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Shopify’s revenue rises in run-up to key holiday season; shares up

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Canadian e-commerce giant Shopify Inc reported a 46% rise in quarterly revenue as consumer spending “normalizes” after a year of a pandemic-fueled online shopping frenzy, sending its shares up 9%.

The widespread shift to e-commerce at the height of the pandemic had brought a wave of new business to Shopify, which provides infrastructure for retailers to set up their stores online and generates revenue mainly through subscriptions and merchant services.

However, on a call with analysts, Shopify executives flagged “pressures in supply chain” for the key holiday shopping season.

Companies across the globe have sounded alarm bells on supply issues that have pushed costs higher and made some products scarce.

Shopify raked in billions of dollars over the past year, growing quarterly revenue by over 90% in four of the last six quarters.

It has been able to maintain a healthy growth rate even as people stepped out of their homes and bigger rivals like Amazon.com Inc bolster their offerings to retain customers.

“The strength of Shopify’s flywheel was on display within the more normalized spending environment we saw this past quarter, as more merchants used more of our platform to start and grow their businesses,” said Shopify’s finance chief, Amy Shapero.

The company’s subscription solutions revenue jumped by 37% to $336.2 million in the quarter ended Sept. 30.

Analysts are optimistic about Shopify’s business model, which is driven primarily by mom-and-pop stores.

“Shopify was a high-growth company long before COVID, and it’s going to be a high-growth company after the pandemic tailwinds fade,” said Samad Samana, analyst at Jefferies.

The company’s total revenue was $1.12 billion, narrowly missing expectations of $1.14 billion, according to Refinitiv data. Its adjusted profit of 81 cents per share also came in below an estimate of $1.18.

(Reporting by Richard Rohan Francis and Eva Mathews in Bengaluru; Editing by Krishna Chandra Eluri, Saumyadeb Chakrabarty and Maju Samuel)

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Jack Dorsey: What's next for Twitter's co-founder? – BBC News

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Jack Dorsey

Jack Dorsey is one of Silicon Valley’s eccentrics.

If he was a character in a movie, you’d think he was too cliche.

Acutely earnest and idealistic, he passionately believes that tech can bring about global peace and prosperity.

He’s a kind of hippie libertarian, a philosophy that seems somewhat baffling at times. He also happens to be a genuine tech visionary.

His resignation from Twitter is the second time he’s left. After leaving the social media giant that he co-founded the first time, he setup the digital payments company Square in 2009 – which has become wildly successful.

He came back to Twitter in 2015.

Until Monday he was running both companies – a situation that didn’t sit well with many investors.

Last year Elliott Management, a large Twitter investor, tried to make him choose between the two. They wanted a chief executive that spent their time on Twitter and Twitter alone.

This in part explains why Twitter’s share price didn’t nose dive when their iconic leader suddenly resigned again.

There has been a prevailing attitude for a long time amongst investors that Twitter is leaving money on the table – that it could generate a lot more revenue from its large and engaged user base.

And certainly a chief executive that had its undivided focus on Twitter might help.

When you compare Twitter to Google or Facebook, it’s a relative minnow.

Dorsey has been seen by some as the reason for Twitter’s stunted growth. A Twitter purist, who had helped create the platform, but didn’t want monetization at the expense of user experience.

To be fair to Dorsey he has tried to experiment with ways to generate more revenue. He also announced a target of 315 million monetizable users by the end of 2023 – and to double revenue in that year.

Twitter has done well at adding users during the pandemic, however that target is hugely ambitious.

It’s a goal that incoming chief executive, Parag Agrawal will inherit.

Indian born, Agrawal has risen though the ranks to become an apparently competent and well-respected chief technology officer. He’s been described as a safe pair of hands, and he has a huge job ahead of him.

Agrawal instantly takes on Dorsey’s monetization headache. Twitter is not Facebook. It holds far less information about you, and therefore the data it holds isn’t as valuable to advertisers.

You can also only serve users so many adverts before they start turning away. If your goal is high growth but also revenue increase – that can be a difficult balancing act.

Obsession with cryptocurrencies

Dorsey had become obsessed with cryptocurrencies, and in particular Bitcoin.

