Monthly Archives: September 2021

Thanks to the unpredictable influence of politics in China, fear has crept into the minds of investors holding and/or considering stocks of many Chinese companies. Alibaba Group Holding (NYSE:BABA) and Tencent Holdings (OTC:TCEHY) are two of China's most powerful technology companies, but these recent fears have sparked stock price declines of about 40% for each since mid-February.

The general notion among investors is that there is often a buying opportunity when quality companies drop in price. But in this case, investors should consider both the pros and cons before deciding on these two tech stalwarts.

Image source: Getty Images.

Alibaba and Tencent are two of the world's largest tech companies, and they are based in a country with the world's second-largest economy -- China. They are massive conglomerates that have a strong footing in the most important aspects of consumer life in China.

Alibaba is an e-commerce company that provides online retail and logistics to more than 900 million consumers in China and more than 1.1 billion worldwide. Alibaba also runs various other business segments, including cloud computing, and it owns 33% of fintech giant Ant Group, which operates Alipay, China's most popular digital payments platform.

Tencent is an internet company that offers a host of payment services, apps, advertising, video entertainment, games, and social networks to consumers in China. More than 1.25 billion users are on Tencent's social media platform, and its digital payments business Tenpay combines with Alipay for roughly 90% of third-party payments in China.

Together, these two companies offer investors broad exposure to different areas throughout the Chinese economy. Alibaba generated $109 billion in revenue in fiscal 2021 (which generally coincides with the calendar year 2020), and Tencent generated $74 billion in its 2020 fiscal year.

Alibaba converts about 10% of each revenue dollar into free cash flow, while Tencent is even more profitable, converting at 20%. This free cash flow trickles down to the balance sheet, resulting in large cash hoards. Alibaba and Tencent currently have the U.S. dollar equivalents of $73 billion and $39 billion on their balance sheets, respectively.

The stocks for Alibaba and Tencent have a total market cap between them of almost $1 trillion ($448 billion and $524 billion, respectively), despite the declines in share price over the past six months. Based on Alibaba's expected fiscal 2022 (the calendar year 2021) revenue of $142 billion and Tencent's expected 2021 revenue of $90 billion, the stocks trade at price-to-sales ratios of 3.1 and 5.8, respectively.

If you look at these companies as "big tech" players in China, comparable companies like Amazon and Microsoft are trading at similar or higher valuations. Alibaba, for example, traded at a P/S or more than seven just last fall, showing how far these stocks have fallen.

Despite the strong cash positions and low valuations of these stocks, it's become evident to investors that political pressures in China may impact business itself. Both Alibaba and Tencent have gotten caught in political messes recently.

Jack Ma, the founder of both Alibaba and Ant Group, ran into issues while trying to bring Ant Group public after he criticized the banking system in China. Regulators flagged the IPO in China, and Ant Group backtracked on its initial public offering (IPO) plans as a result. Ant Group was estimated to have a $310 billion market cap on the public markets, but its failure to IPO hurt Alibaba as a large stakeholder.

Tencent has aggressively donated money to "common prosperity" in China, announcing an amount of 100 billion yuan ($15.5 billion), this year alone. The term has come from angst over excessive wealth in China and political pressure to redistribute wealth across the country. Considering Tencent had 482 billion yuan in revenue in 2020, these donations constitute a significant percentage of overall revenue.

Investors buying shares of Alibaba and Tencent are effectively counting on political pressures to ease and these companies being allowed to operate without much interference from the government moving forward.

Each company continues to grow, so if valuations climb back to where they were in late 2020, the potential upside makes for an interesting investment, to say the least. But the problem is that we can't know for sure what the government in China will do going forward.

Uncertainty is ultimately the problem with Alibaba and Tencent. We can't know the degree to which these companies will be interfered with or for how long. What if Tencent is obligated to donate more of its profits moving forward? What if Chinese regulators decide to break up Alibaba from its stake in Ant Group?

Given the opportunity cost of holding these stocks to find out these answers, it may be a good idea for investors to fully explore other investment opportunities before buying stock in either Alibaba or Tencent.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Read more:

Are These 2 Chinese Tech Giants Worth the Risk? - The Motley Fool

Good morning and welcome to 10 Things in Tech. If this was forwarded to you, sign up here. Plus, download Insider's app for news on the go click here for iOS and here for Android.

