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The PlaySide Studios Limited (ASX: PLY) share price has landed on the Australian share market with a bang following the completion of its initial public offering (IPO).

At one stage today, the video game developer’s shares were changing hands for as much as 41 cents.

This was more than double the IPO listing price of 20 cents.

At the time of writing, the PlaySide share price is up 65% from its listing price to 33 cents.

What is PlaySide?

Melbourne-based PlaySide is one of Australia’s largest independent video game developers with over 52 titles developed.

This includes games based on original intellectual property (IP) and games developed with Hollywood studios such as Disney, Warner Bros, and Nickelodeon.

It operates in a mobile games market which is estimated to be worth $77.2 billion after growing at 13.3% year on year.

The PlaySide IPO.

PlaySide commenced trading on the Australian share market today following the completion of an IPO that raised $15 million from investors at 20 cents per share.

The company revealed that the IPO received strong support from a broad range of institutional and retail investors.

Upon listing, Playside will have approximately 366.5 million shares on issue, giving it a market capitalisation of $73 million based on the IPO price.

Where will it spend the IPO proceeds?

Management intends to use the funds raised from the IPO to secure the rights to develop mobile games from select media brands within its Brands & Licensing Division and expand its development team to support new original titles.

PlaySide will also invest additional resources in its data analytics team, sales and marketing teams, and user acquisition. In addition, it plans to open a business development office in Los Angeles when the risk from the COVID-19 can be appropriately managed.

Managing Director, CEO, and Co-Founder, Gerry Sakkas, commented: “PlaySide has in the past few years proven its ability to make games that millions of people love to play while sustainably building a profitable business on a global stage and, having now listed on the ASX, we believe we’ll be able to scale our skills, science and art to unlock significant value for PlaySide shareholders.”

“As a close team we are excited and motivated for the next phase of our journey and, as you can see from the business update today, we’ve continued our growth momentum through the IPO period and I look forward to updating you regularly on the rewards of our hard work,” he concluded.

More reading

• Embattled Freedom Foods (ASX:FNP) sells business segment
• Why investors are pushing the Carnarvon Petroleum (ASX:CVN) share price higher
• Why this broker thinks the Wesfarmers (ASX:WES) share price can go higher
• ASX 200 up 0.7%: Zip capital raising, A2 Milk trading halt, Sydney Airport dividend update
• WPP AUNZ (ASX:WPP) share price skyrockets 22% after 2 major announcements

Motley Fool contributor James Mickleboro 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 Freedom Foods Group Ltd (ASX: FNP) share price won’t be going anywhere today, despite the company announcing it’s offloading its cereal and snacks business. Freedom Foods shares have remained suspended from trading on the ASX since 25 June this year.

The Freedom Food share price last closed at $3.01.

What did Freedom Foods announce?

Freedom Foods has today announced the sale of its cereal and snacks operations to The Arnott’s Group.

According to Freedom Foods, the divestment follows an ongoing program to create a leaner and simpler business model. The company is seeking to cut its product range in order to improve profitability, while focusing on growth.

The decision follows a previous announcement on 30 November, in which Freedom Foods advised it was reviewing its cereal and snacks segment. Although the company had considered a ‘fix and retain’ option, it came to the conclusion the best strategic option was to offload the business.

Terms of the sale

Under the agreement, Freedom Foods will sell certain assets and liabilities of the cereal and snacks business for $20 million. The cash payment is expected to provide a net amount of $11 million after transaction costs and equipment leases.

The sale will include manufacturing facilities in Leeton and Darlington Point in New South Wales, and Dandenong in Victoria. The transfer of brands comprises Freedom Foods, Messy Monkeys, Heritage Mill, Arnold’s Farm, and Barley Plus.

The transaction is expected to be completed on 1 March 2021 pending customary conditions.

Furthermore, the sale of the Freedom Foods cereals brand will see the company change its corporate name. Management said more information will be provided to shareholders on this subject at a later stage.

What did management say?

Freedom Foods Group interim CEO Mr Michael Perich spoke about the sale. He said:

We believe the Cereal and Snacks business will thrive under an owner such as The Arnott’s Group, which is committed to investing in the business and employees to ensure a sustainable and successful future.

This decision is consistent with the new executive team’s strategy of simplifying both our business structure and product range to ensure we are maximising growth opportunities in Dairy and Nutritionals and Plant-based Beverages.

