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The Commonwealth Bank of Australia (ASX: CBA) share price has hit a new landmark high.

At the time of writing, shares in Australia’s largest bank are trading for $107.31 – up 0.70%. At the open today, shares hit a record high of $109.03.

The positive price movement comes after the company released its full-year earnings results, a full-year, fully franked dividend of $3.50 per share, and a $6 billion off-market share buyback.

Let’s take a closer look.

Commonwealth Bank’s FY21 results

For the FY21 financial year, Commonwealth Bank declared a net profit of $8.8 billion. That’s up 19.7% on the prior corresponding period (pcp). Operating income rose 1.7% on the pcp to $24.2 billion but operating expenses were up 3.3% on the pcp to $11.4 billion.

As a result, the company announced a final dividend of $2.00 per share, fully franked. Added to the interim dividend paid of $1.50 per share, that equates to a full-year dividend of $3.50 per share. At the current CBA share price, this is a 3.24% yield.

In FY20, Commonwealth Bank paid a full-year dividend of $2.98, fully franked – a 4.0% yield at the time.

While today’s dividend announcement is a rise on the pcp, it is not a record. In FY19, for example, the company paid a full-year dividend of $4.31, fully franked.

As well, Commonwealth Bank will buy back about $6 billion worth (or 3.5%) of its shares in an off-market purchase.

CBA share price snapshot

Over the past 12 months, the CBA share price has increased 43.4%. Over the same period, the S&P/ASX 200 Index (ASX: XJO) rose 23.7%.

Commonwealth Bank has a market capitalisation of around $190 billion.

The post Commonwealth Bank (ASX:CBA) share price record high after dividend boost appeared first on The Motley Fool Australia.

More reading

• CBA (ASX:CBA) sued by whistleblowing governance manager
• CBA (ASX:CBA) share price on watch after FY21 results & $6bn buyback
• 5 things to watch on the ASX 200 on Wednesday
• The ASX reporting wrap-up: Challenger, Megaport, James Hardie
• Is now a good time to buy Bendigo and Adelaide Bank (ASX:BEN) shares?

Motley Fool contributor Marc Sidarous 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.

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The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is pushing higher on Wednesday.

In morning trade, the banking giant’s shares are up 1% to $29.19.

Why is the ANZ share price pushing higher today?

Today’s gain by the ANZ share price is likely to have been driven by the release of a strong full year result by rival Commonwealth Bank of Australia (ASX: CBA) this morning.

That result appears to have given investor sentiment in the banking sector a major boost, helping to drive all of the big four banks higher today.

But also potentially giving the ANZ share price a lift has been the announcement of a key appointment in the C-suite.

What did ANZ announce?

This morning ANZ announced the appointment of Farhan Faruqui as its new Chief Financial Officer.

According to the release, Mr Faruqui joined ANZ in 2014 and is currently its Group Executive International. In this position he is responsible for ANZ’s institutional business in 19 markets across Asia, Europe, Middle East and America.

Prior to joining ANZ, Mr Faruqui had an extensive international banking career at Citigroup, where he held senior roles. This includes Head of Citi’s Corporate and Investment Bank in Asia Pacific, as well as its Global Loans and Capital Markets business in the region. He was also country officer for several countries in Africa and Europe.

In his new role as ANZ’s Chief Financial Officer, Mr Faruqui will have responsibility for all aspects of Finance as well as Treasury, Mergers and Acquisitions and Investor Relations. He will remain a member of the Group Executive Committee.

ANZ’s CEO, Shayne Elliott, commented: “After a comprehensive global search, I’m pleased to be able to appoint one of our most experienced executives with a long history of delivering outstanding results in highly-complex environments to this important leadership position.”

“Farhan has played a crucial role in the re-shaping of ANZ’s institutional and international business as a critical part of our overall franchise. I’m confident his strong financial acumen, strategic insight and fresh thinking will be of great benefit to our shareholders and our customers,” he added.

The ANZ share price is now up over 26% in 2021.

