The AMP Ltd (ASX: AMP) share price has continued to decline over the past month. This comes despite the financial services company not releasing any new market sensitive news since its half-year results last month.

At the time of writing, AMP shares are edging 0.19% to $1.037. It’s worth noting that the company’s share price is nearing its all-time low of $1.04 reached on 30 July.

What is going on with AMP shares?

It has been a challenging period for AMP shareholders, with no indication of when the heavy selling will stop.

The company’s financial scorecard produced a largely positive performance.

Net Profit After Tax (NPAT) grew to $181 million, up 57% on the prior corresponding period. This was mainly driven by an increase in Australian wealth management assets under management (AUM) of $121 billion, up 8%.

In addition, Australian wealth management net cash outflows came to $2.7 billion. A massive improvement compared to the $4 billion in net cash outflows recorded in first-half of FY20.

Controllable costs excluding AMP Capital, stood at $387 million, down 6% caused by lower disciplined cost management.

Nonetheless, the AMP share price has been trading at record lows since ASIC commenced proceedings against the company in May.

According to financial regulator, AMP wilfully deducted life insurance premium and advise service fees from superannuation accounts of deceased customers.

The company stated that action has since been taken to correct the error. It has been conducting a thorough review of its policies and processes. The matter was later covered in the financial services royal commission.

So, what’s the outlook for the FY21 full year for AMP?

Looking ahead, the group is projecting controllable costs of $775 million, which is in line with the prior guidance.

AMP is expecting the Global Equities and Fixed Income (GEFI) and Multi-Asset Group (MAG) to internally separate in FY21. The demerger program is scheduled for completion by the middle of FY22. This will see the transition of MAG from AMP Capital to AMP Australia, creating a superannuation and investment platform business.

Loan growth momentum for AMP Bank is expected to continue to run into the second half while AMP Capital earnings are forecasted to decline. The group stated that this is due to lower performance and investment returns.

AMP share price snapshot

The last 12 months have been yet another disappointing result for AMP shares, falling by more than 30%. When looking at the last 5 years, these losses are magnified even greater, dropping around 80% in value.

Based on today’s price, AMP presides a market capitalisation of roughly $3.38 billion and has 3.2 billion shares on issue.

The post The AMP (ASX:AMP) share price has fallen another 7% in a month. What’s next? appeared first on The Motley Fool Australia.

More reading

• Here’s why the AMP (ASX:AMP) share price is down 4% in a week
• How have ASX financial shares performed during the August 2021 earnings season?
• What does the future look like for the AMP (ASX:AMP) share price?
• When was the best day ever on the AMP share price chart?
• The AMP (ASX:AMP) share price is down 28% so far in 2021. Here’s why

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. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3EgPpcv

The tech business Siteminder may be getting closer to an initial public offering (IPO). Investors can already indirectly access exposure to Siteminder through tech investor Bailador Technology Investments Ltd (ASX: BTI).

What is Siteminder?

Siteminder is a hotel booking business. It is one of the world leaders in connecting hotels to online distribution channels for bookings. The company says that there are 35,000 hoteliers globally that are already using Siteminder.

It offers a number of services such as channel manager (including revenue insights), a hotel booking engine (including rate parity insights), competitive and market insights and hotel website design.

Bailador says that Siteminder generates more than $100 million of annualised recurring revenue through a subscription revenue model with a gross margin of more than 70%. It is reportedly triple the size of the nearest competitor and has an addressable market of 1 million hotels.

That revenue comes from more than 160 countries, with 80% of revenue from international markets. It has a skew towards the leisure market, which was described as more robust.

Bailador says that Siteminder exhibits resilient characteristics of a software as a service (SaaS) revenue model and is valued as a premium SaaS business.

How has COVID-19 affected the business?

COVID-19 has been tough on ASX travel shares that have been impacted by restrictions and limited demand over the last year and a half. Businesses like Webjet Limited (ASX: WEB), Flight Centre Travel Group Ltd (ASX: FLT), Sydney Airport Holdings Pty Ltd (ASX: SYD) and Corporate Travel Management Ltd (ASX: CTD) continue to be impacted.