Adding to his comments, Arnott’s Group CEO Mr George Zoghbi went on to say:

This purchase of manufacturing sites and leading consumer brands from Freedom Foods Group will accelerate our strategy of entering new product categories and unlock innovation to benefit customers and consumers.

This will add three Australian manufacturing sites to our already well-invested domestic supply chain. Once the purchase is finalised, our domestic manufacturing network will extend across eastern Australia from Virginia in Queensland, Huntingwood, Leeton and Darlington Point in NSW to Shepparton and Dandenong in Victoria and Marleston in South Australia.

More reading

• Freedom Foods (ASX:FNP) faces class action lawsuit
• Freedom Foods (ASX:FNP) reveals $174.5m loss and $280m capital raising plan
• Freedom Foods (ASX:FNP) prepares for return to trading

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods 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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The Carnarvon Petroleum Limited (ASX: CVN) share price is moving higher today, up 3.5% at the time of writing.

This comes after the company released a progress report on its Buffalo oil field, located offshore Timor-Leste in the Bonaparte Basin.

What did Carnarvon announce today?

In this morning’s update to the ASX, Carnarvon reported that it is progressing with plans to drill its Buffalo-10 well. Carnarvon plans to commence drilling in late 2021. The company has entered into a binding agreement with Advance Energy to support the redevelopment.

In the newly formed joint venture, Advance will fund the drilling of the well up to US$20 million (A$26.6 million) on a free carry basis. In return it will acquire up to a 50% interest in the Buffalo project. If additional funding is needed from third party lenders, Advance has agreed to provide that as an interest free loan.

Carnarvon will continue as the operator. The agreement remains subject to fulfilling the customary conditions, including obtaining government approvals.

Commenting on the partnership, Carnarvon’s CEO, Adrian Cook, said:

Carnarvon is excited to welcome Advance Energy into the Buffalo joint venture and together we look forward to drilling the Buffalo-10 well next year and moving forward with the redevelopment of the Buffalo oil field.

The Buffalo redevelopment opportunity is well placed to succeed given its known production capability and low development cost and will be greatly enhanced as oil prices continue their recovery.

We look forward to Advance completing their capital raise activities and the joint venture is eager to get started, with drilling planning already underway. Carnarvon is incredibly well placed for an exciting 2021 as we add drilling at the Buffalo Project to our Dorado FEED activities and the Bedout exploration drilling campaign.

Carnarvon share price and company snapshot

Carnarvon Petroleum is an Australian-based company primarily engaged in oil and gas exploration, development, and production. Its exploration projects include Phoenix, Labyrinth, Condor and Eagle, Outtrim and Maracas, and the Buffalo oil field.

Like most ASX energy shares, Carnarvon’s share price fell of cliff as COVID-19 saw oil and gas prices plummet. Its shares fell 69% from 6 January through to 23 March. Since that low shares have rebounded 143%, compared to a 52% rebound of the broader All Ordinaries Index (ASX: XAO) over that same time.

Year-to-date the Carnarvon share price remains down 19%.

More reading

• PlaySide Studios (ASX:PLY) share price doubles on ASX debut
• Embattled Freedom Foods (ASX:FNP) sells business segment
• Why this broker thinks the Wesfarmers (ASX:WES) share price can go higher
• ASX 200 up 0.7%: Zip capital raising, A2 Milk trading halt, Sydney Airport dividend update
• WPP AUNZ (ASX:WPP) share price skyrockets 22% after 2 major announcements

Motley Fool contributor Bernd Struben 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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It has been an extraordinary year for the Wesfarmers Ltd (ASX: WES) share price after it hit a record, all-time high of $51.64 this week. This brings its year-to-date returns to over 23%, with a dividend yield of approximately 3%. While the Wesfarmers share price might be sitting at record all-time highs, this broker thinks it can push higher. 

Broker raises Wesfarmers share price target 

Credit Suisse Group has this week raised its price target for Wesfarmers shares from $51.59 to $55.83 while retaining its outperform rating. The broker believes the Officeworks business stands to benefit from the work from home trend continuing and feels Bunnings also remains in a solid position. 

Economic data to support retail spending 

In the minutes of the Reserve Bank of Australia’s (RBA) December monetary policy meeting, the board noted that the domestic economic recovery had established reasonable momentum, aided by the lifting of restrictions in Victoria. Expectations for GDP growth in the September and December quarters had been upgraded over the preceding month, and employment had also recovered faster than anticipated. 