Let's get started.

1. A "tsunami" of robotexts is only just beginning. A Supreme Court ruling and an antiquated law mean text messaging is a new frontier for marketers and experts say the number of robotexts and spam from brands is about to rise considerably. Here's why (and how to make them stop).

2. Rumors are swirling about new Apple Watch features. The new Apple Watch, expected to debut in September, is said to have a new blood pressure monitor and a built-in thermometer. The potential new features hint at the tech giant's plans to make the wearable an everyday healthcare device.

3. Insiders describe Amazon's "conversion program" that helps execs adjust. The three-day program, Escape Velocity, is an intensive three-day training course for high-level recruits to get up to speed quickly so they don't "flame out." Take a look inside the program.

4. Best Buy will start selling e-bikes, scooters and mopeds. In a bid to get a slice of what's expected to be a $70 billion electric transportation market, the retailer will soon sell a selection of scooters and mopeds in select stores and online. Get the full rundown here.

5. Residents in some states can soon add their ID to iPhones and Apple Watches to get through TSA. The new tool would let you get through airport security with your phone, the company said. Arizona and Georgia will be the first states to kick off the feature, followed by six others.

6. Google plans to build its own semiconductor chips to power its Chromebooks. Amid a shortage of chips, the tech giant plans to create its own semiconductor chips for Chromebook laptops and computers in 2023. Here's what you need to know about their chip ambitions.

7. Amazon plans to hire 55,000 people into tech and corporate roles. The company intends to ramp up hiring in its retail, cloud, advertising, and satellite businesses. More on the upcoming roles, 40,000 of which will be based in the US.

8. Twitter is debuting "Safety Mode." Codeveloped with digital safety and mental-health experts, the new tool will help users block interactions from "harmful" accounts for seven days. Everything we know about the new feature.

9. Tech giants are scrambling to help ICE build a tool for targeting unauthorized workers. Amazon, Google, and Microsoft attended an event arranged by ICE to discuss the little-known analytics tool. ICE is expected to give out contracts worth $300 million to three tech companies, which will build and maintain the system through 2025.

10. Former Tesla employees told us what they learned from working at the company. Five former execs and engineers, who've all gone on to work elsewhere in the electric-vehicle space, shared what they learned from Tesla, including that doing things unconventionally can be a key to success. Here's what else they learned while working at Elon Musk's company.

Compiled by Jordan Erb. Tips/comments? Email jerb@insider.com or tweet @JordanParkerErb.

Sign up for more Insider newsletters here.

View post:

10 things in tech you need to know today, Thursday, Sept. 2 - Business Insider

Google is working on its own chips and intends to start inserting them in its Chromebook laptops from 2023, a move that could affect some of the leading chip manufacturers in the world.

US tech giant Google is currently working on its chips and intends to roll them out by 2023. This is according to an earlier report by Nikkei Asia, citing people familiar with the matter. According to the report, Google is developing its central processors for its tablet and notebook computers.

This latest development implies that Google considers in-house chip development as a crucial component for the company to remain competitive. The chips are key to the function of any device. They operate as the brains, ensuring that every aspect of a device runs as expected.

At the moment, Google utilizes chips manufactured by other tech giants like Intel and AMD to power its tablet and notebook computers. However, the Google chip currently in design is based on a design by British chip designer Arm.

Google considers the move to be crucial as other leading tech companies, including Amazon, Facebook, Microsoft, Tesla, Baidu and Alibaba Group Holding, are working towards developing their own semiconductors to use for their cloud services and electronic products.

The report added that Google is also working on building mobile processors for its Pixel smartphones. The tech giant was inspired by Apples success in developing its own semiconductor components for its iPhones. Apple is also looking to replace Intel chips with its own CPUs for cloud services and electronic products.

Google has been one of the best performing tech stocks in the market, seeing its price surge by more than 60% year-to-date. GOOGL started 2021 trading at $1,722 per share but has gained more than 60%.

GOOGL stock chart. Source: FXEMPIRE

GOOGL is currently trading at $2,923 per share, up by 1% over the past 24 hours. The companys performance has also been reflected in its earnings and revenue over the past few months.