The post Why the ANZ (ASX:ANZ) share price is pushing higher today appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price was first listed on the ASX in mid-August 2002.

With nearly two decades to sift through, finding the biggest percentage move for Sydney Airport shares is nigh impossible.

In the past 18 months alone, the Sydney Airport share price has reacted sharply to several catalysts.

One of the best days for shares in Sydney Airport can be traced back to early July of this year.

Sydney Airport share price boosted by takeover offer

The Sydney Airport share price received a huge boost early last month.

Shares in the company surged more than 34% for the day, following a $22.6 billion buyout offer.

A consortium of infrastructure investors – IFM Investors, Global Infrastructure Management, and QSuper – launched the takeover offer, valuing Sydney Airport at $8.25 per share.

Sydney Airport’s management initially noted that the takeover offer of $8.25 per share was below where shares in the company were trading pre-pandemic.

Before the COVID-19 pandemic, the Sydney Airport share price was trading at around $8.95.

Since then, the company has raised approximately $2 billion in equity and seen its share price peak and trough.

In addition, rumours began to swirl that another consortium led by Macquarie Group Ltd (ASX: MQG) was considering a counter bid.

Sydney Airport formally rejected the takeover offer for 100% of its shares in mid-July.

Outlook for Sydney Airport shares

Sydney Airport is Australia’s largest international gateway. The company generates revenue through aeronautical, retail, property, car rental and parking operations.

With widespread COVID-19 lockdowns hampering the Australian travel sector yet again, Sydney Airport could receive extra attention this reporting season.

Investors have long favoured shares in Sydney Airport for their dividend yield.

However, the infrastructure giant has approximately $10 billion in debt attached to its balance sheet.

In addition, Sydney Airport recently flagged a 56.8% decline in domestic traffic compared to pre-pandemic levels in 2019.

These factors could raise the concerns of some investors, especial given the indefinite reopening of free travel.

Sydney Airport will release its 2021 half-year results on Friday 20 August.

The post When was the best day on the Sydney Airport (ASX:SYD) share price chart? appeared first on The Motley Fool Australia.

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• If you invested $2,000 in Sydney Airport (ASX:SYD) shares 10 years ago, here’s what it would now be worth

Motley Fool contributor Nikhil Gangaram 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 Macquarie Group Limited. 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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A sudden collapse in iron ore prices has tipped the Fortescue Metals Group Ltd (AS:X FMG) share price off a cliff.

Shares in the iron ore major have tanked 8% in the last week and are down 15% since all-time highs of $26.48 on 29 July.

Iron ore prices fall below US$200/tonne

Iron ore prices were standing tall at the end of July, with spot prices trading at around US$210/tonne according to Market Index.

However, prices would quickly deteriorate to below US$170/tonne this week.

China is headlining the weakness in iron ore prices, with its government requesting that steel mills produce no more than their 2020 volumes, according to Mining.com.

Chinese steel production in the first half lifted almost 12% compared to 2020 figures, suggesting a significant cutback is needed.

More recently, Mining.com flagged that China’s iron ore demand might continue to remain weak in the near term, ahead of its Beijing Winter Olympic Games in February 2022.

It claims, “Steel hub Tangshan will extend existing curbs to March 13 next year to ensure good air quality for the Games, researcher Mysteel reported, citing a draft document issued by the city’s environmental office.”

The article pointed to Beijing’s 2008 Olympics, where authorities shut down a number of industrial operations near the capital.

While output came to a grinding halt, the city enjoyed “blue skies for an entire month”.

This isn’t the first time

Between 26 February and 22 March, the Fortescue share price experienced a 23% drawdown under similar circumstances.

Tangshan, one of China’s most polluted cities, was ordered to limit or halt production on certain days to reduce its emissions of air pollutants.

Fortescue share price snapshot

The Fortescue share price is down 9.23% year-to-date, greatly underperforming both the S&P/ASX 200 Index (ASX: XJO) and ASX 200 Materials Index (INDEXASX: XMJ) which have rallied 13.7% and 13.08% respectively.

