Tag: online services

IBM stock rallies on third-quarter results, upbeat forecast

Shares of International Business Machines Corp. rallied in extended trading Wednesday, after the tech software, consulting and infrastructure giant reported third-quarter results that beat expectations and offered up a more upbeat full-year sales forecast.

IBM
IBM,
-0.35%
reported earnings as Wall Street tries to gauge the impact of a tough foreign-exchange environment, and the state of business spending on tech services amid worries over a downturn. But the company saw gains in hybrid cloud services, products like open-source software platform Red Hat, its consulting services and its zSystems servers and software.

“Globally, clients view technology as an opportunity to enhance their business, which is evident in the results across our portfolio,” Chief Executive Arvind Krishna said in a statement. He added that he now expects full-year sales growth “above our mid-single-digit model.”

That’s a bit more optimistic than the forecast he gave over the summer, when IBM reported second-quarter results. Krishna, at that time, said he continued “to expect full-year revenue growth at the high end of our mid-single-digit model.”

Wall Street expects IBM’s full-year sales to come in at $59.667 billion, according to FactSet. Analysts expect 2022 earnings per share of $9.28. IBM also said it continued to expect around $10 billion in consolidated free cash flow for the year.

For the third quarter, the company reported a net loss of $3.2 billion, or $3.54 per share, compared with a $1.1 billion profit, or $1.25 per share, in the year-earlier period. On an adjusted basis, IBM earned $1.81 per share.

Sales came in at $14.1 billion, compared with $13.3 billion a year ago.

Analysts polled by FactSet expected adjusted earnings per share of $1.79, on revenue of $13.517 billion.

Revenue in the company’s software segment grew 7.5%. Consulting revenue rose 5.4%, while the company’s infrastructure segment jumped 14.8%.

Shares gained 4.8% after hours on Wednesday.

Prior to the results, analysts had zeroed in on the impact of the strong dollar and what Morgan Stanley, in a recent note, described as “continued wage pressure in consulting.” IBM has also been trying to lean more into cloud and AI technology, unloading some businesses in an effort to narrow its focus.

Last year, in a move toward that goal, IBM spun off its infrastructure services business into Kyndryl Holdings
KD,
-2.85%.
But afterward, some analysts raised questions about IBM’s ability to grow sales and compete in the cloud-services industry. Francisco Partners, an investment firm, this year also acquired health-care data and analytics assets that were part of IBM’s Watson Health segment.

In January, IBM declined to provide an earnings-per-share forecast. The company also changed how it organizes its business segments at the beginning of this year.

But during the spring, Krishna said he saw “demand staying strong” even if economic growth flattens or enters into a brief recession, with the decision to halt business in Russia, following its invasion of Ukraine, the only drag on results.

IBM stock is down 8% year to date. By comparison, the S&P 500 Index
SPX,
-0.67%
is down 22%.

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October 19, 2022
Netflix snaps streak of subscriber declines and beats on earnings, stock jumps 15%

Netflix Inc. added more than 2 million subscribers in the third quarter after stumbling into 2022 with two consecutive quarterly declines, a rebound that sent shares more than 15% higher in after-hours trading Tuesday.

Netflix
NFLX,
-1.73%
reported a net gain of 2.41 million subscribers in the third quarter, while analysts on average were forecasting 1.1 million net additions, according to FactSet. That follows a decline of roughly 200,000 subscribers in the first quarter and nearly a million in the second quarter, which has led the company to plan massive changes, including a cheaper, ad-supported streaming tier set to arrive in the fourth quarter.

In a letter to shareholders, Netflix executives said they expect 4.5 million new subscribers to join in the fourth quarter, with revenue forecast to grow to $7.78 billion from $7.71 billion a year ago. Analysts on average were estimating revenue of $7.97 billion and a net subscriber gain of 4 million for the fourth quarter, according to FactSet.

“After a challenging first half, we believe we’re on a path to reaccelerate growth,” executives wrote in the letter.

The news sent Netflix shares up about 15% in after-hours trading following the release of the results, after closing with a 1.7% drop at $240.86. The stretch of subscriber declines has filleted Netflix shares, which have swooned 60% so far this year while the broader S&P 500 index
SPX,
+1.14%
has declined 22.8%.

