Up 38% in a year, Life360 shares sliding today on $120 million US acquisition news

Life360 Inc (ASX: 360) shares are slipping today.

Shares in the S&P/ASX 200 Index (ASX: XJO) location sharing software developer closed yesterday trading for $31.97. In late morning trade on Tuesday, shares are swapping hands for $31.31 apiece, down 2.1%.

For some context, the ASX 200 is up 0.1% at this same time.

Here’s what’s happening.

Life360 shares slip on completed acquisition

Before market open this morning, Life360 announced that it has completed the acquisition of United States-based advertising technology company Nativo for around $120 million. This sum is comprised of 65% in cash and 35% in Life360 shares.

The company said the acquisition will help brands reach families with more relevant messages in more relevant places. And not just inside the Life360 app, but also across connected TV, mobile, and premium digital environments.

Life360 now has more than 50 million monthly active users (MAU) in the US. The company highlighted that this is in line with some of the US most popular media platforms, including Netflix Inc (NASDAQ: NFLX), Spotify Technology (NYSE: SPOT), and Pinterest Inc (NYSE: PINS).

Life360 shares could garner longer-term support as the company continues to expand its operations beyond its primary family connection and safety business and taps into more advertising revenue.

The ASX 200 tech stock noted that the acquisition of Nativo extends its insights into how families move, offering advertisers a single system for targeting creative messages.

What did management say?

Commenting on the completed acquisition that has yet to boost Life360 shares today, CEO Lauren Antonoff said, “Surpassing 50 million monthly active users in the US is a significant milestone that speaks to the trust families place in Life360.”

Antonoff added:

Families make countless decisions every day as they move through the world, and this partnership helps brands show up in those moments with relevance and respect. Together with Nativo, we’re building a differentiated advertising platform that connects brands to real families, in real moments, with real results.

Justin Choi, founder and CEO of Nativo, said that combining Life360’s “incredibly rich and accurate first-party insights” with Nativo’s platform “activates them in a way that rivals the advertising superpowers of the leading social media networks, while cultivating transparent, brand-safe, and meaningful connections to families”.

Choi concluded, “Nativo’s ad technology is purpose-built to unlock this opportunity in a way that enhances the user experience for Life360’s members.”

At the current Life360 share price, the company commands a market cap of AU$7.3 billion, well below that of the major US social media networks.

The post Up 38% in a year, Life360 shares sliding today on $120 million US acquisition news appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Netflix, Pinterest, and Spotify Technology. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool Australia has recommended Netflix and Pinterest. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.