A catalyst on the horizon for Fortescue shareholders is its FY21 results.

The highly anticipated announcement is expected to land on 30 August.

The post The Fortescue (ASX:FMG) share price is down 8% in a week. Here’s why appeared first on The Motley Fool Australia.

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• How is the Mineral Resources (ASX:MIN) share price holding up against the materials sector?

Motley Fool contributor Kerry Sun 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.

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Commonwealth Bank of Australia (ASX: CBA) is in the news this week for more than this morning’s $6 billion share buyback announcement.

In a less fortuitous turn of events, CBA group governance executive general manager Kara Nicholls is suing the bank.

Why is CBA facing a lawsuit?

According to Nicholls, CBA’s governance team has long been understaffed and overworked which has led to an excessively high turnover rate in the department.

Nicholls says she sounded the alarm to her superiors on numerous occasions but little to no action was taken to rectify the situation.

Now she’s facing the loss of her job and is suing CBA, as the Australian Financial Review reports, for “allegedly seeking to fire her last week in response to ‘whistleblower’ complaints she made to senior officers and chairman Catherine Livingstone about the bank’s failure to respond to repeated warnings on understaffing and workers’ safety”.

The Federal Court claim alleges:

The [bank] acted with conscious and contumelious disregard of the rights and interests of Ms Nicholls, and of the rights and interests of employees in the group governance team, including by way of raising legitimate concerns as to workplace health, safety, culture and resources.

CBA’s spokesperson noted that the bank won’t be commenting on the matter as it’s currently before the Federal Court. They said the bank “takes any concerns raised by its current or former employees very seriously”.

How has CommBank been performing?

The new pending lawsuit aside, CBA shareholders have largely enjoyed a stellar 12 months.

CBA’s share price has gained 43% since this time last year, almost twice the 23% gains posted by the S&P/ASX 200 Index (ASX: XJO) over that same time.

CBA has also maintained its dividend payments throughout the COVID-19 pandemic turmoil. At the current price of $106.56 per share, CBA pays a dividend yield of 2.39%, fully franked.

The post CBA (ASX:CBA) sued by whistleblowing governance manager appeared first on The Motley Fool Australia.

More reading

• CBA (ASX:CBA) share price on watch after FY21 results & $6bn buyback
• 5 things to watch on the ASX 200 on Wednesday
• The ASX reporting wrap-up: Challenger, Megaport, James Hardie
• Is now a good time to buy Bendigo and Adelaide Bank (ASX:BEN) shares?
• How did the CBA (ASX:CBA) share price respond last earnings season?

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.

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Investors are selling down the Mineral Resources Limited (ASX: MIN) share price upon market open on Wednesday.

This is on the back of the major miner reporting its full-year results to the ASX this morning.

Mineral Resources share price on watch after net profit more than triples

• Underlying net profit after tax up 230% year on year to $1,103 million
• Revenue up 76% to $3,734 million
• Operating cash flow up 144% to $1,600 million
• Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) up 148% to $1,901 million
• Profit for the year attributable to shareholders up 26.5% to $1,269.7 million
• Fully franked final dividend of 175 cents per share. Full year dividend up 175% to $2.75 per share.

What happened in FY21 for Mineral Resources

The Mineral Resources share price might be an upwards mover today after the fifth largest iron ore producer reported its record-setting FY21 results.

On the top line, the company generated $3,734 million in group revenue during the 12-month period. This was 76% higher year on year and driven by continued growth across the business. For instance, mining services experienced an increase in volumes of 20%. Meanwhile, iron ore and spodumene exports both surged 23% compared to the prior corresponding period (pcp).

Additionally, the bottom line benefitted by increasing commodity prices during the year. The Platts Iron Ore 62% Fines Index (Platts) gained 66% to an average of US$155 per dry metric tonne. On the other hand, the average realised lithium spodumene price came in at $535 per dry metric tonne, a decrease of 13% on the pcp. A macro catalyst that has seen the Mineral Resources share price rise 113% in the past year.

