Twitter's Deal With The NBA, Netflix Pounded, Square Going To Europe? - Eye On Tech

| About: Netflix, Inc. (NFLX)

Summary

Twitter has a new deal with the NBA for streaming non-game content. Square could be setting up for overseas operations while Netflix dives 13% in Tuesday's session.

Rumors continue to swirl over the new Apple iPhone while the seemingly endless sale of Yahoo! draws one step closer.

Concerns rise over the cybersecurity within self-driving cars while Baidu faces questions from the Cyberspace Administration of China, as well as its investors.

Twitter Adds NBA to List of Streaming

The climb from the bottom has been a struggle for Twitter (NYSE:TWTR), shares of which are still down 20% on the year, despite rallying some 35% from its 52-week lows of $13.73.

Twitter can thank Microsoft's (NASDAQ:MSFT) acquisition of LinkedIn (NYSE:LNKD) from spurring the current rally - even if SunTrust analyst Bob Peck doesn't believe an acquisition is in store for the microblogging platform any time this year.

CEO Jack Dorsey isn't necessarily taking the "slow and steady" path, but he acknowledges that the needed changes will take time to implement. One of those strategies appears to be streaming content, this time with the NBA. Previously, Twitter had taken up deals with the NFL to stream games, but this deal will be somewhat different.

Twitter will stream non-game programming, which will include a pre-game show and a so far, unannounced other show as well.

While it's still unknown if Twitter's efforts in the video-streaming world will help boost MAUs, other companies, particularly Facebook (NASDAQ:FB), have high hopes for live video going forward.

Square Eyes Europe

Sticking with Jack Dorsey, let's focus on his other publicly-traded company, Square (NYSE:SQ). Currently, Square has operations in the U.S., Canada, Japan and Australia. But its recent incorporation of Britain-based Squareup Europe is a sign that the mobile payment solutions company could be eyeing operations across the pond as well.

Given that Research and Markets has forecasted for the mobile debit and credit card reading market to grow at a 70% clip until 2020, it's perhaps not surprising to see Square considering a move to Europe.

Squareup Europe has the ability to provide payment services within Britain and the European Union. However, because of the Brexit vote, it's not entirely clear how this will unfold in the future.

Netflix Has Its Worst Day of 2016, But Is It Over?

Shares of Netflix (NASDAQ:NFLX) tumbled on Tuesday, closing at $85.84, down 13.13% on the day. It marked the worst trading day of 2016 for the video-streaming giant.

But is the fall enough to slow the stock's decline? Shares are now down 25% on the year and worries persist over its ability to grow its user base, especially considering its valuation, at 266 times earnings.

Although Netflix topped earnings per share estimates and reported in-line revenue expectations, the company badly missed on subscriber estimates. The company expected to add 500,000 new subs in the U.S. this quarter, down nearly 50% from the 900,000 it added in the same period last year. Instead, Netflix added just 160,000 while international subscriber results of 1.5 million came in below the company's prior estimate of 2 million.

As a result, analysts are slashing their earnings estimates while Seeking Alpha contributors are out with a slew of new takes. We have Peak Netflix, No More Monopoly and Why It's A Good Buy.

But Maybe the Company Will Be Okay?

Although Netflix clearly got a big thumbs down from investors Tuesday - and really, it deserves it after missing so atrociously on subs growth - it does have some things going for it headed into the second half of 2016 and into 2017.

For one, the company announced early Monday that it would "be the exclusive streaming source for the new Star Trek series in 188 nations outside the U.S and Canada." Netflix also has its streaming partnership with Disney (NYSE:DIS) kicking in later this year too.

Adding to the content mix, but surely not enough to significantly soften the blow of Tuesday's selloff, Netflix also announced it will continue with the "Making a Murderer" series. The previous season garnered over 19 million viewers and the company is hoping to build on that momentum.

Will There Be an iPhone 7 Pro?

Apple (NASDAQ:AAPL) rumors are far from a rare thing these days, especially considering that the Silicon Valley giant has become larger, fiscally speaking, than many countries.

