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S&P/ASX 200 Index (ASX: XJO) listed telco Spark New Zealand Ltd (ASX: SPK) is marching higher in early trade.

Spark shares closed yesterday trading for $4.45 each and are currently at $4.54 a share, putting the company’s shares up 2.02% for the day so far.

This comes after the New Zealand-based telecommunications service provider reported a NZ$900 million (AU$820 million) divestment.

What asset is the ASX 200 telco selling?

The Spark share price is marching higher after the company reported the Ontario Teachers’ Pension Plan Board will acquire a 70% interest in its TowerCo business.

The transaction values the business – with some 1,263 sites in New Zealand – at NZ$1.18 billion. According to Spark, this represents an FY23 pro-forma earnings before interest, taxes, depreciation and amortisation (EBITDA) multiple of 33.8 times.

The acquisition, subject to approval from the Overseas Investment Office, is forecast to occur in the first half of the 2023 financial year. On approval, the ASX 200 telco expects net cash proceeds of NZ$900 million.

Spark reported that the deal includes a 15-year agreement with TowerCo for access to existing and new towers, along with a commitment to build 670 new sites over the coming decade.

What did management say?

Management at the ASX 200 telco believes the deal will maximise shareholder value.

According to Spark chair, Justine Smyth:

The establishment of TowerCo will accelerate Spark’s strategic objective of delivering a smart, automated network, while maximising value for shareholders.

The transaction will deliver proceeds of $900 million, enabling direct shareholder returns and investment in future growth opportunities that will accelerate Spark’s transition from traditional telecommunications to higher growth digital services.

Bruce Crane, senior managing director at Ontario Teachers added, “This investment builds on our long track record of investing in superior businesses in New Zealand and will draw on our deep experience investing in digital infrastructure businesses globally.”

Spark CEO Jolie Hodson noted that the ASX 200 telco will “continue to own all the ‘smarts’ of our network – such as radio equipment and spectrum – which is what drives our competitive advantage and differentiation in the market”.

How has the ASX 200 telco share been performing?

Spark has been a strong performer in difficult market conditions this year.

Since the opening bell on 4 January, the Spark share price has gained 6%. That compares to a year-to-date loss of 13% posted by the ASX 200.

At the current share price, Spark shares pay a 5.8% trailing dividend yield, unfranked.

The post ASX 200 telco marches higher on $820 million asset sale appeared first on The Motley Fool Australia.

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More reading

• Broker gives its verdict on the WiseTech share price
• Electro Optic Systems share price dips amid shock CEO resignation
• ‘Gems in the chaos’: The outlook for ASX 200 shares in FY23
• How did ASX biotech shares perform in FY22?
• Zip share price jumps 6% after merger deal with Sezzle is cancelled

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 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 Scott Phillips.

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The WiseTech Global Ltd (ASX: WTC) share price has not been immune to the tech selloff in 2022.

Since the start of the year, the logistic solutions technology company’s shares have dropped 32% to $40.66.

This is broadly in line with the S&P ASX All Technology index, which is down 35% year to date.

Is the WiseTech share price good value now?

The team at Goldman Sachs have been looking at the tech sector and have given their verdict on the WiseTech share price.

And while the broker isn’t recommending it as a buy just yet, it does see scope for its shares to push higher.

According to the note, the broker has retained its neutral rating and cut its price target by 15% to $45.00. Based on the current WiseTech share price, this implies potential upside of almost 11% for investors.

What did the broker say?

Goldman notes that global trade conditions are weakening and highlights the impact this could have on its CargoWise (CW) business. And while it expects price increases to offset some of this, it isn’t enough to stop it from lowering its estimates a touch.

One positive, though, is that its CW revenues could receive a boost if one of its customers, DSV Panalpina, makes a major acquisition.

The broker explained:

We note weakening global trade conditions, which WTC is exposed to with c.50% of CW revenues on a transaction basis. Further potential M&A could support ongoing large customer wins. We note recent press reports suggesting DSV Panalpina (CW customer) reportedly interested in acquiring Top 25 LGFF CH Robinson Fowarding (non-CW).

Overall we revise revenues lower on weaker FY23/24E volume growth contributions, partially offset by higher pricing expectations (given pricing power, and market inflation), while update for spot FX (which drives overall EBITDA upgrades of +0-1%). Our 12m TP is -15% to A$45.