The streaming-video giant’s downturn after a pandemic-boosted surge has only intensified pressure from rival streaming services at Walt Disney Co.
DIS,
+1.18%,
Apple Inc.
AAPL,
+0.94%,
Amazon.com Inc.
AMZN,
+2.26%,
Warner Bros. Discovery Inc.
WBD,
+4.55%,
Comcast Corp.
CMCSA,
-0.23%
and Paramount Global
PARA,
+1.56%.

That didn’t stop Netflix executives from taking a pot shot at streaming rivals over profitability. “Our competitors are investing heavily to drive subscribers and engagement, but building a large, successful streaming business is hard — we estimate they are all losing money, with combined 2022 operating losses well over $10 billion, vs. Netflix’s $5 to $6 billion annual operating profit,” Netflix executives said in the shareholder letter.

A dramatic shift in the video-streaming climate, one in which Disney surpassed Netflix as market leader in July, has prompted a radical makeover at Netflix. Last week, the company announced its long-awaited advertising-supported tier, which debuts Nov. 3 in the U.S. for $6.99 a month. Another 11 countries, including Canada and Mexico, will get the service by Nov. 10. The company has also vowed a crackdown on shared accounts, and is pushing forward on gaming.

The advertising-supported tier directly acknowledges competition and the necessity of Netflix “adapting to the streaming landscape’s new normal,” Insider Intelligence analyst Ross Benes said in a note late Tuesday.

For more: Netflix lost its streaming crown to Disney. Here’s how execs expect to win it back.

Netflix announced third-quarter earnings of $1.4 billion, or $3.10 a share, down from $3.16 a share a year ago. Netflix revenue improved to $7.93 billion in the quarter from $7.48 billion in the same period a year ago, but missed diminished expectations. Analysts polled by FactSet expected earnings of $2.14 a share on sales of $7.84 billion, estimates that had dipped in recent days.

Tuesday’s results follow some serious self-reflection among Netflix executives on how to stanch a decline in visits among subscribers that has led to cancellations. Co-CEO Reed Hastings has consulted with staff to find ways to make subscribers visit the platform more frequently, according to reports by The Wall Street Journal and Bloomberg News.

One such strategy is cracking down on multiple users sharing the same account. In the shareholder letter, Netflix said it has “landed on a thoughtful approach to monetize account sharing and we’ll begin rolling this out more broadly starting in early 2023.”

“After listening to consumer feedback, we are going to offer the ability for borrowers to transfer their Netflix profile into their own account, and for sharers to manage their devices more easily and to create sub-accounts (‘extra member’), if they want to pay for family or friends,” the letter said. “In countries with our lower-priced ad-supported plan, we expect the profile transfer option for borrowers to be especially popular.”

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October 18, 2022

These 11 stocks can lead your portfolio’s rebound after the S&P 500 ‘earnings recession’ and a market bottom next year

This may surprise you: Wall Street analysts expect earnings for the S&P 500 to increase 8% during 2023, despite all the buzz about a possible recession as the Federal Reserve tightens monetary policy to quell inflation.

Ken Laudan, a portfolio manager at Kornitzer Capital Management in Mission, Kan., isn’t buying it. He expects an “earnings recession” for the S&P 500
SPX,
+2.78%
— that is, a decline in profits of around 10%. But he also expects that decline to set up a bottom for the stock market.

Laudan’s predictions for the S&P 500 ‘earnings recession’ and bottom

Laudan, who manages the $83 million Buffalo Large Cap Fund
BUFEX,
-2.86%
and co-manages the $905 million Buffalo Discovery Fund
BUFTX,
-2.82%,
said during an interview: “It is not unusual to see a 20% hit [to earnings] in a modest recession. Margins have peaked.”

The consensus among analysts polled by FactSet is for weighted aggregate earnings for the S&P 500 to total $238.23 a share in 2023, which would be an 8% increase from the current 2022 EPS estimate of $220.63.

Laudan said his base case for 2023 is for earnings of about $195 to $200 a share and for that decline in earnings (about 9% to 12% from the current consensus estimate for 2022) to be “coupled with an economic recession of some sort.”

He expects the Wall Street estimates to come down, and said that “once Street estimates get to $205 or $210, I think stocks will take off.”

He went further, saying “things get really interesting at 3200 or 3300 on the S&P.” The S&P 500 closed at 3583.07 on Oct. 14, a decline of 24.8% for 2022, excluding dividends.

Laudan said the Buffalo Large Cap Fund was about 7% in cash, as he was keeping some powder dry for stock purchases at lower prices, adding that he has been “fairly defensive” since October 2021 and was continuing to focus on “steady dividend-paying companies with strong balance sheets.”