However, Bailador says that performance has been managed prudently during COVID-19. Despite significant difficulties for the travel industry, Siteminder has experienced flat revenue over the 12 months to 30 June 2021.

Bailador believes that the hotel booking business is positioned for “rapid growth” as travel volumes increase.

Is Siteminder about to IPO?

Siteminder is one of Bailador’s largest holdings. At the time of the ASX tech investor’s FY21 result, it said that IPO preparation was underway, including ensuring appropriate governance for a public company.

According to reporting by the Australian Financial Review, Siteminder has just finished a funding round of at least $100 million. It is not rushing to IPO, but it is expected that an IPO will occur in FY22. Many of the investors in that funding round were investors that Siteminder already had an association with.

The AFR said that the Siteminder CEO Sankar Narayan noted the business has continued to invest in its technology and offering. Mr Narayan also said that Siteminder is aiming for further global expansion, to add on to its recent European expansion, particularly in German-speaking countries.

However, referring to the timing of a potential IPO and whether it related to the return of travel, Mr Narayan was tight-lipped. He said:

For a lot of reasons I can’t talk about that, I can’t actually talk about an IPO or any IPO plans.

The post Is hotel booking tech company Siteminder close to an IPO? appeared first on The Motley Fool Australia.

More reading

• Own Wesfarmers (ASX:WES) shares? It’s about to be payday…for you and the CEO
• These three ASX retail shares delivered double (and triple!) digit returns in 2021
• Here’s why the Vulcan (ASX:VUL) share price is frozen
• Zip (ASX:Z1P) share price lower despite savings and crypto products update
• The Incannex (ASX:IHL) share price is up 40% in a month. Here’s why

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bailador Technology Investments Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Bailador Technology Investments Limited and Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3zdHCIp

Investors in Wesfarmers Ltd (ASX: WES) shares would be licking their lips right now. The Aussie retail conglomerate is set to return a significant chunk of capital to shareholders after posting a $2,421 million full-year net profit after tax.

Wesfarmers bumped its full-year dividend up 17.1% to 178 cents per share in August and announced a $2.3 billion capital return to shareholders.

However, investors aren’t the only ones set for a handy boost to the hip pocket. CEO Rob Scott is in line for a bumper pay day if approvals are granted at the company’s annual general meeting (AGM).

Why investors in Wesfarmers shares are set for a big payday

According to an article in The Australian, shareholders will vote on a $7.37 million performance bonus package for Scott.

That comes after a year in which Wesfarmers and its key brands weathered the COVID-19 pandemic. In fact, the Aussie conglomerate posted a 10% increase in revenue to $33,941 million.

Bunnings, Kmart Group and Officeworks all contributed to earnings growth despite on-again, off-again restrictions across the country.

Now investors will be asked to approve the performance reward package for the company CEO. It’s been a solid year for Wesfarmers shares which have gained 27.4% in the past 12 months, not including dividends.

Scott is in line for two tranches of performance shares worth $7.37 million. The board is reportedly proposing $3.684 million in deferred performance stock and $3.684 million in performance shares.

The article notes that the performance shares agenda item last year passed with a 97.15 vote in favour from shareholders.

They’ll be waiting for their own reward for holding Wesfarmers shares after a promised $2 per share capital return.

Foolish takeaway

There’s something of a cash splash looming for Wesfarmers. CEO Rob Scott is in the box seat for $7.37 million of performance shares while investors await their own returns.

Wesfarmers shares are worth watching on the ASX as Australia eyes a re-opening of the economy following COVID-19 restrictions in 2020 and 2021.

The post Own Wesfarmers (ASX:WES) shares? It’s about to be payday…for you and the CEO appeared first on The Motley Fool Australia.

More reading

• Why the Woolworths (ASX:WOW) share price has outperformed Wesfarmers so far this year
• Here’s why the Wesfarmers (ASX:WES) share price is in focus today
• 4 ASX shares just got a massive boost
• These ASX 200 dividend shares are about to dish out $40bn to shareholders
• How have ASX retail shares performed during the August 2021 earnings season?