The post Broker gives its verdict on the WiseTech share price appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Here are the top 10 ASX shares today
• Why are ASX 200 tech shares sprinting higher today?
• Top broker picks two ASX 200 tech shares for today’s economy
• Here are the top 10 ASX shares today

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. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Electro Optic Systems Holdings Ltd (ASX: EOS) share price is in the red today while the broader ASX climbs.

During early morning trade, the defence contractor’s shares are down 3.11% to 94 cents apiece.

In contrast, the All Ordinaries Index (ASX: XAO) is 0.23% higher to 6,808.5 points.

CEO steps down

Investors are selling off Electro Optic Systems shares amid the company’s leader stepping down.

According to yesterday’s late afternoon release, Electro Optic Systems advised that its CEO, Dr Ben Greene, has tendered his resignation.

However, the board stated that it is well advanced in finding a replacement and Dr Greene’s resignation will take effect upon the new appointment.

But he’s staying with the company

Given the wealth of knowledge that Dr Greene possesses within the sector, the board has offered him a different role.

As such, Dr Greene has accepted the position of head of innovation.

Electro Optic Systems chair, Peter Leahy touched on the succession, saying:

Dr Greene’s resignation as CEO comes after several decades of committed service and leadership to EOS as its founder and leader.

Dr Greene’s technological and engineering capabilities can only be described as world leading and visionary, with his initial designs of remote weapons systems and space situational awareness capabilities setting a global standard in the defence and space technology sectors.

Leahy went on to add:

…The Board welcomes Dr Greene’s ongoing commitment to the Company as its Head of Innovation, where his tremendous technological and scientific capabilities will be put to best use.

The board also pointed out that it is considering director suitability as part of a broader strategic review. The team is actively exploring its strategic options across the company to maximise shareholder value.

Electro Optic Systems shareholders may want to keep a close eye on this. The strategic review is expected to be released in the coming weeks.

About the Electro Optic Systems share price

A difficult 12 months marred by unfavourable trading conditions has led to the Electro Optic Systems share price sinking nearly 80%.

In 2022, the shares are down 60% on the back of continued selling pressure.

Based on today’s share price, Electro Optic Systems has a market capitalisation of roughly $157.7 million.

The post Electro Optic Systems share price dips amid shock CEO resignation appeared first on The Motley Fool Australia.

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More reading

• Own Electro Optic Systems shares? Here’s how the company is raising $17 million
• Why is the Electro Optic Systems share price hitting a new 52-week low?
• Here’s why the Electro Optic Systems share price collapsed 26% today
• Why Carsales, EOS, Imugene, and Tyro shares are sinking today
• Why is the Electro Optic Systems share price frozen today?

Motley Fool contributor Aaron Teboneras has positions in Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The second half of FY22 was challenging for ASX 200 investors, with the S&P/ASX 200 Index (ASX: XJO) dropping 13.5%.

A number of factors are weighing heavily on investors’ minds as we commence the new financial year.

These include the war in Ukraine and its impact on energy prices and international geopolitical stability, and rapidly rising inflation and interest rates both here at home and abroad.

The result so far has been a flight to quality. That means more investors are seeking safety in high-quality ASX 200 value shares and avoiding the riskier growth shares category.

This mindset is likely to last for a while. Remember, many investors have never been through periods of significantly rising interest rates or inflation before. So, uncertainty is likely to reign in FY23.

One professional investment manager says investing over the next decade will be harder, but long-term ASX investors should seek opportunities.

In a downturn, there is opportunity

James Holt is the director of investment solutions at diversified financial services company, Perpetual Limited (ASX: PPT).

In a recent article published on the ASX website, Holt says Perpetual believes “there is always value to be found somewhere in the market”.

Holt says:

It’s easy to feel bearish given the number of challenges investors are confronting. Fire, flood, pandemic, inflation, war, rising interest rates and market volatility are dominating the headlines.

While Perpetual considers that investing over the past decade was easier, with all equity markets rising from March 2009 lows, investing in a predicted “dangerous decade” of higher volatility, inflation and geopolitical uncertainty will be harder. 

Holt adds: “As always, there are gems in the chaos”.

Which ASX 200 shares do you buy in a downturn?

While Holt does not name names, he does discuss sectors that look appealing to Perpetual right now.

Holt says:

In this environment, stocks of interest to Perpetual may include those which could benefit from food and energy inflation or that mine green metals like copper, nickel, rare earths and cobalt which are required to fuel the rise of electric vehicles. 

Some businesses also benefit from rising rates, like insurers as their investment returns rise.

With long locked-down consumers looking for experiences, we also like parts of the travel and tourism sectors.