In reviewing recent data, the members noted that household consumption had rebounded strongly, and was assisted by a bounce-back in spending in Victoria. Indicators such as retail trade, new car sales and payments information indicated that the recovery in consumption would continue in the December quarter, supported by high household savings. 

Wesfarmers trading update 

The Wesfarmers trading update released last month reiterates the continued strength of the retail sector. The company experienced continued significant demand for its Bunnings, Officeworks and Catch businesses following the strong results reported in the second half of 2020. Wesfarmers Managing Director Rob Scott said the trading restrictions in Melbourne caused significant pent up demand, resulting in very strong trading performance across stores in Melbourne when they re-opened on 28 October. 

For Bunnings, strong sales growth has continued for both consumer and commercial segments. Excluding metropolitan Melbourne sales, total sales growth of 29.3% was recorded year to date. In the company’s FY20 results, Bunnings contributed 48.8% to the group’s revenue. 

Excluding metropolitan Melbourne stores, Kmart and Target have achieved total sales growth of 12.1% and 6.7% respectively for the year to date. The Kmart group contributed 29.8% of the group’s revenue for FY20. 

For Officeworks, sales growth has been supported by the strong demand for technology and home office furniture products. Excluding metropolitan Melbourne stores, total sales growth of 27.3% was recorded for the year to date. Officeworks contributes a lessor amount to the group’s earnings, sitting at just 9% for FY20. 

At the time of writing, the Wesfarmers share price is trading at $51.31, up 0.37% for the day so far. 

More reading

• Wesfarmers and these ASX shares just hit 52-week highs or better
• Wesfarmers (ASX:WES) share price is on fire, up 3% to reach all-time high
• Why the Webjet (ASX: WEB) share price is climbing higher
• Leading brokers name 3 ASX shares to buy today
• ASX 200 Weekly Wrap: ASX 200 hits a 6! Thank iron ore

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to build on yesterday’s solid gain. The benchmark index is currently up 0.7% to 6,726.8 points.

Here’s what is happening on the market today:

Zip capital raising.

The Zip Co Ltd (ASX: Z1P) share price is pushing higher today after announcing a $150 million capital raising. The buy now pay later provider has raised $120 million from institutional investors at a 4.1% discount of $5.34 per new share. It will now seek to raise a further $30 million via a share purchase plan. These funds will be used to support its US growth, UK expansion, and product development.

A2 Milk trading halt.

The A2 Milk Company Ltd (ASX: A2M) share price was placed into a trading halt this morning at the company’s request. The fresh milk and infant formula company made the request so it could look at the impact of new “information” on its FY 2021 guidance. It commented: “We are requesting a trading halt to provide us with additional time to properly consider the current information and to consider new information as it becomes available, and inform the market.”

No dividend from Sydney Airport.

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is dropping lower today after it released an update on its dividend plans. According to the release, the airport operator will not be paying a final dividend in FY 2020. Management explained that it made the decision “given the continued significant impact of COVID-19 on the business performance of Sydney Airport over the second half of the calendar year.”

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Thursday has been the Perenti Global Ltd (ASX: PRN) share price with a 7% gain. This is despite there being no news out of the mining services company. The worst performer has been the Service Stream Limited (ASX: SSM) share price with a 12% decline. This means the network services company’s shares are now down 23% in the space of two days following an NBN update.

More reading

• Citigroup picks the best ASX retail stocks to own for 2021
• Why the a2 Milk Company (ASX:A2M) share price is in a trading halt
• Sydney Airport (ASX:SYD) share price lower on dividend and traffic update
• Why the Bapcor (ASX:BAP) share price is rocketing 9% higher today
• Why 2021 may be an even better year for ASX investors

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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended Service Stream 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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Shares in public relations and marketing company WPP Aunz Ltd (ASX: WPP) shot up 22% today as the company emerged from a trading halt. This follows 2 major announcements today.

WPP AUNZ this morning reported an upbeat outlook for FY21, and also announced a revised takeover offer from its parent WPP to 70 cents a share, up from 55 cents.

At the time of writing, the WPP AUNZ share price is trading at 70 cents, up 12 cents.