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/2XhS70l

We all know the damage that pandemic lockdowns and social restrictions have done to the retail sector. Traditional retailers – particularly those with a large brick-and-mortar presence – have struggled over the last 18 months.

Despite a recent rally, shares in Myer Holdings Ltd (ASX: MYR) are barely above their pre-COVID levels. And shares in Kathmandu Holdings Ltd (ASX: KMD) are still almost 50% off their February 2020 prices. Many other ASX retail shares have also suffered similar declines.

But despite these difficult market conditions, there is a new generation of ASX retail companies that have seen their share prices soar during the pandemic. These are companies with little (or no) physical shopfronts and that rely almost entirely on digital sales channels.

Investors have been favouring these companies over their traditional peers – and have sent their share prices rocketing into the stratosphere.

Let’s look at three of the ASX retail shares with some of the biggest price gains so far this year.

Dusk Group Ltd (ASX:DSK)

Dusk only listed on the ASX in November 2020 – but has already made quite an impression. Its shares are up almost 40% so far in 2021 (to $3.10, as at the time of writing).

Dusk specialises in home fragrance products such as candles, diffusers and essential oils. With people spending a lot more time at home during lockdowns, it’s easy to see why demand for its products has spiked.

However, Dusk is also something of an outlier on this list as it still makes the majority of its revenues through traditional channels. That said, online sales increased by 27% in FY21 and made up 7.5% of the year’s total sales.

FY21 was a bumper year for the company with sales up over 47% (to $148.6 million). As well, disciplined cost management meant that pro forma net profit after tax (NPAT) surged over 225% year-on-year (to $26.8 million). Pro forma NPAT is reported NPAT adjusted for some one-off items – the most notable of which was $6.6 million in costs associated with the company’s initial public offering.

City Chic Collective Ltd (ASX:CCX)

City Chic specialises in plus-size women’s fashion. It has expanded significantly during the pandemic and now has a strong presence in both the US and UK markets. City Chic also has a brick-and-mortar presence but pivoted strongly towards its digital sales channels last year.

City Chic reported sales revenues of $258.5 million for FY21, a year-on-year increase of almost 33%. This was driven by online sales which jumped 49.3% and made up more than 70% of City Chic’s total sales for the year. The result also showed the benefits of the company’s international expansion plans with more than 44% of sales coming from overseas markets.

The City Chic share price has surged almost 60% higher this year to $6.30 (as at the time of writing) and just recently set a new 52-week high price of $6.49.

Cettire Ltd (ASX:CTT)

The standout performer on this list of ASX retail shares is online luxury fashion retailer Cettire. Its share price has rocketed a scarcely believable 602% higher so far in 2021 to $3.49 (as at the time of writing). The massive share price gains have come on the back of incredibly strong FY21 financial results.

The company beat its own upgraded earnings guidance for the year, reporting sales growth of 304% year-on-year (to $92.4 million). The result also showed that the company was beginning to develop a loyal customer base, with 40% of FY21 sales from repeat customers (up from just 26% in FY20).

The positive momentum seems to have carried forward into FY22, with July unaudited gross revenue up 181% versus July 2020.

The post These three ASX retail shares delivered double (and triple!) digit returns in 2021 appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• The Dusk (ASX:DSK) share price is worth $5: fund manager
• Why the Cettire (ASX:CTT) share price is slumping 5% today
• The Cettire (ASX:CTT) share price is up a whopping 500% this year
• Why the Cettire (ASX:CTT) share price rocketed 24% higher on Friday

Motley Fool contributor Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Cettire Limited. The Motley Fool Australia has recommended Cettire Limited and Dusk Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3EoZlAP

The Vulcan Energy Resources Ltd (ASX: VUL) share price won’t be going anywhere on Tuesday after the company requested a trading halt.

What’s the trading halt for?

Vulcan said the trading halt was requested pending an announcement to the market in relation to a capital raising.

