WPP Shares Slide
The advertising giant said it has seen a slow start to the year thanks to Facebook and Google.
Editor’s Remarks: WPP’s CEO and founder Martin Sorrell said that 2017 was ‘not pretty’ for the group, as it battled for market share against tech giants Facebook and Google. Sorrell laid blame, however, squarely on “zero-based budgeters and activist investors” who are pushing for lower marketing spend in the wake of global economic uncertainty. Nevertheless, the figures are clear: 90% of new advertising money in the UK goes to Facebook and Google’s pay-per-click services. On the flipside, WPP reported a pre-tax profit rise of 7.7% but this did not stop its shares from sliding up to 13% on the news.
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UK Budget Target Hit
The UK now has a current budget surplus due to exceptional performance in the last six months.
Editor’s Remarks: Despite the oft-touted uncertainty prompted by the Brexit vote, Tory austerity policies have finally eliminated the UK’s current deficit. The target was set by former chancellor George Osborne – who now runs London’s Evening Standard newspaper – back in 2010 but many feel the country has paid a high price for it. The Labour Party is again calling for more borrowing and higher taxes to alleviate the present squeeze on public services. However, the latest figures have refuted the Treasury’s typically downbeat forecasts, which as recently as last October predicted a “bloodbath” in the nation’s finances.
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$1trn Investor Looks to Cryptos
Wellington Management is considering taking positions in digital currencies.
Editor’s Remarks: The firm has $1trn under management and stated in its February report that it is seriously considering buying into the cryptocurrency markets. Wellington has upgraded its trading systems to enable it traders to purchase bitcoin derivatives; the firm also said that has bought stakes in companies that are involved in the wider blockchain industry, including chipmakers. The announcement lends further credence to the feeling among retail crypto investors that it is only a matter of time until the space is flooded with institutional cash.
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Ed Sheeran Upends Music Industry
Despite the success of streaming services, Sheeran’s success highlights the role of record labels.
Editor’s Remarks: Warner Music Group’s efforts at promoting Ed Sheeran’s hit single “Shape of You” have paid off. The song has gone on to become the best-selling single of 2017, helped hugely by Warner’s decision to shun online streaming deals in favour of massive general release to the public. The move runs counter to how Drake and Taylor Swift have favoured Spotify and restricted distribution on YouTube in order to ramp up sales. While Spotify and its like are certainly changing the industry and breaking barriers for emerging artists, record labels clearly carry major clout.
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Clover Posts $22m Loss
The health insurance startup backed by Alphabet reported a smaller loss than previous years.
Editor’s Remarks: Clover Health is one of the US’ most highly valued health startups and has raised finance from some of the biggest venture capitalists in the nation, most recently at a valuation of $1.2bn. The $22m loss is significantly smaller than the $35m recorded the previous year, and the New Jersey-based company is in the process of rolling out its services to the wider US market. However, the US government recently downgraded Clover’s Medicare rating, which means it will receive less from the US government for some claims next year. The company’s CEO has reported he is reshaping the company’s strategy boost this rating in the years to come.
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