Holt says his team avoids low-quality companies “with poor business models, no earnings, too much debt or which are badly managed in our opinion”. 

The post ‘Gems in the chaos’: The outlook for ASX 200 shares in FY23 appeared first on The Motley Fool Australia.

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More reading

• The ASX sector set to pay out ‘massive record dividends’: fund manager
• 5 things to watch on the ASX 200 on Tuesday
• Could the Nickel Industries share price more than double from here?
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday

Motley Fool contributor Bronwyn Allen 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 Scott Phillips.

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ASX biotech shares were hammered in FY22 with the sector facing heavy losses, in line with the wider technology sector.

The ETFs S&P Biotech ETF (ASX: CURE), an index fund tracking the global biotech sector, is down almost 24% this year to date, and 33% in the last 12 months.

This is despite the ETF climbing from 52-week lows back in June, showing ASX biotech shares strengthening into the new financial year, as illustrated below.

Here are three notable biotech shares to emerge from the pack:

Telix Pharmaceuticals Ltd (ASX: TLX)

Shares of Telix tracked the biotech sector closely in FY22 and finished around 22% in the red. The company’s share price also strengthened in late June and rallied into the new financial year.

This followed a key update from the company. Telix signed a license and distribution agreement with Isologic Innovative Pharmaceuticals Ltd (Isologic).

The agreement is for the commercialisation of Telix’s investigational prostate cancer imaging agent, Illuccix.

Isologic is the leading radiopharmaceutical network in Canada, servicing 265 hospitals and clinics
across the country, Telix said.

Momentum has continued into the new financial year with Telix advising yesterday it had dosed the final patient and completed recruitment for its Phase 3 ZIRCON pivotal study.

Mesoblast Ltd (ASX: MSB)

Shares of Mesoblast, on the other hand, didn’t have such an enjoyable run in FY22. The share price bounced repeatedly to new lows until finally bottoming at 61 cents on June 30.

The company left investors underwhelmed last financial year and is now down 61% in the past 12 months, and 43% this year to date. Mesoblast shares are valued at 80 cents each at the time of writing.

The company posted its financial and operational highlights for the last quarter on 1 June although the market was agnostic to the report.

In May, a former shareholder began legal proceedings in the Federal Court alleging Mesoblast misled the market on its remestemcel-L label. This added further pressure to the company’s share price.

The company has also faced similar allegations in the US.

IDT Australia Ltd (ASX: IDT)

Shares of IDT were heavily compressed in FY22 and finished the year deep in the red. Losses have continued to date with the company’s share price finishing around 60% lower last financial year.

One contributing factor was a company update in March. IDT notified the market its submission to the Modern Manufacturing Initiative (MMI) for a Manufacturing Collaboration Stream Grant had been unsuccessful.

But the biggest blow came after IDT was advised that its submission to potentially develop an onshore mRNA manufacturing capability would not progress.

When the company announced its knockback from the federal government back in December 2021, investors ran for the hills.

As a result, IDT shares were heavily punished and plunged 64% from the close on 30 November 2021 to 27 January 2022.

The post How did ASX biotech shares perform in FY22? appeared first on The Motley Fool Australia.

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More reading

• Bell Potter names 2 of the best ASX healthcare shares to buy in FY23
• These are the 10 most shorted ASX shares
• Why Austal, Mesoblast, Regis Resources, and Zip shares are charging higher
• Why is the Mesoblast share price leaping 19% today?
• Why has the Mesoblast share price crashed 40% since April?

Motley Fool contributor Zach Bristow 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 Scott Phillips.

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The Zip Co Ltd (ASX: ZIP) share price is soaring today amid the termination of a merger with Sezzle.

Zip shares are currently trading at 55.25 cents, a nearly 11% gain. Meanwhile, Sezzle Inc (ASX: SZL) shares are plunging more than 33% at the time of writing. For perspective, the S&P/ASX 200 Index (ASX: XJO) is climbing 0.53% today.

Let’s take a look at what is going on at Zip.

Merger agreement terminated

Zip and Sezzle have mutually agreed to cancel their plan to merge. Zip originally announced its intention to acquire Sezzle on 28 February for about $491 million.

The Buy Now Pay Later (BNPL) company will now pay Sezzle $11 million to cover costs, including legal and accounting.

Zip highlighted it remains focussed on its strategic plan and returning to profit by the 2024 financial year.