Some investors are focused on the company's upcoming earnings report on Tuesday, July 26th, but it already seems like the majority of the focus is on Apple's upcoming iPhone, due out in a few months.

Reports are now suggesting that there isn't going to be an iPhone Pro announced when the new lineup is introduced in September. Two code names, "Sonora" and "Dos Palos," indicate that a lacking third code name implies that the Pro isn't making the final cut. Or is that what it wants you to think?

Everything with Apple is a secret and we know this. Really, trying to guess what the company will unleash later this year is (mostly) a waste of time. Alas, we try. More popular rumors have included the removal of the headphone jack and an increase from 16GB to 32GB on the base model.

The Yahoo! Sale Will Happen, Eventually

There are reportedly just a few bidders left who may land the long-struggling tech company. Of the five remaining bidders from the final round - Verizon (NYSE:VZ), AT&T (NYSE:T), Quicken Loans founder Dan Gilbert, Vector Capital Management and private investment firm TPG - only a few will get a shot at securing Yahoo! (NASDAQ:YHOO).

Following Yahoo!'s Monday deadline, the company is expected to "request best and final offers from two or three of the bidders," according to Bloomberg.

Apparently, all bids came in above $4 billion, with the exception of Verizon's, which came in between $3.75 billion and $4 billion, because it's not looking to buy the company's real estate or its patents. That's part of what makes this sale even more time consuming, the fact that it's not an all-or-none approach.

Yahoo! is aiming to having a winner by the end of the month.

What's Really the Biggest Fear With Self-Driving Cars? (Hint: Not Crashing)

There's been a lot of concern raised over the recent unrolling of Tesla Motors' (NASDAQ:TSLA) Autopilot program. So much concern in fact that Germany is looking to bring black boxes to autonomous vehicles.

While crashing may be the top concern by consumers, it's not the number one worry for those in the industry. Instead it's - you guessed it - cybersecurity.

Munich Re, the world's second largest reinsurer, found that in 55% of survey respondents, corporate risk managers were most worried about the cybersecurity of autonomously-operated vehicles. Given that there is currently no definitive cybersecurity prevention for automated cars, this field is ripe for potential - and for danger.

Assigning liability between an autonomously-driven vehicle and human-driven vehicle was the second-largest concern among risk managers.

Baidu Faces Investigation Over Potential Gambling Promotions

Shares of Baidu (NASDAQ:BIDU) took a slight hit Tuesday, falling 2.2% after the Cyberspace Administration of China said it would launch a "strict investigation" into whether the Chinese search giant was used by illegal gambling sites to promote their operations.

Shares of Baidu have already been under pressure, stumbling more than 14% this year and roughly 36% from its highs made in late-2014, after the issues that arose from Baidu not disclosing its paid and non-paid-for search results. The new limitations weighed on the company's most recent guidance.

According to Baidu, the company is cooperating with authorities, but declined to comment publicly on the case. The CAC has said it will "handle any illegal behavior accordingly." Currently, Chinese search engines are to refrain from promoting these online gambling outfits.

Baidu Investors Have Questions Too

It's not just the Cyberspace Administration that has questions for Baidu, but its investors do as well.

The company's considered sale of video-streaming platform iQiyi.com to another group is considered "far too low" by Acacia Partners, a shareholder in the company. Perhaps making matters worse yet - or at least more questionable - is that this "group" trying to buy the video unit is being led by its Chairman Robin Li.

The hedge fund argues that the unit is worth $5.8 billion, more than double the $2.8 billion offer that was submitted by Li and Yu Gong, the latter of whom serves as the CEO of iQiyi.com.

Because it competes with Alibaba (NYSE:BABA) and Tencent (OTCPK:TCEHY), Baidu has made the case that the unit's rising costs are a hindrance to its bottom line. Still, it seems somewhat odd that, despite the rising costs, the company would want to exit the video space at a time where many others are looking to get involved. The Chinese online video market is also expected to triple by 2018, according to iResearch, making for another head-scratcher.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.