Category: Financial Services

Why finance is bullish on communicators

Financial institutions want to shed their cutthroat image for a more cuddly one. To do that, many are enlisting agencies or hiring in-house talent to manage external branding.

Driving the news: Edelman launched a boutique agency, Edelman Smithfield, to focus on reputation management for investment firms, private equity and venture capital funds, banks and crypto.

By the numbers: This is an extension of previous attempts to appear softer and more trustworthy — which is an uphill battle, according to Edelman’s 2022 Trust Barometer.

  • Of those surveyed, 56% distrust financial services and 70% believe the system only favors the rich.

What they’re saying: Edelman Smithfield CEO Lex Suvanto believes communications is an effective tool for companies to increase transparency by explaining their priorities and impact in communities.

  • “People don’t trust what they don’t understand, especially in the financial services industry,” Suvanto told Axios.
  • Christine Anderson, Blackstone’s head of corporate affairs, hopes better marketing can combat the “1990s and 1980s” stereotype of institutional investors and admits, “We probably haven’t done a good job of sharing good stories of how we operate our company.”

What we’re watching: Sharing positive stories isn’t the only selling point. The uptick in shareholder activism and macro shifts in innovation — paired with a volatile market — further support the need for strategic communicators.

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Spotify’s post-earnings surge an ‘overreaction’ amid lack of profitability: Analyst

Spotify (SPOT) surged on the heels of its Q2 earnings report with shares climbing more than 13% on Wednesday after the company reported a beat on both revenue and monthly active users.

But one analyst says the stock surge was an “overreaction” given the platform’s profitability struggles.

“While we believe there remains material user growth left for Spotify we highlight that many investors question whether Spotify will ever be able to generate significant lasting profitability,” Pivotal Research analyst Jeffrey Wlodarczak said in a new note.

The analyst added that the “concentrated power of the music labels & competition not necessarily focused on generating profitability” underscores that sentiment, explaining that, although he sees Spotify hitting its gross margin targets (30% to 35%) in the long term, the market is focused on short-term profitability as recession fears loom.

Wlodarczak reiterated his Hold rating on the stock, and lowered his price target from $110 a share to $105.

In addition to reporting a wider-than-expected loss in the second quarter, Spotify’s reported gross margins disappointed at 24.6%, missing estimates of 25.2% as the streamer spends big on non-music content.

Spotify has “been a public company for a while, and they’ve really never been profitable,” CFRA analyst John Freeman previously told Yahoo Finance.

He signaled that the platform’s sky-high costs for its podcast deals (which included a reported $200 million multi-year licensing contract with Joe Rogan) can only go so far.

“The problem with paying Joe Rogan, or whoever, a lot of money is that

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5 top after-hours movers on Yahoo Finance

Stocks rallied Wednesday afternoon, hitting the highs of the session after the Federal Reserve raised interest rates by 0.75% and Federal Reserve Chairman Jerome Powell signaled the central bank may slow the pace of its hiking cycle. The tech-heavy Nasdaq jumped 4% during the session, posting its best gain in more than two years.

Here are the top five trending tickers on Yahoo Finance:

Metas (META): The company reported second-quarter earnings after the bell Wednesday, missing Wall Street’s expectations on the top and bottom lines. Meta posted sales of $28.82 billion, its first ever year-over-year revenue decline. EPS of $2.46 was short of street’s expectations of $2.52. Facebook daily active users increased by 8 million to 1.97 billion, but Facebook monthly active users fell to 2.93 billion. Jefferies’ Brent Thill told Yahoo Finance that it is a ‘tough environment for ad-driven names’ and that it’s ‘impossible to forecast what Facebook is doing right now.’ The stock is down nearly 50% since the start of the year.

Qualcomm (QCOM): Qualcomm reported third-quarter earnings of adjusted EPS of $2.96 on revenue of $10.93 billion, beating the street’s expectations. Revenue guidance for the current quarter missed expectations, weighing on shares in after-hours trading. Moor Insights and Strategy Founder and CEO Patrick Moorhead told Yahoo Finance there was “a lot of good news in this release but the very important guidance piece is spooking investors, and that’s all about the consumer market.” Qualcomm also announced a 7-year extension of its patent licensing agreement with

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