Commenting on the news, Zip board chair Diane Smith-Gander said:

We believe that mutually terminating the merger agreement with Sezzle at this
time is in the best interests of Zip and its shareholders, and will allow Zip to focus
on its strategy and core business in the current environment

Zip reiterated today that its business ‘remains strong’ and it is continuing to see customer and transaction growth. The company highlighted that the US market is a “significant opportunity” and its core market. In a statement, Zip added:

Zip is well capitalised to execute on its strategy and in line with previous guidance, Zip continues to expect to deliver group profitability during FY24.

Some experts had expressed concern about the proposed merger in recent times. For example, as my Foolish colleague Sebastian reported in May, East 72 founder Andrew Brown said: “Zip should not buy Sezzle, it should pay the fee and walk away”.

Zip share price snapshot

The Zip share price has plunged 83% in the past year, while it has fallen nearly 78% year to date.

In the past five years, Zip shares have fallen around 18%.

In contrast, the benchmark ASX index has fallen about 9% in the past year.

The post Zip share price jumps 6% after merger deal with Sezzle is cancelled appeared first on The Motley Fool Australia.

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More reading

• Sezzle share price plunges 35% as Zip merger scrapped
• Own Zip shares? BNPL player shuts down finance app to focus on profitability
• Down 6%, why Monday is not a fun day for the Zip share price
• Why did some ASX BNPL shares plummet more than 90% in FY22?
• Guess which 2 ASX shares were the best and worst All Ordinaries performers of FY22

Motley Fool contributor Monica O’Shea 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 ZIPCOLTD FPO. 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 Scott Phillips.

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The Sezzle Inc (ASX: SZL) share price is tumbling this morning as what was once a $491 million merger deal is binned.

Sezzle and its former suitor, buy now, pay later (BNPL) giant Zip Co Ltd (ASX: ZIP), have abandoned their plan to join forces.

At the time of writing, the Sezzle share price is 27 cents, 34.94% lower than its previous close.

Let’s take a closer look at the latest news to drag on this ASX BNPL share.

Sezzle share price plummets on transaction termination

The termination of the deal is mutual and effective immediately. A release from Zip noted its dumping was “in light of current macroeconomic and market conditions”.

Sezzle co-founder, executive chair, and CEO Charlie Youakim said the company will keep pushing towards profitability and free cash flow.

Youakim said:

While we were excited by the potential of this transaction, our board and management team are laser-focused on our strategy and execution … [We] believe this is the best outcome for our shareholders.

The share prices of both Sezzle and Zip have plummeted more than 75% since the merger was announced in February.

The previously agreed-upon takeover deal would have seen Sezzle shareholders receive 0.98 Zip shares for every Sezzle stock held.

Zip has agreed to pay Sezzle US$11 million to cover the costs associated with the dumped transaction.

Sezzle provides quarterly earnings update

The Sezzle share price may also be responding to the company’s preliminary unaudited results for the June quarter released today.

The BNPL provider’s underlying merchant sales are expected to come in at between US$415 million and US$420 million for the three months ended 30 June.

It also expects to report between US$28.5 million and US$29.5 million of income for the quarter. Considering transaction-related costs, that range falls to between US$8.5 million and US$9.5 million.

Sezzle ended the quarter with approximately US$71 million of cash and availability on its line of credit facility.

The post Sezzle share price plunges 35% as Zip merger scrapped appeared first on The Motley Fool Australia.

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More reading

• Zip share price jumps 6% after merger deal with Sezzle is cancelled
• Own Zip shares? BNPL player shuts down finance app to focus on profitability
• Down 6%, why Monday is not a fun day for the Zip share price
• Why did some ASX BNPL shares plummet more than 90% in FY22?
• Guess which 2 ASX shares were the best and worst All Ordinaries performers of FY22

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 positions in and has recommended ZIPCOLTD FPO. 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 Scott Phillips.

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If you’re looking for exchange traded funds (ETFs) to buy, then the two listed below could be top options.

Here’s why analysts say these ETFs could be in the buy zone now:

ETFS Battery Tech & Lithium ETF (ASX: ACDC)

The first ETF that has been rated as a buy recently is the ETFS Battery Tech & Lithium ETF.

This ETF gives investors exposure to the electrification and decarbonisation trend through a range of companies involved in battery technology and lithium mining. This includes BYD, Mineral Resources Limited (ASX: MIN), Nissan, Pilbara Minerals Ltd (ASX: PLS), and Renault.