Leaders for the stock market’s recovery

After the market hits bottom, Laudan expects a recovery for stocks to begin next year, as “valuations will discount and respond more quickly than the earnings will.”

He expects “long-duration technology growth stocks” to lead the rally, because “they got hit first.” When asked if Nvidia Corp.
NVDA,
+6.14%
and Advanced Micro Devices Inc.
AMD,
+3.69%
were good examples, in light of the broad decline for semiconductor stocks and because both are held by the Buffalo Large Cap Fund, Laudan said: “They led us down and they will bounce first.”

Laudan said his “largest tech holding” is ASML Holding N.V.
ASML,
+3.79%,
which provides equipment and systems used to fabricate computer chips.

Among the largest tech-oriented companies, the Buffalo Large Cap fund also holds shares of Apple Inc.
AAPL,
+3.09%,
Microsoft Corp.
MSFT,
+3.88%,
Amazon.com Inc.
AMZN,
+6.63%
and Alphabet Inc.
GOOG,
+3.91%

GOOGL,
+3.73%.

Laudan also said he had been “overweight’ in UnitedHealth Group Inc.
UNH,
+1.77%,
Danaher Corp.
DHR,
+2.64%
and Linde PLC
LIN,
+2.25%
recently and had taken advantage of the decline in Adobe Inc.’s
ADBE,
+2.32%
price following the announcement of its $20 billion acquisition of Figma, by scooping up more shares.

Summarizing the declines

To illustrate what a brutal year it has been for semiconductor stocks, the iShares Semiconductor ETF
SOXX,
+2.12%,
which tracks the PHLX Semiconductor Index
SOX,
+2.29%
of 30 U.S.-listed chip makers and related equipment manufacturers, has dropped 44% this year. Then again, SOXX had risen 38% over the past three years and 81% for five years, underlining the importance of long-term thinking for stock investors, even during this terrible bear market for this particular tech space.

Here’s a summary of changes in stock prices (again, excluding dividends) and forward price-to-forward-earnings valuations during 2022 through Oct. 14 for every stock mentioned in this article. The stocks are sorted alphabetically:

Company	Ticker	2022 price change	Forward P/E	Forward P/E as of Dec. 31, 2021
Apple Inc.	AAPL, +3.09%	-22%	22.2	30.2
Adobe Inc.	ADBE, +2.32%	-49%	19.4	40.5
Amazon.com Inc.	AMZN, +6.63%	-36%	62.1	64.9
Advanced Micro Devices Inc.	AMD, +3.69%	-61%	14.7	43.1
ASML Holding N.V. ADR	ASML, +3.79%	-52%	22.7	41.2
Danaher Corp.	DHR, +2.64%	-23%	24.3	32.1
Alphabet Inc. Class C	GOOG, +3.91%	-33%	17.5	25.3
Linde PLC	LIN, +2.25%	-21%	22.2	29.6
Microsoft Corp.	MSFT, +3.88%	-32%	22.5	34.0
Nvidia Corp.	NVDA, +6.14%	-62%	28.9	58.0
UnitedHealth Group Inc.	UNH, +1.77%	2%	21.5	23.2
Source: FactSet

You can click on the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information available free on the MarketWatch quote page.

The forward P/E ratio for the S&P 500 declined to 16.9 as of the close on Oct. 14 from 24.5 at the end of 2021, while the forward P/E for SOXX declined to 13.2 from 27.1.

Don’t miss: This is how high interest rates might rise, and what could scare the Federal Reserve into a policy pivot

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October 17, 2022

Trump social-media SPAC jumps on report Google allows Truth Social

Shares of Digital World Acquisition Corp.,
DWAC,
-1.12%
the special-purpose acquisition company planning to take former President Donald Trump’s media-ventures company public, jumped 10% after Axios reported that Truth Social, Trump’s social media platform, received approval from Google for distribution on its Google Play Store. Axios noted that nearly half of smartphone users in the U.S. use Google’s Android platform, and said Truth Social “had to commit to enforcing its own website policies that forbid things like inciting violence.” The approval follows a launch of a platform that has run into technical glitches, legal issues and challenges related financial matters and user engagement.

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October 12, 2022
Infowars host Alex Jones ordered by Connecticut jury to pay $965 million over Sandy Hook ‘hoax’ claims

WATERBURY, Conn. (AP) — The conspiracy theorist Alex Jones should pay $965 million to people who suffered from his false claim that the Sandy Hook Elementary School shooting was a hoax, a jury in Connecticut decided Wednesday.

