4.11k followers • 19 symbols Watchlist by Motif Investing
With the growing adoption of electronic payments in emerging markets, global issuance of payment cards is projected to grow 36% to 18.3 billion during 2011-2016.
PayPal Holdings, Inc.
American Express Company
Global Payments Inc.
FleetCor Technologies, Inc.
Total System Services, Inc.
Jack Henry & Associates, Inc.
Euronet Worldwide, Inc.
ACI Worldwide, Inc.
Green Dot Corporation
Net 1 UEPS Technologies, Inc.
VeriFone Systems, Inc.
Increasing demand for business information services and an encouraging 2019 adjusted earnings guidance are driving S&P Global (SPGI) stock.
(Bloomberg) -- Facebook Inc. is consolidating its various payments features into a single product with a new name, with plans to roll it out across all of the company’s apps.Facebook Pay is a rebranding of a number of existing payment features into one user experience across the social network’s apps, the company said Tuesday. You can already make payments in the form of donations and in-app purchases inside various Facebook-owned products, and soon you’ll be able to do that across Facebook’s apps through one system that will store user credit and debit cards.The move comes as Facebook is integrating its services, especially the messaging applications, so that users can easily move between apps and understand Instagram, WhatsApp and Messenger are owned by the same company. Facebook introduced new corporate branding earlier this month to give more clarity on what products it owns, and the company is unifying its three messaging services so users of one can send messages to people on the others.Some critics have said these efforts are a way for Facebook to defend itself against a possible breakup. The company is under antitrust scrutiny from multiple regulatory agencies, and the idea of unifying its branding, and its messaging and payments products, could be an effort to keep regulators from trying to spin off parts of the Facebook empire.People won’t be able to use Facebook Pay to hold cash, but can use it to store their credit or debit card information for easier use. Existing payments partners like Stripe Inc. and PayPal Holdings Inc. will continue to process payments for the Menlo Park, California-based company. Facebook is rolling out Facebook Pay to its core social network and Messenger in the U.S. beginning this week, with plans to bring it to Instagram and WhatsApp down the line as well.Facebook is also building a separate digital wallet, called Calibra, for storing and spending its proposed digital currency Libra. That wallet doesn’t yet exist and a Facebook spokeswoman said it is a separate effort from Facebook Pay.\--With assistance from Julie Verhage.To contact the reporters on this story: Kurt Wagner in San Francisco at firstname.lastname@example.org;Sarah Frier in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios...
(Bloomberg Opinion) -- China’s most ubiquitous company is hiding one of its most valuable assets. That needs to change.Tencent Holdings Ltd., best known for the WeChat messenger that almost everyone in the country uses, has a growing fintech business. But it’s getting overshadowed by the games and social media divisions. By spinning it off into a new company, with a move to a separate listing, management could unlock as much as $230 billion in value. That would make the entity China’s fourth-largest listed company and the world’s sixth-biggest financial services firm.Such a move could help Tencent retake some of the limelight that it’s about to share with Alibaba Group Holding Ltd. once that company lists in Hong Kong. Alibaba’s fintech unit, Ant Financial Services Group, already functions as a separate business with the e-commerce giant holding a 33% stake. At Tencent, fintech and business services accounted for 26% of revenue last quarter. The Shenzhen-based company is due to report third-quarter earnings late Wednesday.I estimate that revenue from Tencent’s fintech business grew in excess of 70% last year.(1) The vast majority of that was payments. Yet Tencent also offers other products such as wealth management and has a 30% stake in WeBank, China’s first online-only bank, which was founded five years ago. Data on its fintech profits are hard to ascertain, yet information disclosed by Alibaba shows that Ant Financial was unprofitable last year, so Tencent could be in a similar boat. That’s not necessarily a bad thing. The two rivals are startups in the classic sense, using fast revenue growth driven by marketing and incentives to gain ground fast. A major reason why both have lost money in recent years is due to low take rates, the commissions received from processing payments, because they’ve offered discounts to consumers and merchants. A turnaround could be near, Sanford C Bernstein senior analyst David Dai wrote in a recent series on China’s fintech sector. He estimates