Strong trading outlook update

The PR company provided business outlooks for the financial year ending 31 December 2020 (FY20), and also the financial year ending 31 December 2021 (FY21). 

WPP AUNZ advised its FY20 net sales are expected to be between $607 million and $610 million, a decline of around 14% to 15% on FY19. This is primarily due to the impact of COVID-19.

The FY20 headline earnings before interest and tax (EBIT) is expected to be $59 million to $62 million.

For FY21 meanwhile, the company expects to see net sales of between $630 million and $650 million, an increase from FY20.

Headline EBIT  is also expected to come in higher than FY20, between $85 million and $95 million.

WPP AUNZ is also on track to deliver $70 million in cost savings for 2020. These sustainable cost measures are expected to provide a benefit of approximately $65 million in FY21.

The company expects to declare a dividend as part of its FY20 result, which will be announced in late February 2021. 

Takeover proposal update

Also today, WPP AUNZ advised that its parent company, British-based WPP plc (LSE: WPP), has lifted its offer price to buy out the remaining shares it doesn’t already own to 70 cents a share.

The offer – originally announced on 30 November – was previously at 55 cents, and was revised as WPP agreed to WPP AUNZ declaring and paying total and special dividends of up to 15 cents a share. The new offer values the WPP AUNZ at at an enterprise value of $717 million.

About the WPP AUNZ share price

The WPP AUNZ share price has increased by around 5% this year, after plunging by 66% to 18.5 cents in March – its 52-week low. The 52-week high on the other hand, is 63.5 cents.

The company commands a market cap of $485 million.

More reading

• Meet the latest ASX stock to come under the takeover spotlight
• ASX stock of the day: WPP Aunz (ASX:WPP) shares surge 30%

Motley Fool contributor Eddy Sunarto 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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ASX retail stocks have been one of the surprise winners on the market in 2020, but are they still good bets in the New Year?

While the S&P/ASX 200 Index (Index:^AXJO) is struggling to reclaim all its lost ground during this COVID‐19-stricken year, the consumer discretionary sector is sitting on gains of over 7%.

Many of the listed players have benefitted from the COVID shutdown at the expense of privately-held retailers.

ASX retailers’ surprising tailwind in 2020

This would have surprised many ASX investors as recessions normally spell bad news for the entire consumer-exposed industry.

However, government cash handouts have given our economy a big and much needed boost. Online retailers and those that sell products aimed at stuck at home consumers have shined.

But as the world regains its footing after the pandemic, some are questioning if these ASX stock outperformers have passed their “best by” dates.

Are ASX retail stocks still worth buying?

This is a fair question as many have hit record highs and are not looking good value. But they can at least enjoy a last $54 billion hoorah.

“After a very difficult year, we expect consumers will treat themselves, their family and friends,” said Citigroup.

“Conditions are ripe for a great Christmas for retailers. Households have more cash, demand for home and food items is likely to be strong and inventory positions are lean, leading to good gross margins.”

Cashed up consumers make these ASX

The broker noted that households would normally spend $3,700 in December. It looks like a reasonably safe bet that this will happen again.

The average bank balance has increased by $12,500 and credit card debt has reduced by just over $500.

“Online sales growth is tapering off, but overall spending looks strong with a late surge likely next week,” added Citi.

“Our strongest feedback is in liquor, electronics and sports.”

ASX retail stocks to buy in 2021

While investors may be nervous about momentum carrying through in to 2021, Citi remains bullish on the sector.

This is particularly for retailers in housing and grocery, where industry conditions are more resilient.

The ASX retail stocks that Citi is putting on its shopping list for 2021 include the Woolworths Group Ltd (ASX: WOW) share price and Super Retail Group Ltd (ASX: SUL) share price.

Others that make the cut are the Baby Bunting Group Ltd (ASX: BBN) share price, Bapcor Ltd (ASX: BAP) share price and Harvey Norman Holdings Limited (ASX: HVN) share price.

More reading

• Why the Bapcor (ASX:BAP) share price is rocketing 9% higher today
• Why 2021 may be an even better year for ASX investors
• Could ASX retail shares be the best ASX shares to own right now?
• What today’s economic outlook means for the BHP (ASX:BHP) share price
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brendon Lau owns shares of Woolworths Limited. The Motley Fool Australia owns shares of and has recommended Bapcor and Super Retail Group Limited. The Motley Fool Australia owns shares of Woolworths 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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The A2 Milk Company Ltd (ASX: A2M) share price won’t be going anywhere today after being placed in a trading halt before the market open.