The company advised that its shares will remain halted until Thursday, 16 September or until an announcement is made in relation to the outcome of the capital raising.

According to the company’s June quarterly cash-flow report, it had $114.7 million in cash and cash equivalents at the end of the period.

Capital raising highlights

Vulcan launched an institutional placement to raise $200 million at an offer price of $13.50 per share. The offer price represents a 15.1% discount to its last closing price of $15.90 on Monday, 13 September.

In addition, the company intends to undertake a share purchase plan for existing eligible shareholders to raise up to a further $20 million.

The company is busy working through a number of prerequisites before construction kicks off for its flagship Zero Carbon Lithium project. This includes securing offtake agreements, the completion of a definitive feasibility study, and additional exploration activities.

Vulcan said the proceeds from the offer will be used to “accelerate exploration initiatives and expand Vulcan’s dual renewable energy and lithium development strategy”.

Vulcan share price rides the lithium hype

The Vulcan share price has climbed the ranks from a mere small cap 12-months ago to joining the S&P/ASX 300 (INDEXASX: XKO) index following the most recent indices rebalance.

Vulcan is aiming to become the world’s first lithium producer with net-zero greenhouse gas emissions. The company’s flagship Zero Carbon Lithium Project aims to operate as both an energy and lithium business, from the same geothermal brine resource.

The Vulcan share price continues to boom in 2021, up 474% year-to-date.

The post Here’s why the Vulcan (ASX:VUL) share price is frozen appeared first on The Motley Fool Australia.

More reading

• Vulcan (ASX:VUL) share price soars 12% to record high
• Which ASX 300 shares are leading the way as the top movers on Friday?
• Which ASX 300 shares are making headlines on Thursday?
• Why the Vulcan Energy (ASX:VUL) share price is in the spotlight this week
• Which ASX shares are set to finish the week as the top movers on the ASX 300?

Motley Fool contributor Kerry Sun owns shares of Vulcan Energy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/2XndLAr

The Zip Co Ltd (ASX: Z1P) share price is trading lower ahead of its Retail Investor Day event.

At the time of writing, the buy now pay later (BNPL) provider’s shares are down 2% to $6.89.

This means the Zip share price is now down almost 19% over the last six months.

Why is the Zip share price dropping today?

The weakness in the Zip share price today may have less to do with what was included in its presentation and more to do with what was not included in it.

Zip’s presentation provided the market with a lot of promising product updates, but didn’t give an update on its performance so far in FY 2022.

Given how there has been speculation that its rebrand has slowed momentum in the US, investors may have been hoping that these concerns were eased with a strong update today.

What was in the presentation?

Today’s presentation revealed a number of products that Zip is hoping will drive growth in the coming years.

This includes following the lead of rival Afterpay Ltd (ASX: APT) by offering savings accounts to its users. These accounts also appear to offer users the ability to access their pay ahead of time.

In addition, the company presented its cryptocurrency offering, which will allow users to buy, hold, sell, and even pay with crypto. Users will also be able to earn crypto rewards from purchases. There are cash rewards on offer for users that are not interested in cryptocurrencies.

Management also spoke about its global market opportunity. It highlights that the US market remains its highest priority and is forecasting strong growth in the BNPL market.

It estimates that the BNPL market currently accounts for 1.6% of the $5.2 trillion US retail market. However, it is forecasting this to grow to 4.5% in 2024.

Combined with growth in other markets, management believes this leaves Zip well-positioned to deliver material growth in the future.

The post Zip (ASX:Z1P) share price lower despite savings and crypto products update appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• ASX 200 tech shares are dragging the market on Monday
• Zip (ASX:Z1P) share price continues slide, down 13% in a month. What’s happening?
• Zip (ASX:Z1P) share price bounces as US rebrand puts a dent in traffic
• Here’s why the Zip (ASX:Z1P) share price is underperforming the tech sector over the past year

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3EcQHoF

The Incannex Healthcare Ltd (ASX: IHL) share price has been a winner on the ASX over the last few weeks and posted outsized gains.