that a maturing market will ease cut-throat competition and allow both companies to take a greater share of the money that sloshes through their payments platforms.As a result, Tencent’s payment business (TenPay) alone could be worth $137 billion, compared to $127 billion for Ant’s AliPay, the Bernstein team figures. HSBC Holdings Plc uses two methodologies(2) to come up with an estimated value of around $128 billion. Throw in the other products, and Bernstein calculates a base-case valuation for Tencent’s fintech unit of $160 billion, going as high as $230 billion. This indicates that 40% to 58% of Tencent’s current market cap is locked up in this hitherto hidden division. Bernstein has a base case of $210 billion for Ant, reaching as high as $320 billion.Payments spinoffs have proven to be lucrative in the past. EBay Inc. proved it with PayPal Holdings Inc. in 2015, with the latter posting a 177% normalized return since then, outpacing the 145% rise in the S&P Data Processing sub-index which includes Visa Inc. and Mastercard Inc. PayPal also trounced both eBay (35%) and the S&P 500 (49%). Square Inc., another payments provider, has been one of the hottest stocks of the past decade, returning more than 590% since its initial public offering in 2015.A more recent example comes from India, where Walmart Inc. is reported to be spinning off payments business PhonePe from local e-commerce company Flipkart Group, which it acquired last year. That transaction could turn a $20.8 billion startup into two unicorns with a combined value of more than $30 billion. Tencent doesn’t need to rush to list this fintech unit. Appetite for mega IPOs is likely to be satiated by Alibaba’s Hong Kong listing and that of Saudi Aramco over the next few months. And there’s a long runway of big startups ready for their moment in the sun. By merely making it a separate entity, management can signal intent and allow investors to start re-rating Tencent’s stock accordingly.An offering may not even be necessary, since Tencent is already sitting on more cash than it needs. Instead, the company could distribute shares in Tencent Fintech to existing shareholders, and then directly list the stock. That’s similar to the approach advocated by activist investor Dan Loeb for a Sony Corp. split.Tencent is sitting on a bright light in this fintech unit. Time to let it shine.(Updates to include reference to third-quarter earnings schedule in third paragraph.)(1) The "others" category includes fintech, cloud, film & TV. Tencent noted that fintech is the major component and gave a figure for cloudbut not content.(2) HSBC Approach 1: valuation per user. Approach 2: Using Tencent operating margins applied to its payments business, then comparing to peers.To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Patrick McDowell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
If you are looking for a fast-growing stock that is still seeing plenty of opportunities on the horizon, make sure to consider Global Payments (GPN).
(Bloomberg) -- There aren’t many jobs in Davidson, North Carolina, that offer the flexibility and decent pay that Alfonso Auz was looking for. He tried a bunch of gigs, including driving for Uber, before eventually settling on DoorDash Inc. Auz, 47, usually makes at least $150 a day delivering food from restaurants in his hometown, without having to commute to the nearest job center, Charlotte, 40 minutes away. “I usually turn on the app while I’m still at home,” Auz said.Towns like Davidson are at the center of a strategy that secured DoorDash a firm position atop the U.S. food delivery market, said Tony Xu, DoorDash’s chief executive officer. The suburbs, he said, were underestimated by competitors, giving DoorDash the opportunity to forge nationwide exclusivity deals with the likes of the Cheesecake Factory and Chili’s. “While our competitors focus on the cities, we focused on the suburbs,” said Xu. “That’s how we were able to become the market leader.”The other part of the strategy, according to analysts, rival businesses and venture capitalists, involves a war chest of about $2 billion. That’s how much DoorDash has received from investors in the six years since the business was established, and almost two-thirds of it came in the last 18 months. SoftBank Group Corp., the Japanese conglomerate whose investments have reshaped Silicon Valley, took an interest in DoorDash last year and helped lift the valuation of the unprofitable company to $12.6 billion this past May. Other backers include Sequoia Capital and Singaporean government investment funds.Today, DoorDash is the prime example of SoftBank’s investing philosophy seeming to work as intended. Behind SoftBank’s $100 billion tech fund is the idea that an ample supply of money can propel a company to the top of a market. DoorDash accounts for 35% of online food delivery sales in the U.S., according