Creators are Reawakening on Facebook’s New Monetization Platform
Facebook, traditionally home to our grandma’s hearty ‘likes’ and countless AI-generated accounts, is making a juicy proposition to content creators. For years, the platform has felt a little like a social media ghost town, but that might be changing. Facebook is consolidating its monetization programs into a more streamlined hub called the Facebook Content Monetization hub. This smart move will reward creators for their Reels, longer videos, photos, and text posts. With three clear monetization paths — in-stream ads, Ads on Reels, and performance bonuses — creators might find it easier to both understand and track their earnings. According to Meta, creators have collectively pocketed a whopping $2 billion on Facebook this year alone. Since introducing monetization options in 2017, Facebook has paid more than 4 million creators. Those are some enticing numbers, even if they still pale in comparison to YouTube’s enormous $70 billion payout over the last three years. However, some of Meta’s initiatives, like performance bonus programs, have proven less reliable. Initially, creators earned significantly from Reels, but bonuses have dwindled as Meta pivots to prioritize Threads. For now, the performance bonus program remains invite-only, but Facebook plans to extend invites to 1 million creators already monetizing on the platform, with open enrollment starting next year.
Poolside: An AI-Powered Revolution in Software Development
Poolside is making waves in the AI-powered software development ocean by securing a cool half-billion dollars in new capital. The Series B round was led by Bain Capital Ventures with participation from tech giants like eBay Ventures and Nvidia. This brings Poolside’s total fundraising to a jaw-dropping $626 million, and Bloomberg pegs the startup’s valuation at $3 billion. Founded only a year ago by CEO Jason Warner and Eiso Kant, Poolside is being hailed as a pioneer in AI models that help developers autocomplete code and suggest relevant snippets. Warner, previously the CTO of GitHub, knows a thing or two about AI assistants, having incubated GitHub’s Copilot. With Poolside owning 10,000 Nvidia GPUs for training future models, they’re poised for significant advancements in developer productivity. Despite growing concerns around AI in software development—like security and copyright issues—developer adoption is skyrocketing. Look at GitHub’s Copilot: over 1.8 million paying users and more than 50,000 business customers as of April. Encouraged by this trend, VCs are pouring money into AI coding startups. For instance, Magic secured $320 million, Cognition raised $175 million, and Codeium closed a $150 million funding round recently. VCs seem to be all in, and market projections from Polaris Market Research suggest the AI coding tools market could hit $27 billion by 2032. At this rate, companies like Poolside are sitting pretty.
Sirius XM’s Unique Stock-Split Strategy: A Long-Term Investment Opportunity
Among the parade of stock-split announcements marching down Wall Street, Sirius XM Holdings’ unique approach stands out. As the lone company to complete a reverse split this year, Sirius XM has baffled many but for good reasons. The satellite-radio operator opted for a 1-for-10 reverse split after merging with Liberty Media’s Sirius XM tracking stock, a move designed to attract institutional investors and fund managers by increasing share price. With Sirius XM, there is a level of cash flow predictability unparalleled by terrestrial and online radio competitors. Why? Because while others heavily depend on advertising, Sirius XM rakes in the majority of its revenue from subscriptions. During economic downturns, businesses cut advertising spend quicker than consumers cancel subscriptions, making Sirius XM’s revenue stream more resilient. Furthermore, Sirius XM’s valuations are highly compelling. Trading at just 7.5 times its estimated 2025 earnings per share, it’s a stark bargain. This multiple is the cheapest forward-year earnings since the company’s public debut in 1994. Investors seeking consistent returns would do well to consider this satellite-radio juggernaut.
David Tepper’s Big Call on Chinese Stocks
In the latest bout of market maneuvers, billionaire investor David Tepper made headlines by boldly backing Chinese equities. He likens the current conditions to his famous call during the “Tepper Rally,” citing the Chinese government’s sweeping stimulus measures as a key driver. Tepper believes that everything, from ETFs to futures, is worth buying. Alibaba (NYSE: BABA) is the crown jewel in Tepper’s $6.2 billion portfolio. Essentially the Amazon of China, Alibaba generates massive revenues from its e-commerce platform, cloud services, and AI advancements. Tepper’s second-largest position, PDD Holdings (NASDAQ: PDD), runs several commerce platforms including Pinduoduo and Temu. PDD’s innovative team purchase concept has proven very successful, driving strong growth. His interest in Baidu (NASDAQ: BIDU) aligns with the tech titan’s leading position in the Chinese AI space. Baidu recently launched a ChatGPT-like assistant named Ernie and runs the largest AI developer network in China. Given China’s potential for explosive growth and ongoing government support, Tepper’s vote of confidence in Chinese stocks is not one to overlook.
AI’s Impact on the Tech Investment Landscape: Billionaire Managers Buy Shopify and MercadoLibre
Even while Nvidia has captured much of the AI investment hype, some hedge fund managers are diversifying into other promising sectors like e-commerce. For instance, Ken Griffin at Citadel Advisors and Philippe Laffont at Coatue Management have snapped up shares of Shopify (NYSE: SHOP). Meanwhile, Steven Cohen at Point72 and Stanley Druckenmiller from Duquesne Family Office are making sizable investments in MercadoLibre (NASDAQ: MELI). Shopify’s platform offers an extensive suit of commerce tools, capturing 10% of U.S. retail e-commerce sales. Despite challenges, Shopify’s strong market position and innovative solutions make it a compelling investment for those with a long-term perspective. On the other hand, MercadoLibre continues to dominate Latin America’s e-commerce market. With an unmatched delivery network and a strong foothold in digital advertising and fintech, the company is accelerating growth across multiple revenue streams. Analysts are bullish about MercadoLibre’s future, and Wall Street expects its earnings to grow at an astounding 45% annually through 2025.
SoftBank’s Mega Investment in OpenAI and What It Means
Japan’s SoftBank is reportedly planning a monstrous $500 million investment in OpenAI’s latest funding round. This significant cash injection stems from SoftBank’s $100 billion Vision Fund and underscores OpenAI’s rapidly rising profile. This new round to raise $6.5 billion would push OpenAI’s valuation to a jaw-dropping $150 billion, making it one of the world’s most valuable startups. As CEO Sam Altman ambitiously predicts, AI superintelligence might be closer than we think. This fund infusion allows OpenAI to continue pioneering AI innovations, though it comes with substantial operational costs. According to recent documents, despite skyrocketing revenues, OpenAI is expected to incur losses around $5 billion in 2024. Altman’s vision touches various sectors like healthcare, education, and retail. Given OpenAI’s flagship projects like ChatGPT and its broader AI applications, this funding round is likely to usher in groundbreaking advancements, further solidifying OpenAI’s leadership in the AI landscape.