Whereas the S&P/ASX 200 Index (ASX: XJO) has slipped 2.7% into the red over the past month, Incannex shares have soared 42% in that time to now trade at 39 cents each.

Let’s dive in to see what’s behind Incannex shares lately.

A bit more on Incannex and the industry

Incannex is a biopharmaceutical company that has expertise in medicinal cannabis and psychedelics. There is a wealth of research that now exists to support the use of these compounds as prescription-type medicine.

For instance, Incannex’s labels are indicated in conditions such as sleep apnoea, traumatic brain injury (TBI), osteo arthritis and rheumatoid arthritis, and inflammatory bowel disease (IBD).

At the time of writing, Incannex has a market capitalisation of $432 million.

What’s been driving the Incannex share price lately?

Incannex has been on the good end of clinical and regulatory tailwinds that have impacted its share price.

Earlier in March, the company revealed its drug candidate IHL–675A, indicated for use in rheumatoid arthritis, was more effective at reducing symptoms associated with rheumatoid arthritis versus other labels on the market.

This is promising news for the company, given that its CBD based treatment avenues appear to be gaining steam in the domain of autoimmune/auto-inflammatory disorders like rheumatoid arthritis.

In fact, in a nice add-on to the study, the IHL–675A compound was also found to be effective in treating other inflammatory based conditions such as bronchitis, asthma and colitis.

Incannex also recently announced its intention to float on the NASDAQ using American Depositary Receipts under the ticker “IXHL”.

It announced the filing of a Form F-1 last month with the US Securities and Exchange Commission (SEC). The F-1 form is what non-US companies file if wanting to list onto a US exchange, such as the NASDAQ. It’s the same as an initial public offering (IPO) on the ASX.

Aside from this, Incannex also successfully filed several patent applications in the last few months. It completed applications in Europe, Japan and Australia for its IHL–42X development program.

Investors bought Incannex shares on the patent news as well as the company’s FY21 results where it grew revenue 214% year on year.

There has been no other market-sensitive information for the company lately so it appears investors are buying Incannex shares on the back of these catalysts.

Incannex share price snapshot

The Incannex share price has posted outsized returns since January and has climbed 152% this year to date. This extends the gain over the past 12 months to a mammoth 561%.

Both of these results have far outpaced the broad index’s return of around 25% over the past year.

The post The Incannex (ASX:IHL) share price is up 40% in a month. Here’s why appeared first on The Motley Fool Australia.

More reading

• Why the Incannex (ASX:IHL) share price is rocketing 170% in 2021
• Why the Incannex (ASX:IHL) share price leapt 9% today

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3EgJxjq

The Tesserent Ltd (ASX: TNT) share price has been struggling lately despite several pieces of seemingly positive news having been released by the company.

Over the last month, Tesserent’s stock has fallen 22.41%. Right now, the Tesserent share price is 22.5 cents. This time last month it was 29 cents.

So, what spurred the cyber security company’s share price to tumble? Let’s take a look.

Tesserent struggles on the ASX

The Tesserent share price has been sliding lately despite the company posting strong financial year 2021 earnings and releasing news of an exciting acquisition.

The company released its results for financial year 2021 on 30 August.

Within them, it noted it had made a $4.9 million profit after tax and its revenue had been boosted 233% to reach $67.3 million.

However, the market showed indifference to Tesserent’s seemingly successful 12 months. The Tesserent share price ended the day exactly where it started it, before plunging 11% lower the following session.

The market’s cold reaction to Tesserent’s FY21 results was the second time a seemingly positive announcement fell flat for the company in August.

On 19 August, Tesserent announced its plan to acquire Australian cybersecurity company, Loop Secure.

Despite lifting during the session in which the company announced its acquisition, the Tesserent share price closed exactly where it had finished the previous day’s trade.

Tesserent plans to acquire Loop Secure for around $13.5 million, paying $9 million in cash and the rest in shares.

Tesserent share price snapshot

The Tesserent stock’s recent slide has added to its ongoing woes.

