 USD a share, a decline of 61.63 USD (2.62%).
  • At Alphabet’s annual meeting on June 1, shareholders approved a 20-for-1 stock split to take place next month. The stock is scheduled to split on Monday, July 18th.
  • Amazon, Tesla, and Shopify have all additionally announced stock splits this year.
  • Courts today ordered Google to pay former deputy premier of NSW John Barilaro $715,000 in defamation damages over two videos posted by Jordan Shanks (knows as friendlyjordies) to YouTube. Alphabet Inc’s Google, which owns content-sharing website YouTube, earned thousands of dollars by hosting the two videos but failed to apply its own policies to prevent ‘hate speech, cyberbullying and harassment’.
  • Alphabet shares will be distributed to shareholders after the market closes on Friday, July 15th. Shareholders on record as of July 1, 2022 will receive 19 additional shares of Alphabet stock for every one share they own after the market close on July 15.

News Corp:

  • News Corp stock is trading at 24.46 AUD, a drop of 0.27 AUD (1.09%).
  • The decline continues the trend of News Corp’s underperforming stock.
  • News Corp announced last week that it completed the acquisition of the Base Chemicals business from S&P Global Market Intelligence. News Corp acquired Base Chemicals for $295 million in a cash transaction. In its most recent fiscal year, ending November 30 2021, Base Chemicals generated approximately $65 million in revenues.

Snap Inc.:

  • Snap continues its tumble down the stock market, with its widely publicized financial struggles seeing the share price currently sit at 14.49 USD, down−0.41 (2.75%).
  • Snap Inc. last week launched a new ad product, Dynamic Travel Ads, which enables travel brands to seamlessly create a variety of ads based on their product offerings.
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