He’d recently set up a dedicated crypto team – looking at ways in which the company embraces digital assets and decentralized apps.

The team was to sit under Agrawal – perhaps a sign that digital currencies will play a key role in the new chief executive’s vision for the company’s growth.

But Twitter has become deeply political in the US, and Agrawal also inherits its moderation problems.

Democrats generally argue that the platform hasn’t done enough to take down fake news. They also argue its systems are not good at quickly locating removing hate speech.

Republicans argue that the platform has an anti-conservative bias – demonstrated by the decision to ban Donald Trump after the Capitol Hill riots.

Agrawal has gone from relative obscurity to a major public figure overnight, and will no doubt be called in front of Congress sooner rather than later.

Already, a tweet that he published in 2010 – a quote from the Daily Show – is being used by some Conservatives as evidence that the new chief executive is left-leaning.

Dorsey’s goodbye email included a barb at founders who stay too long at the companies they created.

Jack Dorsey speaks on stage at the Bitcoin 2021 Convention

Getty Images

“There’s a lot of talk about the importance of a company being ‘founder-led’. Ultimately I believe that’s severely limiting and a single point of failure,” he wrote.

The target of that statement appeared to be Facebook founder Mark Zuckerberg (Elon Musk would agree with Dorsey, having said publicly he doesn’t like being Tesla’s boss).

But the sentiment has much wider importance. Almost all the eccentric tech founders who created hugely successful companies – Bill Gates, Jeff Bezos, Sergey Brin, Larry Page, Steve Jobs and now Dorsey – have all been replaced with ‘safe options’- chief executives that are nothing like their predecessors.

And perhaps Twitter needs that.

As for Dorsey, well he’s still young – 45. The last time he had some time away from Twitter he casually built up Square, that’s now worth $100bn.

Dorsey can at times be a figure of satire, but he’s earned the right to be taken seriously.

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Samsung to supply new advanced auto chip to Volkswagen

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Samsung Electronics on Tuesday revealed new auto chips targeting demand for advanced chips in cars, including one mounted in Volkswagen’s infotainment system developed by LG Electronics.

Demand is rising for “high-tech” automotive chips that can handle more entertainment consumption and increased electrical components in cars, Samsung said in a statement, saying that it plans to actively respond to the growing demand.

The chips, developed by Samsung’s logic chip design business System LSI, include a chip enabling 5G-based telecommunications for downloading high-definition video content during transit, and a power management chip for stable electricity supply.

A third chip, an infotainment processor that can control up to four displays and 12 cameras at once, has been mounted in Volkswagen’s high-performance computer called In Car Application Server (ICAS) 3.1, developed by LG Electronics’ vehicle components business, Samsung said.

Samsung and cross-town rival LG Electronics have both targeted the expansion of the global electric vehicle market and the rapid electrification of cars as opportunities to sell more high-tech chips and sophisticated components, analysts said.

 

(Reporting by Joyce Lee; Editing by Leslie Adler)

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Court finds Mazda Australia misled customers on refunds for faulty vehicles

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An Australian federal court has found that the local unit of Japanese automaker Mazda Motor Corp misled customers over their rights, the country’s competition regulator said on Tuesday.

The Australian Competition and Consumer Commission started court proceedings against Mazda in October 2019 in a case involving seven different Mazda vehicles and 10 customers.

It said the court found that Mazda made 49 separate false or misleading representations to nine consumers, who sought refund or replacement after facing serious and recurring faults with their vehicles within a year or two of purchase.

Mazda either ignored or rejected the claims of the customers and told them that the only available remedy was another repair, the ACCC said.

“Mazda’s conduct towards these consumers was not just appalling customer service as noted by the judge, it was a serious breach of the law,” ACCC Chair Rod Sims said in a statement.

Mazda Australia said it was carefully considering the federal court finding, but declined to comment further.

The court, however, dismissed the regulator’s allegations that Mazda engaged in “unconscionable conduct” in its dealings with these customers. It will decide on penalties and other orders sought by the ACCC at a later date.

 

(Reporting by Harish Sridharan in Bengaluru; Editing by Arun Koyyur)

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