Story continues

This article was originally posted on FX Empire

Go here to read the rest:

Google Intends To Insert Its Own Chips In Chromebook laptops By 2023 - Yahoo Finance

It would normally be awkward asking a group of companies worth more than $4 trillion for help. But the leaders of Apple Inc, Amazon.com Inc, Microsoft Corp and Alphabet Incs Google sat up and listened when US President Joe Biden sought their cooperation last week in protecting American infrastructure from cyber threats. They werent just being polite.

Three of the firms have faced lawsuits or probes from both the US Federal Trade Commission and Justice Department. They need to maintain cordial relations with the US government. Biden probably didnt bring that up during his discussions with Apples Tim Cook or Googles Sundar Pichai at the White House cyber security summit on 25 August, but it must have hung in the air like an unpleasant smell, detected by all but never remarked upon.

A new wave of antitrust probes over the past year could see regulators break up or fundamentally crimp the way Big Tech does business. That means big-tech companies must keep steady diplomatic ties with whoever is in the White House. At the summit, they pledged billions of dollars towards bolstering the security of their products in support of the governments initiative, and that is just the start.

A more challenging task will be finding new ways of working with the US to rein in the growth of ransomware attacks or intellectual property thefts. Remember Edward Snowdens revelations eight years ago? We learned back then that the National Security Agency had probed the data centres of Google and Yahoo! Inc to collect information on millions of US account holders. That disclosure, among others, put a wedge between Silicon Valley and Washington DC.

Tech companies became more privacy focused. Facebook rolled out end-to-end encryption across its messaging services, and Apple refused to build a back-door for law enforcement into iPhones. Tech giants portrayed themselves less as protectors of Americas national security needs, and more as global actors obligated to protect users across many different countries.

Now circumstances have changed. Americans are looking more than ever to their government for help on issues from health to security.

Last year was the one of the worst on record for cybersecurity, with more than 150 million people affected by data breaches, according to Statista. Ransomware attacks spiked. Russian hackers infiltrated thousands of US government and corporate targets by launching hacks from inside American servers. The so-called SolarWinds attack was one of the worst cyber espionage incidents in American history, and pointed to a major blind spot for the NSA.

Since Snowden, the agency hasnt been able to monitor domestic networks en masse, and its director, General Paul Nakasone, recently complained to US Congress that foreign hackers were exploiting the NSAs inability to see all of the dots."

Enter Silicon Valley. The August summit between the tech giants and the US government was like a reunion between high school sweethearts years after a horrible breakup. Theyre both older and wiser. One has a stunningly high salary. And now they need to make the relationship work. The phrase public-private partnership has been making the rounds. One chief executive who attended the meeting told The Wall Street Journal that discussions had focused more on partnerships" than regulations. Nakasone has also touted public-private-partnerships on cyber security.

What does that mean? In practice, it could mean a better targeted approach to surveillance. Apples move to analyse photographs on iPhones for potential child sex abuse images is one example. That decision caused outrage among privacy advocates, but it is notably different from the pre-Snowden vacuum-cleaner approach of sucking up masses of data. In this case, Apple can say that it isnt invading a users privacy unless its system flags them as a person of interest.

For his part, on the day after the 25 August summit, Snowden tweeted: How long do we have left before the iPhone in your pocket begins quietly filing reports about encountering extremist political material, or about your presence at a civil disturbance?"

Timing could be everything. Apple launched its controversial and unprecedented device-tracking tech in the middle of a crackdown in Chinaone of its biggest marketsagainst technology firms. For all its power and its trillion-dollar market cap, Apple is more beholden to governments at the moment. So are its big tech peers. Biden will find it easier than usual to ask for help with Americas national security blind spots.

Parmy Olson is a Bloomberg Opinion columnist covering technology

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

View original post here:

Bidens alliance with Big Tech signals a power shift in the US - Mint

Ahead of Apple's expected 2021 keynote event, rumors are circulating on features the company will eventually add to its Apple Watch.

One of the most popular theories is that the watch will include a new blood pressure monitor and a built-in thermometer, according to The Wall Street Journal.

The thermometer is intended to help with fertility planning, and could be available as soon as next year, according to the Journal.

Apple is expected to release its Apple Watch 7 in the coming weeks, but its more ambitious health-related features aren't expected before 2022, the Journal reported.