One analyst that is positive on the ETF is Jessica Amir from Saxo Markets. She recently said:

If [lithium] stock picking is not for you, and if you believe, like we do, that the electric vehicle industry and the critical minerals/ commodities will continue to see rising demand, and policy support, and also benefit from the world striving to be carbon neutral by 2050, then you could invest or trade in Global X Lithium & Battery Tech ETF (LIT) or ETFS Battery Tech & Lithium ETF (ACDC) that invests in about 30 of the biggest EV and battery technology companies in the world.

VanEck Vectors MSCI World ex Australia Quality ETF (ASX: QUAL)

Another ETF that has been rated as a buy for investors is the VanEck Vectors MSCI World ex Australia Quality ETF.

This ETF provides investors with access to a portfolio of high quality shares outside Australia. These are companies with low leverage, high growth rates, and high returns on equity such as Apple, Microsoft, Nike, and Nvidia.

Sarah Gonzales from Apt Wealth is a fan of the ETF. This is due to its focus on quality, which tends to perform better during market downturns. She recently told Livewire:

My preferred ETF is the VanEck MSCI International Quality ETF. I think it provides exposure to that quality factor, which tends to outperform in market downturns. It does focus on factors like return and equity, year-on-year growth of earnings and also levels of debt. These are proxies for profitability, earnings variability, and the level of debt of companies. Particularly if we are going into a recession,  I think these are really the factors that I think we should focus on.

The post Why analysts say these top ETFs are buys appeared first on The Motley Fool Australia.

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More reading

• Here are 2 buy-rated ASX ETFs for casting a wider net during uncertainty
• Here are 2 high quality ETFs analysts rate as buys

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. 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 Scott Phillips.

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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.

Twitter‘s (NYSE: TWTR) stock tumbled to a four-month low on 8 July after Elon Musk formally terminated his $44 billion takeover bid for the company. In a Securities and Exchange Commission (SEC) filing, Musk’s legal team said Twitter had breached the terms of the deal by making “false and misleading representations” regarding the social media platform’s number of “fake or spam accounts”.

The legal team also said Musk had “reason to believe that the true number of false or spam accounts on Twitter’s platform is substantially higher than the amount of less than 5% represented by Twitter in its SEC filings” and that an inability to gauge its true monetizable daily active user (mDAU) count obfuscates the growth prospects of its core advertising business.

Twitter responded by filing a lawsuit against Musk. In a tweet, chairman Bret Taylor said the board remained “committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement”.

As this legal battle drags on, Twitter’s stock is likely to stagnate and remain far below Musk’s “best and final offer” of $54.20 per share. Is it too late to buy Twitter’s underwhelming stock, which has actually delivered a negative return since its first post-IPO trade in November 2013?

Why did Twitter underperform the market?

When Twitter went public, then-CEO Dick Costolo claimed the platform could reach 400 million monthly active users (MAUs) by the end of 2013. It broadly missed that target, started losing MAUs instead, and ultimately replaced that metric with its current mDAU metric in 2019.

Twitter’s mDAUs rose 13% to 217 million in 2021, and it claims it can reach 315 million mDAUs by the end of 2023. That target seems extremely bullish since it would require Twitter’s mDAU growth to accelerate to about 20% in both 2022 and 2023. It also claimed it could generate $7.5 billion in revenue in 2023 — which would require its revenue to grow at a compound annual growth rate (CAGR) of 21.5% over the next two years.

Period	2019	2020	2021
mDAUs	152 million	192 million	217 million
Growth (YOY)	21%	27%	13%
Revenue	$3.46 billion	$3.72 billion	$5.08 billion
Growth (YOY)	14%	7%	37%

Data source: Twitter. YOY = Year over year.

Twitter hasn’t withdrawn that guidance yet, but analysts expect its revenue to only rise 16% this year and then grow just 22% to $7.2 billion in 2023.

In April, Twitter also admitted that it had miscalculated its mDAUs over the past three years by counting multiple accounts for single users as separate mDAUs. Twitter claims that miscalculation only affected about two million mDAUs, but that mistake — which only surfaced after Musk placed his bid — raised red flags regarding its spam accounts.

Twitter’s co-founder Jack Dorsey, who succeeded Costolo in 2015, launched new features like its short-lived “Fleets” feature, organized “topics” for tweets, new tipping services, and “Twitter Blue” verified subscriptions for top accounts — but it still struggled to expand beyond its niche.