Why is the a2 Milk Company share price in a trading halt?

This morning a2 Milk Company requested an immediate trading halt after it became aware of information that could have an impact on the guidance it provided in late September.

Management explained: “We have become aware of information which may require us to release an announcement to revise our previously issued guidance to the market. We are requesting a trading halt to provide us with additional time to properly consider the current information and to consider new information as it becomes available, and inform the market.”

No other details were provided in relation to what this “information” is.

What is a2 Milk Company’s current guidance?

In late September A2 Milk Company provided guidance for first half revenue in the region of NZ$725 million to NZ$775 million and full year revenue in the region of NZ$1.8 billion to NZ$1.9 billion.

This represents a 3.9% to 10.1% decline for the first half and then a 4% to 9.8% increase for the full year.

Management is also forecasting an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 31%. This would result in EBITDA of NZ$558 million to NZ$589 million for FY 2021, up 1.5% to 7.1% from NZ$549.7 million a year earlier.

Is a2 Milk Company going to downgrade its guidance?

At this stage it is unclear whether a2 Milk Company is going to be downgrading or upgrading its guidance.

However, the request for a trading halt is reasonably ominous and appears to be hinting at a downgrade.

Particularly given the unpredictable trading conditions the company has been facing due to pantry destocking and weakness in the daigou channel.

When giving its guidance in September, management commented: “This disruption in the daigou channel is impacting our September sales and it is currently anticipated that this will continue for the remainder of the first half of FY21. Sales in the daigou channel represent a significant proportion of infant formula sales in our Australia & New Zealand (ANZ) business and, as such, we now expect ANZ revenue to be materially below plan for the first half.”

An update is likely to be released to the market on Friday morning.

More reading

• Got cash to invest? Here are 3 ASX growth shares to buy
• Top ASX shares to buy in 2021
• 10 highly rated ASX shares to buy in 2021
• 5 ASX shares rated as buys by top fundie
• 2 ASX growth shares to buy for big returns in 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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.

At first glance, this has been a great year for investors in Facebook (NASDAQ: FB). As of this writing, Facebook’s 33% year-to-date stock price gain is nearly three times greater than the S&P 500 Index‘s (INDEXSP: .INX) return during the same period.

Despite the strong performance, it’s been a difficult year in Menlo Park, California, as the company finds itself increasingly in the crosshairs of government regulators.

At the federal level, President Donald Trump issued an executive order in May to overturn Section 230 of the Communications Decency Act, a provision that protects social media companies against lawsuits related to content posted on their sites. In a move that raised the ante on earlier threats, Trump announced he would veto the yearly defense bill if Section 230’s repeal was not included in the legislation.

As the biggest news distribution outlet in the world, it was likely Facebook would eventually clash with a president who’s pugilistic attitude toward anything or anyone who challenges him is part of why his supporters like him, but what’s notable is the significant erosion in support for the company from Trump’s detractors as well. Early this month a consortium of attorneys general for 46 states, the District of Columbia, Guam, and the FTC filed an antitrust suit seeking to break up the company.

As the company faces increased regulatory threats and lawsuits, founder Mark Zuckerberg should consider if it’s time to step aside as CEO of Facebook.

Bigger problems than antitrust

It’s clear the bigger risk to Facebook currently is the antitrust lawsuit originating at the state level, but even it’s an odd case. Led by New York Attorney General Letitia James, the antitrust lawsuit seeks to revisit prior corporate acquisitions – Instagram in 2012 and WhatsApp in 2014 – that were approved by the US government.

More telling was AG James’ retweet of US Rep. Alexandria Ocasio-Cortez’s (D-New York) statement that Facebook “abused its market power to … manipulate democracies and crush journalism”. It’s apparent that US politicians have broader concerns with Facebook than 5-year-old acquisitions, and the fact that nearly every state attorney general signed on points to the fact that this is a rare area of bipartisan agreement.

Suffice it to say, Facebook is entering a radically different regulatory environment, and this requires a different mindset from the C-suite. Mark Zuckerberg has been a tremendous founder and CEO, but the skillset he embodies – “move fast and break things” – might no longer be the right one for a company that now controls the digital publishing industry and essentially dictates the national conversation.