Health monitoring and tracking have always been popular features among wearers of the technology. Apple's Series 6 watch introduced customers to blood oxygen readings, measure an electrocardiogram, and detect hard falls. With the latest rumored updates, it is expected Apple will insert itself further into the wearable healthcare scene, following Samsung's Galaxy 4 Watch release which also includes blood pressure monitoring.

Apple Watches currently include features to help its wearers meet exercise goals, improve sleep, and monitor their overall well-being. In June, Apple announced its watchOS8 software, which added more health-related capabilities for its wearers including a mindfulness app and new Tai Chi and Pilates workout types.

In the oncoming years, Apple wants its wearable technology to detect sleep apnea and eventually spot diabetes, sources told The Journal.

The Apple Watch is usually announced alongside the iPhone during the company's September events, but reports by Nikkei Asia say it could be delayed because of difficulties in production due to the complexity of the design and the watch's new healthcare features. The report also mentions Apple's distributors are still recovering from supply chain issues due to disruptions from the COVID-19 pandemic.

Apple didn't respond to a request for comment.

Read more here:

The rumored Apple Watch features hint at the tech giant's bigger plans to make the wearable an indispensable, - Business Insider India

Bitcoin

Nurphoto / Getty Images

Dan McCarthy spent seven years as a recruiter convincing engineers to join Google. Now, as the talent partner at crypto-focused investment firm Paradigm, he's making a case for the engineers he once recruited to leave their ivory towers in Mountain View for cryptocurrency startups.

"I think the FAANG [Facebook, Apple, Amazon, Netflix, and Google] companies have kind of been the talent magnet that everyone is fighting against for a very long time," said McCarthy.

When at Google trying to recruit engineers for products like Gmail and Google Maps, McCarthy would tout a good compensation package, the ability to work on products that have high name recognition, and a relatively low-risk path to American citizenship. Now he's using similar points to argue for why engineers should leave those jobs for crypto.

Insider spoke exclusively with McCarthy about the four key reasons why he believes engineers should now quit their jobs at Facebook, Amazon, and other top tech companies for a cryptocurrency startup.

Replacing stock-based equity with token-based compensation. McCarthy's key point is that the existing equity compensation model is "dramatically unfavorable to people who join startups." He points to employees who have waited 10 years for their startups to see a successful exit, and in some cases, end up with nothing. On the other hand, "token-based compensation is capable of providing employees with a faster path to liquidity."

He also sees this as a general movement towards a trend that is already happening in Silicon Valley. "Over the past couple of months, Google and Stripe have moved to a model where their equity now vests monthly, like coming in the door, as opposed to having a one-year cliff," he said. "I think the bottom line is, especially as early engineers have more market power, solutions that are more favorable to them will start to become more common."

A return to the decentralized, open web. As a tech recruiter, McCarthy said he is a big believer in startups in general, but he is also a big believer in decentralization. He is wary of the amount of power that a handful of platform companies have in controlling what reaches the average consumer. He's also concerned about the "invasive tracking of user behavior to make money." McCarthy believes that most engineers also share this ideology, but up until now, have lacked viable job alternatives. "I think crypto is sort of unique as a wedge that can help provide people with incentives to move that they may not have had before," he tells Insider.

No more secrets. McCarthy points out that over the past decade, the most cutting-edge research has taken place in secretive labs within the FAANG companies. Think of X, Google's moonshot factory. Now, engineers who want to work on groundbreaking technologies with the potential for real-world impact have a better choice, he argues. Within crypto, research is built on open-source principles and public experimentation. "When I talk with our engineers internally [about a hire], they want to see people's GitHubs, they want to see people's code samples."

Being in the US is less critical. The FAANGs have historically enjoyed a built-in advantage with any candidate who needs visa sponsorship to work in the US, said McCarthy. But the rise of remote work during the pandemic has made physically being in the US less critical for career growth. Simply being in an "attractive time zone" and having access to a high-speed internet connection is enough so employees no longer need to be in Mountain View to contribute in a meaningful way, he said.

Still, he thinks the big tech giants might still have a major recruiting advantage among immigrants who seek the American dream. "As long as the visa process is a bureaucratic nightmare - the FAANGs will have a major recruiting advantage among immigrants," he said.

Read the original here:

A former Google recruiter offers 4 reasons why engineers should quit their jobs at tech giants like Facebook, Apple and Amazon for crypto startups -...