The verdict is the second big judgment against the Infowars host over his relentless promotion of the lie that the 2012 massacre never happened, and that the grieving families seen in news coverage were actors hired as part of a plot to take away people’s guns.

It came in a lawsuit filed by the relatives of five children and three educators killed in the mass shooting, plus an FBI agent who was among the first responders to the scene. A Texas jury in August awarded nearly $50 million to the parents of another slain child.

“ Experts testified that Jones’s audience swelled when he made Sandy Hook a topic on the show, as did his revenue from product sales. ”

The Connecticut trial featured tearful testimony from parents and siblings of the victims, who told about how they were threatened and harassed for years by people who believed the lies told on Jones’s show.

Strangers showed up at their homes to record them. People hurled abusive comments on social media. Erica Lafferty, the daughter of slain Sandy Hook principal Dawn Hochsprung, testified that people mailed rape threats to her house.

Mark Barden told of how conspiracy theorists had urinated on the grave of his 7-year-old son, Daniel, and threatened to dig up the coffin.

Superior Court Judge Barbara Bellis discusses a question from the jury with attorneys on Tuesday.

H. John Voorhees III/Hearst Connecticut Media/AP

Testifying during the trial, Jones acknowledged he had been wrong about Sandy Hook. The shooting was real, he said. But both in the courtroom and on his show, he was defiant.

He called the proceedings a “kangaroo court,” mocked the judge, called the plaintiffs’ lawyer an ambulance chaser and labeled the case an affront to free speech rights. He claimed it was a conspiracy by Democrats and the media to silence him and put him out of business. “I’ve already said ‘I’m sorry’ hundreds of times, and I’m done saying I’m sorry,” he said during his testimony.

Twenty children and six adults died in the shooting on Dec. 14, 2012. The defamation trial was held at a courthouse in Waterbury, about 20 miles from Newtown, where the attack took place.

The lawsuit accused Jones and Infowars’ private parent company, Free Speech Systems, of using the mass killing to build his audience and make millions of dollars.

Experts testified that Jones’s audience swelled when he made Sandy Hook a topic on the show, as did his revenue from product sales.

Don’t miss: Alex Jones’s audience and Infowars’ revenue grew as Jones alleged Sandy Hook school massacre was a hoax

Also: Alex Jones has created a ‘living hell’ of harassment and death threats, testify Sandy Hook school parents

In both the Texas lawsuit and the one in Connecticut, judges found the company liable for damages by default after Jones failed to cooperate with court rules on sharing evidence, including failing to turn over records that might have showed whether Infowars had profited from knowingly spreading misinformation about mass killings.

See: Texas jury orders Alex Jones to pay more than $49 million in damages in Sandy Hook case

Because he was already found liable, Jones was barred from mentioning free-speech rights and other topics during his testimony.

Jones now faces a third trial, in Texas around the end of the year, in a lawsuit filed by the parents of another child killed in the shooting.

It is unclear how much of the verdicts Jones can afford to pay.

During the trial in Texas, he testified he couldn’t afford any judgment over $2 million. Free Speech Systems has filed for bankruptcy protection. But an economist testified in the Texas proceeding that Jones and his company were worth as much as $270 million.

Read on: Alex Jones’s Infowars picks new CRO for bankruptcy

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October 12, 2022
Judge delays Twitter v. Elon Musk trial to allow deal to close

The judge in a legal battle between Twitter Inc.
TWTR,
-3.72%
and Tesla Inc.
TSLA,
-1.11%
Chief Executive Elon Musk on Thursday delayed their trial, previously set for Oct. 17, to give the sides time to close the $44 billion acquisition at the heart of the beef. Trial was set to begin Oct. 17 in Delaware Chancery Court, but Chancellor Kathaleen McCormick ruled Thursday afternoon that the two sides would have until Oct. 28 to close the transaction. If Musk has not closed on his deal to buy Twitter by then, a trial date will be set for November, the judge ruled.

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October 6, 2022
Elon Musk would lose 13.5 million Twitter followers if he scraps most spam accounts; Justin Bieber would lose 27.6 million, data finds

Elon Musk would lose about 13.5 million Twitter followers, if he pushes through his plan to get rid of most spam accounts, according to data crunched by CodeClan, a Scottish digital skills academy.

