Integrated media company, NZME Ltd (ASX: NZM) is making headlines today following a potential partnership with internet giant, Google.
At the time of writing, the NZME share price is rocketing 15.5% to $1.565 in early morning trade. This means that the company’s shares are up more than 25% in the past month alone.
What did NZME announce?
In its statement, NZME advised that it has signed a letter of intent with Google for the supply of news content to News Showcase. The latter is Google’s online news platform that allows participating publishers to share their expertise and thoughts.
Both parties will now enter a 90-day negotiation period to finalise the key terms set out in the proposal.
It is expected that the final contractual agreement will be based on a minimum term of five years.
NZME also noted that it is currently in commercial discussions with Meta, the parent company which owns Facebook and Instagram. The nature of the potential agreement is in regards to receiving support for a number of digital transformation projects over the next year.
If the Google deal materialises along with other anticipated commercial arrangements, NZME is forecasting an improved EBITDA for FY22. This would be in the range of $67 million to $72 million, given the current trading performance in hand.
NZME chief executive, Michael Boggs touched on the announcement, saying:
We are pleased to have reached a point with Google where we can partner with them to further enable digital growth across NZME’s business, boosting digital revenue for NZME and increasing our audience reach.
We look forward to reaching final agreement with Google that will see NZME’s news content supplied and shared through Google programmes, continuing to support the future of high quality, trusted journalism in Aotearoa.
About the NZME share price
After gaining 15% today, the NZME share price has more than doubled in value over the past 12 months.
Although, when looking at year to date, the company’s shares are up around 16%.
NZME has a price-to-earnings (P/E) ratio of 9.45 and commands a market capitalisation of roughly $308.21 million.
The post Little-known ASX share pops 15% following Google deal appeared first on The Motley Fool Australia.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares) and Meta Platforms, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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