to Edison Trends, a market research firm. DoorDash’s rise has come at the expense of the other major delivery apps from Uber Technologies Inc., Grubhub Inc. and Postmates Inc., which have all lost share in the last year. DoorDash is in 4,000 towns, compared with 500 cities for UberEats. “DoorDash came out of nowhere,” said Hetal Pandya, an analyst at Edison Trends.Critics say DoorDash followed the SoftBank model down a destructive path of growth at all costs and a backward business model that doesn’t account for profit. DoorDash may find itself unpalatable to public market investors, who have largely turned against big unprofitable stocks. The company has been eyeing an initial public offering next year. “We believe we have the right unit economics to enable us to build a sustainable and profitable business,” said a spokeswoman for DoorDash.DoorDash’s spending has impacted competitors. Grubhub shares fell 42% last week in their biggest one-day drop ever, after the company gave a dismal forecast and published an unusual, 10-page manifesto signed by the CEO and financial chief. In it, they throw shade at competitors, saying Grubhub is the only profitable food delivery business. A week later, Uber reported fewer-than-expected food delivery orders in an otherwise favorable quarter. The stock fell to an all-time low the next day.Fast food restaurants aren’t faring much better. Delivery apps charge restaurants fees, sometimes as much as 30% of sales, which cut into profit margins. That has pushed larger chains to negotiate lower fees in exchange for exclusive agreements, as Shake Shack Inc. did with Grubhub. However, going with the third-place app contributed to an underwhelming quarter and reduced sales targets for the burger chain, whose stock dipped 21% Tuesday. The old-fashioned way of hiring drivers isn’t a reliable option, either. The CEO of Papa John’s International Inc. said Wednesday that a shortage of drivers is forcing the pizza company to work with the app providers.Just a few years ago, DoorDash was struggling to find investors and agreed to cut its share price to raise capital. By late last year, annual sales had tripled. But questions remain about how sustainable the business is. Over the summer, a DoorDash investor prepared an informal presentation arguing the merits of a sale of the company to Uber, according to a copy of the document obtained by Bloomberg.Uber, which also counts SoftBank as its largest shareholder, is sitting on $12.7 billion in cash, and its CEO, Dara Khosrowshahi, told analysts on a conference call this week that the company is open to acquisitions in food delivery. However, Khosrowshahi has also committed to cut spending in service of turning a profit by 2021. Representatives for the companies declined to comment on the prospect of a merger. Mike Walsh, an early Uber investor, said DoorDash is probably too big for Uber to swallow.Instead, DoorDash made a purchase of its own. The company spent $410 million in August for Caviar, a food delivery app owned by Square Inc. “We have a lot of money in the bank,” said Xu, the DoorDash CEO. “We are in no rush to spend it all.”Geographic comprehensiveness comes at no small expense to DoorDash, but it’s what draws many restaurant operators to the app. About 80% of Chili’s locations are in the suburbs, and DoorDash is helping bring in customers who may not otherwise eat there, said Steve Provost, the chief concept officer for Chili’s parent company Brinker International Inc. “The idea of non-pizza delivery in the suburbs is a relatively new phenomenon,” he said.DoorDash’s sprawl throughout American suburbia hasn’t hurt its position in major cities, though. Holly Richards, a 29-year-old executive assistant in San Francisco, said she prefers DoorDash because of its competitive prices, wide selection and, most importantly, its generous refund policy. UberEats would only give her a 20% off coupon when she complained that her Indian dumplings arrived cold, Richards said: “DoorDash is the only company that has offered me a full refund for food that did not arrive in a timely matter.”\--With assistance from Leslie Patton and Lizette Chapman.To contact the author of this story: Candy Cheng in San Francisco at email@example.comTo contact the editor responsible for this story: Mark Milian at firstname.lastname@example.org, Anne VanderMeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Nov.11 -- Ari Sarker, co-president for Asia-Pacific at Mastercard, discusses the launch of their “Fintech Express” platform in Asia-Pacific, how the platform works, their business strategy, blockchain technology, their pullback from Libra and his outlook for the company. He speaks on “Bloomberg Markets: Asia” from the sidelines of the Singapore FinTech Festival in Singapore. (Corrects spelling of company's name in headline and description. The clip was originally published on Nov. 11)