The Tesla Inc.
TSLA,
-3.84%
CEO on Tuesday gave up a legal battle and agreed to pay $44 billion to take over the social-media company. Musk has said he wants less than 5% of Twitter
TWTR,
-2.35%
accounts to be spam.

But Musk’s losses pale in comparison with singer Justin Bieber, who would lose 27.6 million of his 114.2 million followers, according to the data.

Britney Spears would lose the highest percentage of fake followers out of the top 20 with some 48% of her 55.8 million followers being classified as fakes.

See also: Elon Musk says Twitter will eventually be part of ‘X, the everything app’

Former President Barack Obama would lose 19.3 million of his 131.9 million followers, the data shows.

Among other high profile names; Katy Perry has about 23.3 million fakes among her 108.9 million followers, or 21.4% of the total; Rihanna has about 26.5 million fakes, or 24.9% of her 106.5 million followers; Lady Gaga has 10.9 million fakes in her roster of 84.7 million followers, for 12.9% of the total; Kim Kardashian has about 14 million fakes, or 19.4% of her 72.4 million followers, and Ellen DeGeneres has about 24.4 million fakes, equal to 31.5% of her 77.5 million followers.

See now: Elon Musk’s legal battle with Twitter may be over, but his war with the SEC continues

In the world of politics, Indian Prime Minister Narendra Modi has about 17.5 million fakes in his 78.8 million followers, equal to 22.2% of the total.

CNN Breaking News has about 7.7 million fakes, or 12.2% of its 63.1 million followers. Bill Gates has about 14.3 million fakes, or 24.2% of his 58.9 million followers. And NASA has some 14.7 million fakes, or 26.8% of its 57.1 million followers.

Twitter shares were slightly lower premarket, while Tesla was down 1.1%.

Shares of Digital World Acquisition Corp.
DWAC,
+0.03%,
the special-purpose acquisition company, or SPAC, buying the company behind former President Donald Trump’s Truth Social social-media company, was slightly higher premarket after falling more than 5% Tuesday in the wake of the Musk/Twitter news.

The SPAC has fallen 67% in the year to date, while the S&P 500
SPX,
-1.28%
has fallen 20%.

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October 5, 2022
Twitter stock surges 22% after Elon Musk gives up bot battle and commits to $44 billion deal

Tesla Inc. Chief Executive Elon Musk now plans to close his proposed $44 billion deal for Twitter Inc., according to a Tuesday filing that arrived less than two weeks before a judge was scheduled to hear a case on the disputed acquisition.

Musk’s lawyers sent a letter to Twitter’s management team indicating that he was proposing to move forward with the original acquisition terms late Monday, and that letter was released as a filing with the Securities and Exchange Commission Tuesday afternoon. A Twitter spokesperson later confirmed to MarketWatch that the company intended to proceed with the deal for $54.20 a share.

Twitter
TWTR,
+22.24%
shares jumped 22.2% to $52 in Tuesday’s session, after an hours-long trading halt that started after Bloomberg News first reported the move around noon Eastern time, suggesting a possible end to the legal saga between the two parties. The increase is the second best daily percentage gain on record for Twitter stock, behind only the 27.1% gain experienced when Musk disclosed his initial ownership stake in Twitter in April. Twitter was the best performing stock Tuesday in the S&P 500 index
SPX,
+3.06%,
and is now up 20.3% on the year.

The two sides have been locked in a legal battle for months, and a Delaware Chancery Court judge was expected to hear from both sides in a five-day trial slated to begin Oct. 17. The Wall Street Journal reported Tuesday that the Delaware judge asked the two sides to come up with a plan by the end of the day that could bring about an end to the litigation.

“Musk could see the writing on the wall that he was going to lose the trial,” said Josh White, an assistant finance professor at Vanderbilt University, in an email to MarketWatch. “By doing this, he can save legal costs, time and ultimately losing in a very public trial.”

See also: Here’s how Twitter’s users reacted to Musk agreeing to buy the platform

Musk agreed in April to buy Twitter in a deal that valued the company at roughly $44 billion, but he later said that he was terminating the deal. The Tesla
TSLA,
+2.90%
CEO cited concerns about bot activity on Twitter and said he believed the company’s management team wasn’t accurate in its public disclosures about the extent of spam activity on the platform.

White noted that text messages released in conjunction with the case showed that Musk was aware of Twitter’s bot issue before going forward with his original deal offer, and he doubted that Musk would be able to show that “something really changed” after that point.