Facebook is no longer a scrappy start-up. Instead, it’s the biggest, most influential social media company in the world. As such, what Facebook needs is not a growth-oriented mindset, but rather a CEO with a level of emotional intelligence that rivals Mahatma Gandhi’s and who can balance the needs of a long list of critical stakeholders, politicians being key among them.

If anybody thinks this means Zuckerberg will have no influence, think again. He will remain as board chair and maintain his dual class of shares that gives him a majority of voting rights. Simply put, no big decisions will be made without his approval.

Who’s on deck?

Recently, there’s been a host of op-eds attacking Zuckerberg for seemingly everything wrong in American discourse, often in deeply personal framing. Let me be clear, this article is not one of them. Zuckerberg created a company from nothing that is on pace to become a trillion-dollar giant before Zuckerberg reaches the age of 40. It also made him a very young billionaire. In strict Peter Principle framing, Zuckerberg’s plateau is enviable and unlikely to happen again.

However, with much power comes much responsibility: Facebook at its best is a community builder, a relationship enabler, and a connector. However, these tools can be used to spread misinformation, encourage violence, and destabilise governments. These are legitimate and hard-to-solve issues that require careful consideration.

Stepping down in favor of a new CEO isn’t a failure for Zuckerberg, but rather an acknowledgment that the company has entered a new phase in its development. While his age is often mentioned, what’s less discussed is that he’s been the CEO since Facebook’s founding in 2004, a period significantly longer than the average S&P 500 CEO tenure of 10 years.

There’s also precedent in this move, most notably from early-stage Alphabet (then operating as Google) when Larry Page handed the CEO reins over to Eric Schmidt. A succession plan is never easy, but it’s a critical component of a multi-generational company. Facebook should lead here by starting these discussions in earnest.

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

More reading

• ACCC hauls Facebook to court for ‘deceptive’ conduct
• Zip (ASX:Z1P) share price pushes higher on Facebook deal
• Facebook allegedly crossed a line in buying up the competition
• These 2 FAANG leaders will drive the Nasdaq in 2021
• Here’s how world’s 10 richest made $1.5 trillion from COVID-19

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. Jamal Carnette, CFA has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Facebook. 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.

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The Rhythm Biosciences Ltd (ASX: RHY) share price is climbing today after the company was granted a United States patent for ColoSTAT. At the time of writing, the Rhythm share price is up 5% to 84 cents.

Rhythm develops and commercialises Australian medical diagnostics technology for sale in domestic and international markets. The company’s ColoSTAT is the first proposed product-in-development, intended to accurately test and detect the early stages of colorectal cancer.

New patent approval

In today’s release, Rhythm advised the US Patents and Trademarks Office (USPTO) has approved a patent for ColoSTAT biomarkers. The new grant covers 3 core biomarkers that form part of the ColoSTAT blood test. Additional biomarkers can be added to the core markers, if required.

In highlighting the positive announcement, the company noted that USPTO approved less than 35% of diagnostics patent applications.

Addressable market

Rhythm believes the authorised patent will strengthen its growth profile in the US. The current screening for people aged 50 to 74 years old is estimated to be around 94 million. And it could grow by a further 21% following the US Preventative Services Task Force’s recommendation to reduce the screening age to 45 years of age.

Nonetheless, this puts the company’s world-wide access close to 800 million people, when including other approved markets such as Australia, China, Japan, the United Kingdom and Europe.

CEO commentary

Rhythm CEO Glenn Gilbert welcomed the patent approval, saying:

The granting of this US patent further strengthens Rhythm’s global position as an emerging leader in the diagnosis of cancer, initially in the area of colorectal cancer.

The significance of this patent cannot be overstated, as it expands our access to a growing global market, and importantly, with ColoSTAT being a simple, low-cost option, means that we are in a position to access the mass market opportunity in each key country.

Having patent coverage in all the major global markets is a significant value-add for the Company.

Rhythm share price performance

The Rhythm share price has soared more than 500% higher in the past 12 months, reflecting the company’s aggressive expansion into new geographical markets.

More reading

• Why the Rhythm Biosciences (ASX:RHY) share price rocketed 28% to a record high
• These small cap ASX shares delivered more than 100% returns in November

Motley Fool contributor Aaron Teboneras 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.

The post The Rhythm (ASX:RHY) share price is surging 5% higher today. Here’s why. appeared first on The Motley Fool Australia.

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