Dorsey resigned last year and was succeeded by Parag Agrawal, who focused on increasing Twitter’s mix of higher-value ads and rolling out new e-commerce features to become a “social shopping” platform like Pinterest and Meta Platforms‘ Instagram.

Twitter shouldn’t have sued Musk

Twitter has continued to grow over the past three years, but its earnings growth has been messy. In 2019, its net income was inflated by a $1.21 billion tax benefit. In 2020, it posted a net loss after incurring a $1.1 billion tax charge and COVID-19 expenses.

In 2021, it racked up another net loss after paying $766 million in legal fees to resolve a class action lawsuit regarding its MAU growth forecasts back in 2014. The impact of those taxes and legal fees can be seen in the gap between its reported and adjusted earnings, which exclude those charges:

Period	2019	2020	2021
Net Income	$1.47 billion	($1.14 billion)	($221 million)
Net Margin	42%	(31%)	(4%)
Adjusted Net Income	$259 million	($34 million)	$165 million
Adjusted Net Margin	7%	(1%)	3%

Data source: Twitter.

This May, Twitter settled a privacy lawsuit with the Department of Justice (DOJ) and Federal Trade Commission (FTC) for $150 million. If Twitter sues Musk, it could rack up even higher legal fees this year.

Analysts expect Twitter to generate a net profit of $540 million this year, partly due to its recent sale of MoPub to AppLovin (NASDAQ: APP) for $1.05 billion, but to post a much lower net profit of $130 million in 2023.

Twitter would net a $1 billion termination fee from Musk if it simply lets him walk away. That seems to be a smarter and more cost-efficient decision that would finally allow Agrawal to reset Twitter’s business.

It’s not the right time to buy Twitter stock

Twitter’s stock still isn’t cheap at nearly 40 times next year’s adjusted earnings. The macro headwinds will likely force it to abandon its ambitious growth targets for 2023, and its decision to sue Musk instead of accepting the termination fee raises additional red flags. Simply put, it’s still not the right time to buy this volatile social media stock.

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

The post Elon Musk doesn’t want to buy Twitter anymore, and neither should you appeared first on The Motley Fool Australia.

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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. Leo Sun has positions in Meta Platforms, Inc. The Motley Fool Australia’s parent company has positions in and recommends Meta Platforms, Inc., Pinterest, Tesla, and Twitter. 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 Scott Phillips.

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

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The Aussie share market is heading north today despite Wall Street recording another loss overnight.

Investors are defying the sell-off that occurred on the United States-based Nasdaq ahead of the major reports due this week.

In case you weren’t aware, United States inflation readings for June are set to be released this Wednesday along with the domestic jobs data on Thursday.

In early morning trade, the S&P/ASX 200 Index (ASX: XJO) is climbing by around 0.70% to 6,647.20 points.

Nonetheless, the Metcash Limited (ASX: MTS) share price is treading the opposite way.

At the time of writing, the wholesale distributor’s shares are down 2.55% to $4.21.

Shareholders lock in the Metcash dividend

Following the company’s full-year results released late last month, investors are eyeing Metcash shares as they go ex-dividend today.

This means if you purchased the company’s shares yesterday or before, you will be eligible for the latest dividend.

Traditionally, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors try to make a quick profit after securing the dividend.

For those eligible for the Metcash FY22 dividend, shareholders will receive a payment of 11 cents per share on 10 August.

The dividend reflects an increase of almost 16% when compared to the prior corresponding period (9.5 cents per share).

Furthermore, the dividend is fully franked at a corporate tax rate of 30%, which means investors will receive tax credits.

Under the company’s capital management framework, the targeted payout ratio is around 70% of underlying profit after tax.

Shareholder distributions totalled $408 million in FY22.

Are Metcash shares still a buy?

Following the financial scorecard for the full year, analysts at Macquarie weighed in on Metcash shares.

According to ANZ Share Investing, the broker raised its 12-month price target by 2.2% to $4.60 for the company’s shares.

In addition, Citi also lifted its rating by 4.8% to $4.40 apiece for Metcash shares.

It appears both brokers are in line with what investors believe the company’s shares should be worth in the current climate.

Metcash share price snapshot

Since the beginning of 2022, Metcash shares have lost 4% on the back of weakened investor sentiment.

However, the benchmark ASX 200 index is down almost 12% over the same time frame.

Metcash has a price-to-earnings (P/E) ratio of 17.30 and commands a market capitalisation of roughly $4.16 billion.

The post Why is the Metcash share price in reverse today? appeared first on The Motley Fool Australia.

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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 Scott Phillips.

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