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Netflix does the splits

The video streaming company's shares rose more than 2% in extended trading after it approved a 7-for-1 stock split.

Paul Booth
By Paul Booth
Johannesburg, 29 Jun 2015

Netflix's planned stock split and a host of small IPOs were the main announcements of the international ICT market.

At home, WiseTech Global's acquisition of CompuClearing and the announcement by Orange regarding its first physical store in SA were the local highlights of a very quiet ICT week.

Key local news of the past week

* Very good year-end figures from Prescient, with revenue up 25.8% and profit up 113.6%.
* A negative trading update from Amecor.
* LexisNexis SA, part of the RELX Group, has agreed to purchase Korbitec from the Naspers Group. Korbitec is a leading provider of content-enabled workflow solutions for South African property professionals.
* Decision Inc. has acquired a majority shareholding in CQS Performance Solutions, one of the leading SAP budget, planning, and consolidation partners in Africa.
* WiseTech Global bought the shares of CompuClearing it doesn't already own (76.5%) for R177 million.
* Orange has opened its first physical store in SA (Cape Town).
* Renewed JSE cautionaries by Altron and Telkom SA.
* A withdrawn JSE cautionary by CompuClearing.
* The appointments of Juergen Dresel as CEO of Alaris Holdings (was interim CEO); and Wimpie van Rensburg as country manager for Riverbed South Africa.

Key African news

* The appointments of Gunter Engling as CEO of MTN Rwanda; and Ebenezer Asante as CEO of MTN Ghana (was CEO of MTN Rwanda).

Key international news

The video streaming company's shares rose more than 2% in extended trading after it approved a 7-for-1 stock split.

* Rogers Communications acquired Canada's struggling wireless carrier, Mobilicity, for over C$400 million.
* Sierra Wireless bought MobiquiThings, a European-focused MVNO specialising in providing machine-to-machine (M2M) connectivity.
* Vivendi made an additional investment in Telecom Italia, thus raising its stake to 14.9%.
* Google Ventures invested in two London-based start-ups, ie, Yieldify, a company that helps e-commerce businesses push potential customers to complete a purchase; and Lost My Name, a group that allows people to create personalised children's books and products over the Internet.
* Insight Venture Partners made an $84 million investment in Israeli cyber security company Checkmarx.
* A strategic partnership between IBM and Box that will combine the technologies and resources of both companies to transform work in the cloud. Together, the companies plan to integrate their existing products and services and develop new, innovative solutions targeted across industries and professions, ranging from medical teams working on complex cases to individuals negotiating consumer loans by mobile phone, to engineers and researchers identifying patterns in patents, reports and academic journals.
* A strategic partnership between Intelsat and OneWeb to build, deploy and operate a low earth orbit Ku-band satellite constellation. In addition, Intelsat has made a small investment in OneWeb.
* The following patent and lawsuit activity:
* The Internet Patents' Prism Technologies subsidiary won a $30 million jury verdict against Sprint regarding some patent infringements.
* Alibaba is selling 11 Main, its online marketplace that started only a year ago, to OpenSky, an online marketplace operator based in New York.
* SMIC will form a joint venture company with Qualcomm, Huawei Technologies Co, and Belgian chip research centre Imec to develop advanced 14-nanometer chips.
* Netflix is planning a 7:1 stock split.
* Mediocre quarterly results from Micron Technology.
* Mixed quarterly figures from Accenture, with revenue up (just) but profit down; Shaw Communications, with revenue up but profit down; and Synnex, with revenue down but profit up.
* Quarterly losses from BlackBerry.
* The appointment of Andy Chen as CEO of Tidal, the paid streaming music service acquired this year by rapper Jay Z.
* The resignation of Peter Tonstad, interim CEO of Tidal.
* The departure of Pawel Szymanski, CEO of Netia (Poland).
* A planned IPO in India from Matrix Cellular.
* A very good IPO on Nasdaq by Alarm.com, a cloud-based home and small-business security systems company.
* A good IPO on Nasdaq by AppFolio, a company that provides software designed to facilitate customer-business interactions to small and medium-size property management and legal businesses.
* A satisfactory IPO on the NYSE by Xactly, a cloud-based company that provides employee-incentive compensation and sale-management software.
* A good IPO on the LSE by Sophos, the UK-based cyber security company.

