Looking back at the news during the week, three stories in tech were some of the most interesting: the upcoming direct listing of Spotify's stock, Broadcom's (AVGO 0.87%) earnings, and Apple's (AAPL 0.29%) acquisition of texture.
Here's what investors should know.
Spotify sets a date to go public
Though the streaming music had previously filed an F-1 filing with the Securities and Exchange Commission (SEC), highlighting Spotify's intent to go public using a direct listing method, the company hadn't set an official date for its stock to go live on the New York Stock Exchange yet.
Image source: Spotify.
On Thursday, Spotify told investors it planned to go public on April 3 under the ticker symbol SPOT. Along with this announcement, investors also stressed Spotify's market leadership and its clear path to profitability. Management cited its narrowing operating losses as a percentage of revenue were as evidence of its improving business prospects.
Management also told investors it would provide full-year guidance on March 26.
Broadcom reports earnings and talks acquisitions
After garnering plenty of headlines last week amid a frenzy of merger and acquisition speculation, Broadcom's plans to takeover Qualcomm came to a sudden halt when President Trump issued an executive order blocking the deal, citing national-security concerns.
The executive order came just before Broadcom's earnings release for its first quarter of fiscal 2018. Beyond announcing a 29% year-over-year increase in revenue and a 42% year-over-year increase in non-GAAP operating income for the period, Broadcom CFO Thomas Krause said the semiconductor company's acquisition appetite is alive and well. "[W]e don't see this week's events putting any constraints on our ability to pursue acquisitions more broadly going forward," he said.
Broadcom said it would continue to aim to pay out 50% of its dividends in free cash flow and use the remaining free cash flow based on acquisitions, stock repurchases, or debt payments, depending on which of these areas looks poised to provide the highest returns on investments. But Krause emphasized that acquisitions currently look like the most attractive use of capital.
As you all know, Hock and I are quite familiar with the industry landscape and, sitting here today, we do see potential targets that are consistent with our proven business model and that also can drive returns well in excess of what we would otherwise achieve buying our own stock and/or paying down debt.
Apple acquires Texture
In a rare press release announcing one of its acquisitions, Apple said this week that it purchased Texture, a digital magazine subscription service. Texture is "the leading multi-tile subscription service" for magazines, according to Apple's press release this week. Eddy Cue, Apple's vice president of internet and software services, said that Texture will give Apple an "impressive catalog of magazines from many of the world's leading publishers."
The acquisition comes as the tech giant has been emphasizing the strong growth it is seeing in subscriptions. In Apple's most recent quarter, CEO Tim Cook said Apple's total paid subscriptions across its services offerings exceeded 240 million, up 30 million sequentially -- the largest quarterly growth Apple has ever seen.