Furthermore, total exports surpassed the previous year with total iron ore equating to 17.274 million wet metric tonnes. The increase in export volume and prices resulted in Mineral Resources delivering an underlying net profit after tax of $1,100 billion – an increase of 230%.

Likewise, the company’s mining services business performed strongly and was primarily driven by growth in operations at the Yilgarn and Utah Point hubs. This was in addition to new external contracts.

The strong performance leaves Mineral Resources with a sturdy cash balance of $1,542 million at 30 June 2021. This is despite the miner pouring $745 million into investments for growth into the future. For example, the development of Wonmunna for the Utah Point hub, increasing Yilgarn Hub production, and new external mining services plants to support new contracts.

Another plus of abundant cash flow was that management declared a final fully franked dividend of $1.75 per share. Mineral Resource shareholders will see nearly $330 million returned to them in the process.

What did management say?

Commenting on the blockbuster result, Mineral Resources Managing Director Chris Ellison said:

I am proud to say that Mineral Resources has delivered a record year in terms of tonnes produced and shipped, revenue and profit reported, and dividends declared. The full-year result is the culmination of continued strong growth in our Mining Services division, which is our Company’s heartbeat, and realises the rewards from our decision to build long horizon businesses in iron ore and lithium.

What’s next for Mineral Resources and its share price?

Closing out Mineral Resources’ results, the company shed some light on its future direction. The plan is to “develop innovative, lower carbon mining services materials handling and infrastructure solutions”, something that bodes well following yesterday’s IPCC climate report findings.

Finally, the miner gave some guidance for FY22. The company is forecasting 21 million tonnes to 22 million tonnes in iron ore exports between the Yilgarn hub and Utah point hub for FY22. Meanwhile, Mineral Resources expects 450,000 to 475,000 tonnes in spodumene exports during the next full year.

The Mineral Resources share price has delivered sizeable returns to shareholders in the past year. Specifically, the miner’s shares have climbed 113% in value compared to the 23.2% from the S&P/ASX 200 Index (ASX: XJO).

The post Mineral Resources (ASX:MIN) share price slips on FY21 earnings appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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.

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The IRESS Ltd (ASX: IRE) share price is storming higher on Wednesday morning.

At the time of writing, the financial technology company’s shares are up 6% to a record high of $15.25.

Why is the IRESS share price storming higher?

Investors have been bidding the IRESS share price higher today after it confirmed the receipt of yet another improved takeover proposal from EQT Fund Management.

This follows the receipt of offers from EQT in June of $14.80 per share and in July of $15.30 to $15.50 per share.

According to the release, IRESS has received a further confidential, non-binding, and indicative proposal from EQT to acquire all of IRESS’’ shares at a revised implied value of $15.91 cash per share before franking credits.

This comprises a cash consideration of $15.75 plus a permitted FY 2021 interim dividend for eligible shareholders of up to $0.16 per share.

The release notes that previous proposals made by EQT assumed there would be no further dividends paid by IRESS or capital management prior to completion of any transaction.

The implied value of the new proposal represents a 45.3% premium to the undisturbed IRESS share price on 9 June. It is also a premium of 10.8% to the IRESS share price at the close of play on Tuesday.

It values IRESS at an equity value of $3.1 billion and an enterprise value of $3.2 billion. This means EQT would be acquiring IRESS for 37x its FY 2023’s underlying earnings target.

Due diligence granted and potential board recommendation coming

The IRESS Board revealed that it has carefully considered the proposal. This includes obtaining advice from its financial and legal advisers.

Following this, the Board considers it in the best interests of shareholders to engage further with EQT. As a result, it has agreed to grant the suitor a period of 30 days to undertake its due diligence. It has also agreed to certain exclusivity provisions during this period.

In addition, the release notes that IRESS’ Directors intend, subject to the entry into a scheme implementation deed on acceptable terms, to unanimously recommend that shareholders vote in favour of the proposal. This will be in the absence of a superior proposal and subject to an independent expert concluding that the proposed transaction is in the best interests of shareholders.