Research results and predictions

* South Africa:
* SA will have about 27 million Internet users by 2019, up from 15 million in 2014. At the same time, South African IP traffic will grow six-fold by 2019, a compound annual growth rate (CAGR) of 44%, according to the 10th annual Cisco Visual Networking Index (VNI) Forecast 2015.

* EMEA/Africa:
* After years of posting successive gains, the MEA tablet market recorded its first ever year-on-year decline in Q1 2015, with shipments to the region declining 5.8% to 3.83 million units, according to IDC. Samsung continued to lead the MEA tablet market in terms of shipments, despite suffering a decline of 5.5% year on year to total 920 000 units. Lenovo overtook Apple into second place for the first time, growing almost 96.4% year on year, after shipping 520 000 units. Third-placed Apple continued to suffer, posting a sharp decline of 43% to total 430 000 units. In fourth place, Huawei was the fastest growing major vendor in MEA, shipping 240 000 units for a 280.3% year-on-year growth rate.

* Worldwide:
* The total worldwide PC monitor market shipped more than 29 million units in 1Q15, a decrease of 12% compared to 1Q14 and 1.5% less than forecast, according to IDC.
* The worldwide integrated infrastructure and platforms market revenue increased 8.3% year over year to $2.1 billion during 1Q15, according to IDC. The market generated 945 petabytes of new storage capacity shipments during the quarter, which was up 45.7% compared to the same period a year ago.

Stock market changes

* JSE All share index: Up 1.7%
* Nasdaq: Down 0.7%
* NYSE (Dow): Down 0.4%
* S&P 500: Down 0.4%
* FTSE100: Up 0.6%
* Nikkei225: Up 2.7% (highest close for 18 years reached during the week)
* Hang Seng: Down 0.4%
* Shanghai: Down 6.4%
* Top SA share movements: AEEI (+7.3%), Altron (-14.1%), Datacentrix (-11.8%), Ellies (-12.5%), Labat Africa (+11.4%), Pinnacle (+7.4%) and Telkom SA (+15.2%)

Look out for

* International:
* The buy-out of Bouygues Telecom by Altice in a deal that could be worth EUR10 billion. Although immediately rejected by Bouygues, watch out for further developments.
* A buyout of Momo, a US traded Chinese company, from its CEO, Tang Yan.
* The acquisition of JT Global by Jersey Airtel, a joint venture between Bharti and Vodafone.

* South Africa:
* The possible sale of state-owned fibre-optic telecommunications infrastructure provider Broadband Infraco.

Final word

Regardless of a perception that Apple is the most innovative company because it files more patents than any other company, this is certainly not true so far this year. According to the United States Patent Office, the following are the top 40 companies regarding patents granted in the first five months of this year. From a technology perspective, the following are included in this list:

1. IBM: 3 059
2. Samsung: 3 052
3. Canon: 1 782
4. LG: 1 263
5. Google: 1 083
6. Sony: 1 074
7. Microsoft: 1 037
8. Qualcomm: 1 034
10. Panasonic: 896
11. Apple: 780
13. Intel: 711
14. Ricoh: 695
15. Seiko Epson: 625
16. TSMC: 620
18 Fujitsu: 570
20 HP: 531
21. Ericsson: 509
22. Brother: 486
23. BlackBerry: 461
24. Broadcom: 454
28. Sharp: 410
29. Hon Hai Precision Industry: 408
30. Amazon: 391
33. Micron Technology: 371
36. Cisco: 353
37. AT&T: 351
38. NEC: 336
40. SK Hynix: 323

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