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Fly News Breaks for March 19, 2019
FB, SHOP, PYPL
Mar 19, 2019 | 16:14 EDT
Shares of Shopify traded down modestly today on the announcement of "Checkout on Instagram," a feature that will allow users to complete purchases without leaving the app, Jefferies analyst Samad Samana tells investors in a research note. Facebook's (FB) Instagram will charge merchants a selling fee and partner with PayPal (PYPL) for payment processing, the analyst points out. He understands the investor concerns since Shopify partners with Instagram. Samana, however, believes most merchants will continue to rely on their underlying e-commerce platform to complete most online transactions, manage their stores and inventory. Further, merchants succeeding on multiple channels could increase the likelihood of using a platform like Shopify to manage their business, the analyst contends. He points out, though, that if merchants choose to adopt "Checkout on Instagram", PayPal would provide the payment processing for the gross merchandise volume generated on Instagram rather than directing back to a merchant's Shopify store to process the transaction. This could be a headwind for Shopify's Payments revenue growth, says Samana. He keeps a Hold rating on the shares with a $175 price target. The stock closed the trading day down 2%, or $3.68, to $202.09.
News For SHOP;FB;PYPL From the Last 2 Days
FB
Apr 18, 2019 | 16:38 EDT
The S&P 500 notched a small advance on Thursday to end the holiday-shortened week relatively flat as investors did not seem to be rattled by the release of the Mueller report. Earnings from some... To see the rest of the story go to thefly.com. See Story Here
PYPL
Apr 18, 2019 | 09:50 EDT
Same day put buys in Paypal. The stock off 80c to $108 and Apr 108s trade 64 to 72c per contract. Volume is 1.8K against 694 open interest and the bid-ask is now 36 to 41c. The contact is at-the-money and expiring today. Earnings next week, 4/24, and the stock was lower yesterday on a UBS downgrade to Neutral from Buy.
FB
Apr 18, 2019 | 08:09 EDT
Morgan Stanley analyst Katy Huberty said her industry conversations have increased her confidence in a cloud recovery in the second half. Her checks suggest orders from Microsoft (MSFT) will restart in Q2 and rise to above trend levels in Q3 while orders from Amazon (AMZN), Google (GOOGL), Facebook (FB) and Apple (AAPL) are expected to return in Q3. Given this context, Huberty said she prefers Seagate (STX) over Western Digital (WDC) as a play on a cloud capital expenditure recovery, noting that inventory levels position hard disk drives to benefit before NAND, that HDD pricing is structurally better positioned than NAND and her view that Seagate has a better HDD product portfolio to meet cloud demand in the second half of 2019 and first half of 2020. Huberty has an Overweight rating on Seagate and the firm has an Equal Weight rating on Western Digital, which is covered by analyst Joseph Moore.