Right now, the company’s share price is 36% lower than it was at the start of 2021. It has also fallen 8% since this time last year. However, it is currently up 4.65% on the day.

The company has a market capitalisation of around $230 million, with approximately 1 billion shares outstanding.

The post Why is the Tesserent (ASX:TNT) share price down 22% in a month? appeared first on The Motley Fool Australia.

More reading

• Tesserent (ASX:TNT) share price fails to fly despite 230% revenue growth in FY21
• Why the Tesserent (ASX:TNT) share price is surging 7% higher today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3huZLeW

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Apple (NASDAQ: AAPL) stock took a hit late last week after a federal judge struck down some of the company’s App Store rules regarding how payment systems are managed in apps running on its products (like iPhones and iPads). The court’s decision involved a case brought by Fortnite creator Epic Games. While the ruling could hurt Apple, other requested changes Epic was demanding as part of its lawsuit did not get the court’s approval. Epic management said it plans to appeal.

The gist if the judge’s ruling is that developers are now allowed to send their app’s users to outside payment systems from within the app. The ruling does not require Apple to allow users to use Apple’s in-app payment system without paying Apple the 15% to 30% commission fee it charges.

App makers, game developers, and companies like Spotify (NYSE: SPOT) have long fought against the 30% fees Apple takes for transactions that take place on iOS devices, arguing that they should be able to use any payment system to sign up customers, rather than exclusively going through Apple’s payment system for accounts accessed on Apple devices. 

While there’s a chance the rulings that didn’t go Epic’s way will be overturned upon appeal, the case ended up being a partial win for Apple. It can still collect fees on transactions in its payment system. But the ruling also reinforced a trend that clearly suggests Apple’s grip on the App Store is loosening.

Earlier this month, for instance, Apple said it will allow “reader apps” and allow apps to use a single link to sign up customers on their own websites instead of using Apple’s payment system. This latest case pushes the envelope further, requiring that Apple has to allow other (outside) payment options for in-app purchases. The impact of changes like this on a growing tech company like Spotify could be profound. 

The Apple tax

Apple takes 30% of any transactions occurring in the Apple App Store or within its ecosystem. That may seem fair on the surface because the transactions are happening via Apple devices, but there are reasons these fees are being challenged in court and even in Congress right now. The basic argument is that Apple has gone too far in its efforts to control how app developers for its devices can make money.

The tech giant’s developer rules have long contained “anti-steering” provisions — essentially, developers were forbidden from even letting their customers know there was a way to pay for their services outside of the App Store. Developers were not allowed to provide a link from within the app, nor could they offer a third-party payment platform. All they could do was ask you to log in to your account, implying that you had to go to their website to sign up for the service. If you’ve ever downloaded an app hoping to try it only to see a login screen when the app first opens, this is the reason why. 

This developer provision has been particularly problematic for Spotify because the company has a free ad-supported business that it wants to make easy to use for customers. But Spotify ultimately wants customers to sign up for a premium service. To get around Apple’s anti-steering rules, the company literally says, “You can’t upgrade to Premium in the app. We know, it’s not ideal.” (see screenshot to the left) 

Apple opened up the “single link” option recently after Japan’s Fair Trade Commission started an investigation. But for Spotify, being able to integrate an in-app purchase option that isn’t subject to that 30% fee would be a game-changer because it’ll make it easier to convert more of its free service customers into paid subscribers. 

Spotify could be leveling the playing field

One big advantage Apple has always had over Spotify is the integration between its software and hardware — or in this case, between its ownership of the payment system and its ownership of apps like Apple Music and Apple Podcasts. Unquestionably, it’s easier to sign up for paid subscriptions to Apple’s apps with Apple’s form of payment, which is why the company doesn’t want apps steering customers to other in-app payment options. 

It isn’t just about the 30% fee though. When Spotify was forced to use Apple’s payment system, it gave up the ability to gather information about its customers. Apple closely guards information like users’ email addresses, demographics, phone numbers, and even street addresses. Spotify could try to collect that data by getting users to sign up outside of the Apple ecosystem or by asking the questions directly, but it was certainly forced to jump through hoops compared to the process for signing up for Apple’s own apps. 

