Line IPO Pops, Should Leave Facebook’s Zuckerberg Smiling — Tech Roundup

Line jumps more than 26% in its public debut, also boosting the value of Facebook's WhatsApp. Alphabet's Google gets hit with another E.U. antitrust charge.
By Bret Kenwell ,

The Japan-based Line (LN) - Get Report had what many would consider a successful first day of trading. After pricing at $32.84, the stock quickly jumped, ending the day at $41.53, good for a climb of 26.5%.

Previously, in late-June, the mobile-messaging company priced its IPO in the range of $26.30 to $31.17, which implied a valuation of up to $6.57 billion. Demand was strong, which boosted the price and then investors carried it even higher on the public market.

After Thursday's close at $41.53, the company is now valued at $7.27 billion. Line held its IPO in both Japan and New York.

So who's happy aside from those at Line? Well, Facebook (FB) - Get Report for one. The company that bought WhatsApp for roughly $22 billion in 2014 boasted 900 million monthly active users in April. 

(TheStreet's Eric Jhonsa does a great job breaking the two down, here).

For those that think WhatsApp growth could be slowing, think again, because that figure is up 50% from March of 2015. Based on Line's current valuation of $33.34 for each user ($8.6 billion market cap ÷ 218 million monthly active users), WhatsApp, if using a direct valuation comparison, is arguably worth more than $30 billion.

One could argue that WhatsApp is worth even more, considering its MAU growth is so far superior to that of Line. With or without the higher premium, it's good news for Facebook CEO Mark Zuckerberg & Co.

Shares of Facebook closed at $117.29 Thursday, up 0.4%.

Alphabet's (GOOGL) - Get Report Google got slapped with another antitrust charge from the European Union. Previously, the E.U. had alleged the tech titan favored its own shopping-comparison tools when using search, and also took issue with the use of its Android platform.

Now, the E.U. is taking a closer look at the company's use of ads. Specifically, the E.U. says the company has limited the "ability of its competitors to place search adverts on third-party websites, which stifles consumer choice and innovation," according Politico.

"Google's conduct, based on our evidence, is harmful to consumers," said Margrethe Vestager, the E.U.'s commissioner for competition, adding that, "Google's magnificent innovations don't give it the right to deny competitors the chance to innovate."

At this point, the lawsuit probably don't phase investors too much, evident by the fact that it's stock price moved higher Thursday despite the news. However, if all of the E.U.'s allegations come to fruition, Google could have a tougher time in Europe moving forward, which could hinder business.

Shares of Google closed at $735.80 Thursday, up 0.9%.

Amazon (AMZN) - Get Reporthas acquired Cloud9 for an undisclosed amount, as the company continues to build on the monumental momentum its Amazon Web Services business has amassed.

The San Francisco-based startup was actually the one to make the news public, when it stated the move on its website. From the site:

"We're excited to let you, our users and customers, be among the first to learn that we have been acquired by Amazon! We will be joining the Amazon Web Services family, and we're looking forward to working together on terrific customer offerings for the future."

The company's product allows remote teams and users to work together writing and editing code, and then testing that code on a vast number of different browsers and operating systems.

Given its capabilities -- and customers, some of which include Salesforce (CRM) - Get Report and Soundcloud -- this was a timely scoop by Amazon Web Services. The e-commerce juggernaut's cloud arm has boomed into a quickly-expanding growth opportunity that's been cheered by Wall Street.

Last year the service passed 1 million active users and boasted more than $7.8 billion in sales. Those sales were up almost 70% from the year prior. In Q4 2015 alone, the unit contributed $687 million in operation profit, up $240 million from the year prior.

According to USA Today, Amazon is the leader in cloud-based market share.

Amazon closed at $741.20 Thursday, down 0.2%.

Facebook and Alphabet are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB or GOOGL? Learn more now.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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