However, for the time being, it recommends that shareholders take no action in relation to the proposal. It also warned that there is no certainty that the proposal will result in an offer capable of acceptance for IRESS shareholders.

The IRESS share price is now up 42% in 2021.

The post IRESS (ASX:IRE) share price shoots higher after new takeover proposal appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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Last year saw Australia and New Zealand Banking Corporation (ASX: ANZ) shares facing a sea of volatility. However, the silver lining may be that it heralded the ANZ share price’s best day on the ASX in recent history.

On 17 March 2020, the ANZ share price gained a massive 11.85% in a single session. It started the day trading for $16.45 and finished it at $18.40.

Even more impressive, the singular day’s gains came amid a strong downward trend driven by the impacts of the COVID-19 pandemic.

Between 21 February 2020 and 27 March 2020, the ANZ share price fell a whopping 43%.

So, what happened on 17 March? Let’s take a look.

COVID-19 update

On 17 March 2020, the ANZ share price was boosted on the back of a COVID-19 update.

The update came in the form of a transcript of an interview with ANZ’s CEO Shayne Elliott. The interview had been conducted by the managing editor of ANZ’s own media publication Bluenotes.

Elliott spoke of ANZ’s “framework” that the bank was using the manage the pandemic.

He said the bank planned to protect its customers and employees first and it was undergoing an adaptation in response to the unprecedented times.

Elliott also noted its businesses were going to rebound which likely eased the minds of many anxious market watchers. The inspired confidence likely caused the ANZ share price’s massive gain.

Elliott told the publication:

As we know, we’ve gone through lots of crises over the last few decades, whether the Asian financial crisis, global financial crisis and others. When you go into a normal financial crisis actually, it’s really hard to see the end, the light at the end of the tunnel because you just don’t know how long that recession or that downturn is going to last… But actually, in this case, you sort of have a reasonably good idea. As we mentioned before, you can see that with effective policy and swift action, this can be a three, four, five-month impact…

The other side of it, of course, is that we’re in a great position in terms of strength. And what I mean by that is that ANZ — and the banks in Australia as an industry — have never had more capital. Never in our history have we had more capital, we’ve never had more liquidity.

Elliott also spoke of ANZ’s shareholders, saying “they understand the nature of our business is cyclical”. He said shareholders knew as long as the bank put customers first, it would come out fine.

Those interested in hearing more of Elliott’s view of the early stages of the pandemic’s effects on ANZ, can find a video of the full interview here.

ANZ share price snapshot

Since March 17 2020, the ANZ share price has gained 56.9% to well and truly recover from the worst of the pandemic.

Right now, shares in ANZ are going for $28.88 apiece.

The post When was the best ever day on the ANZ (ASX:ANZ) share price chart? appeared first on The Motley Fool Australia.

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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.

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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.

The Walt Disney Company (NYSE: DIS) is known for producing excellent content and being home to some of the industry’s most valued media assets. The House of Mouse is making a push into streaming content, which could put pressure on Netflix (NASDAQ: NFLX).

The streaming pioneer has a multi-year head start against Disney and has already amassed a subscriber total of over 200 million. Disney is making up ground quickly. Disney+ launched in November 2019, and already has over 100 million subs. The initial success gave Disney’s management confidence to push more chips to the table, committing to spending $15 billion at the midpoint on content in 2024. Can Netflix hold its own against the longtime media powerhouse?

Content wars

Netflix often says that competition from other streaming services is not hurting its own results. At first glance, that may not be easy to believe. The streaming market has exploded with fresh alternatives over the last couple of years. However, if you consider that the addition of several streaming service providers makes it more likely customers will cancel their cable TV or satellite service, Netflix’s argument makes more sense. Indeed, according to Nielsen, streaming consists of just 27% of U.S. screen time, while linear TV holds a much larger time slice of 63%.

Netflix’s basic membership costs $8.99. Disney’s bundle that includes Disney+, Hulu, and ESPN+ can be had for $13.99 per month. Given these low prices, there is room for a household to have multiple streaming subscriptions.