If Spotify can make signup and payment simple for new users and collect data directly, the streaming company will not only be able to avoid the 30% fees, it should gain more insights about its users that will help it serve up more effective ads. And that’s where Spotify’s revenue and profit growth could come from. 

Don’t sleep on Spotify

Slowly, Apple’s grip on its App Store and payments is being loosened, and that’s great news for companies like Spotify. Whether it’s in music or podcasts, it has been fighting an uphill battle against Apple’s competing apps and payment rules for years. Now that some of those restrictions are being lifted, Spotify may have a chance to build an experience that matches or beats Apple’s own offerings. Don’t underestimate the impact this could have on Spotify, especially as it spends hundreds of millions of dollars to try to take on Apple in the booming podcasts business. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Apple’s epic loss could be a big win for Spotify appeared first on The Motley Fool Australia.

More reading

• Why I’m holding my Afterpay (ASX:APT) shares: expert
• Here were the most popular US shares for ASX investors last week
• Leading broker unmasks 4 top traded international shares
• Leading broker reveals why these 10 big-name shares have been firing up its clients
• Apple’s making a big change to the App Store; Here’s what investors need to know

Travis Hoium owns shares of Apple and Spotify Technology. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Apple and Spotify Technology. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/3AlG5Bq

Shareholders of insurance giant Insurance Australia Group Ltd (ASX: IAG) haven’t had much to cheer about the past few years.

The IAG share price is in the red in early trade on Tuesday after finishing 1.31% down Monday to close at $5.26. That’s a 12.6% rise in the past 12 months, but a 3.8% descent in the past 5 years.

Hardly exciting for ‘buy-and-hold’ enthusiasts.

But while the COVID-19 Delta strain paralyses much of Australia, multiple experts are picking it as a bargain buy.

The Firetrail Australian High Conviction Fund last month revealed that it’s one of the non-banking ASX finance shares that it’s overweight on.

According to CMC Markets, 7 out of 11 analysts rate IAG shares as a “strong buy”. One rates it as a “moderate buy”.

And there are no analysts currently recommending to sell.

Why are IAG shares so popular with experts at the moment?

Despite doubling its final dividend, IAG’s financial results last month underwhelmed the market.

So why are fund managers so bullish?

Aberdeen Standard Investments head of Australian equities Michelle Lopez hinted at some of the tailwinds that currently make insurance stocks attractive.

“Looking forward, the premium rate cycle momentum is expected to persist for longer and the competitive environment remains rational, allowing insurers to earn-through pricing increases and restore margins,” she posted last week on Livewire.

“Furthermore, outsized provisions that were booked by insurers like IAG for COVID business interruption claims continue to look conservative given the modest actual claims experience observed to date, as well as the conservative levels of risk margin that have been incorporated into these estimates.”

Depending on how some legal cases play out, Lopez reckoned investors might see a rainbow next year.

“Insurers like IAG may benefit from provision releases and capital surpluses in 2022.”

This may have already started playing out, with IAG revealing its cash earnings jumped 170% in last month’s financial report.

“Another positive during the year was its reported insurance profit of $1,007 million, which is an increase of 35.9% over FY 2020,” reported The Motley Fool’s James Mickleboro.

“This was due mainly to lower natural perils costs, positive credit spreads, and a first-half COVID-19 benefit largely from lower motor claims in Australia. This translated to an improved reported insurance margin.”

The post Why experts have high hopes for the IAG (ASX:IAG) share price appeared first on The Motley Fool Australia.

More reading

• Is the IAG (ASX:IAG) share price bouncing back in September?
• Why the IAG (ASX:IAG) share price has underperformed the ASX 200 in the last year
• How have ASX financial shares performed during the August 2021 earnings season?
• Here’s why the IAG (ASX:IAG) share price is slumping today
• Here’s why the IAG (ASX:IAG) share price is up 10% in a month

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/2X9t2Vb