“If he offered less than $54.20, Twitter might have proceeded with the trial, and he would be deposed,” White continued. “By offering the original price, he maximizes the chance that Twitter accepts and the trial ends. I expect Twitter’s board to accept the deal and for it to close rather quickly.”

Wedbush analyst Daniel Ives agreed that the Tesla leader’s latest move marked a “clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another,” he wrote in a note to clients. “Being forced to do the deal after a long and ugly court battle in Delaware was not an ideal scenario and instead accepting this path and moving forward with the deal will save a massive legal headache.”

Opinion: Twitter stood up to Elon Musk and won, but will it feel like a win once he owns it?

Vanderbilt’s White noted that a deal at the original price would be a “big” win for Twitter shareholders.

“The stock price of Snap
SNAP,
+8.42%
and Twitter seemed to trade around the same price level before the offer,” he told MarketWatch. “Snap is now a ~$10 stock with a $17 billion market cap. So Twitter’s shareholders win by getting $54.20 rather than having the price drop to $10-20 per share.”

Additionally, he deemed Delaware business law another winner: “This deal shows that even the richest man in the world cannot overcome well-written contracts enforced in a neutral and fair way by the Delaware courts.”

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October 4, 2022
Poshmark to be bought by South Korean internet company Naver in $1.2 billion deal

Online secondhand-fashion marketplace Poshmark Inc. has agreed to be bought by South Korean internet company Naver in a $1.2 billion deal, the companies announced Monday, a move that executives said would help both brands expand internationally.

Shares of Poshmark
POSH,
-0.64%
jumped 11.8% in after-hours trading on the news.

Under the terms of the deal, Naver
035420,
-8.79%
will acquire Poshmark’s outstanding shares for $17.90 in cash, representing a 15% upside to Poshmark’s Monday closing price of $15.57. The transaction is set to close by the first quarter of next year, pending Poshmark shareholders’ approval.

Poshmark went public in late 2020, pricing shares at $42 a share, and ended its first day of trading at more than $100 a share, but has never approached those heights again. It last traded for more than the acquisition price Naver has agreed to pay late last year.

For more: Five things to know about Poshmark

In a statement, executives from both companies talked up the potential to combine Naver’s array of search, e-commerce, AI and social-media technology with Poshmark’s social and shopping platforms. Poshmark, the companies said, would also embark on a bigger international expansion strategy, including into other markets in Asia, in the “medium-term.”

They also talked about the potential for the combined company to save around $30 million annually within two years after the deal’s closing through “rationalization of public company costs” and higher operating leverage, along with the potential for more than 20% yearly sales growth by harnessing Naver’s advertising resources.

Naver, which runs large search and e-commerce platforms, said the move would broaden its e-commerce platform, bring younger users into the company’s fold and allow it to “capitalize on the global online fashion re-commerce and sustainable economy opportunity.”

“Naver’s leading technology in search, AI recommendation and e-commerce tools will help power the next phase of Poshmark’s global growth,” Choi Soo-Yeon, Naver’s chief executive, said in a statement, which also said that Naver hosted a large number of digital content creators in Korea.

Naver owns companies like Wattpad, a social-media platform, and runs Webtoon, a site for digital comics, along with a metaverse platform called Zepeto, and also has joint ownership of an internet service group in Japan. Naver said its online community in Korea consists of more than 36 million monthly users, who use its search engine and other services.

Poshmark Chief Executive Manish Chandra said the deal would also give Poshmark opportunities to grow.

“Longer term, as part of Naver, we will benefit from their financial resources, significant technology capabilities, and leading presence across Asia to expand our platform, elevate our product and user experiences, and enter new and large markets,” he said in the statement.

Naver said the acquisition would also help give it a bigger foothold in the U.S. And it said the deal would allow it to broaden the appeal of so-called live-stream shopping.

“Live-stream shopping is a key driver of e-commerce in China and Korea (and increasingly in the U.S.) today, allowing shoppers to buy products in real-time through live video broadcasts, enabling greater insights and more clarity around purchasing decisions,” the statement said.

Once the deal closes, Poshmark will be a standalone subsidiary of Naver, with the same management team, brand and headquarters in Redwood City, Calif., the companies revealed.

At the close of Monday’s trading, shares of Poshmark were down around 9% year-to-date. The S&P 500 index
SPX,
+2.59%,
by comparison, has slid 23% over that time.

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October 3, 2022