Certainly, Disney’s announcement that it will be spending $15 billion on content in 2024, combined with popular media assets like Star Wars and Marvel, will make it a formidable option for consumers. Indeed, of the all-time top 10 grossing films at the box office, seven of them are owned by Disney. Such is the popularity of Disney’s assets.

But Netflix is no slouch in the content spending category, either. In 2019, Netflix spent $14.6 billion on content, and $12 billion in 2018. The streaming pioneer has 209 million subscribers and brought in revenue of $7.3 billion in the most recent quarter. This large base of revenue gives Netflix plenty of firepower in the competition. The difference will be that Netflix does not have as high a quality of media assets to build upon.

What this could mean for investors

In the end, this battle between streaming giants should be great for viewers. More spending on content is likely to result in lots of great films and shows to watch. If that attracts more people to the services, then investors will win also. The goal of these streaming providers should not be to compete against each other. Rather, they should be competing against other entertainment options. There is room for several winners in this rapidly expanding market.

Disney and Netflix would like to siphon attention from Alphabet‘s YouTube, and even Facebook. Folks only have a limited time they can spend on leisure, and if you are watching videos on YouTube, you’re not on Netflix. Similarly, if you’re browsing on Facebook, you’re not watching Disney+.

Therefore, investors looking at streaming providers boosting spending on content can think of it as a good thing for the industry as a whole.

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

The post Disney could spend $15 billion on content annually: Can Netflix compete? appeared first on The Motley Fool Australia.

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Parkev Tatevosian owns shares of Alphabet (C shares) and Walt Disney. 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 its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Facebook, Netflix, and Walt Disney. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Facebook, Netflix, and Walt Disney. 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.

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The Webjet Limited (ASX: WEB) share price has been hit hard during COVID-19 as the federal and state governments enforced travel restrictions. Although almost 60% higher than this time last year, the online travel agent’s shares have more than halved in value since January 2020.

At Tuesday’s market close, Webjet shares finished the day flat at $5.10.

How Webjet shares react to lockdowns

When COVID-19 arrived on the world stage, investors feared the travel industry would be the first to feel the impact. And they were right. Webjet saw international and domestic bookings cancelled, along with its WebBeds business becoming almost non-existent.

As a result, Webjet shares fell from the $14 mark at the beginning of 2020 to a lowly $2.25 in late April 2020. For the first time in history, the Australian international border, as well as state borders, closed.

Webjet had been forced to go into hibernation mode in a move to reduce costs and save the business. Its shares have been volatile, picking up when state governments ease border restrictions but plummeting when parts of the country re-enter lockdowns.

This was evident when Victoria went into a hard lockdown from March 2020 to June 2020. Webjet shares had started to rise to around $4.50 when the state declaring it was beating the virus and relaxed restrictions.

However, this was short-lived. Just 2 weeks later, Victoria again went back to stage 4 restrictions, with Webjet shares tumbling to under $3 again.

What about the current COVID-19 lockdown?

Fast-forward to today, the Webjet share price is hovering around $5 as the near-term future remains uncertain. Vaccination rates are increasing by the tens of thousands per week, but parts of Australia remain in lockdown. This includes Victoria, North Queensland and many parts of New South Wales.

The latter may not open in time for the busy Christmas holiday season, recording 356 new cases yesterday. If this happens, it would have a detrimental effect on Webjet shares.

Webjet share price snapshot

Over the last 12 months, Webjet shares have accelerated almost 60% since hitting near COVID-19 lows.

Currently, the company’s share price is sitting just above the middle of its 52-week range of $2.63 to $6.33.

Based on its current valuation, Webjet has a market capitalisation of around $1.93 billion with approximately 379 million shares outstanding.

The post How does the Webjet (ASX:WEB) share price perform during lockdowns? appeared first on The Motley Fool Australia.

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• What’s the outlook for the Webjet (ASX:WEB) share price?
• If you’d invested $2,000 in Webjet (ASX:WEB) shares 10 years ago, here’s what it would be worth now

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 owns shares of and has recommended Webjet Ltd. 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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