Two Mergers and Acquisitions that
Could Shape the Market
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The market is witnessing two acquisitions th at shake their
respective sectors. It’s worth checking them out.
In online stock trading, it is always important to watch out for mergers and
acquisitions, since they can transform their respective stock performances and the
overall market behavior. Here are two major acquisitions that are set to transform their
Facebook and FacioMetrics
Let’s start with the news about Facebook ($FB) buying the FacioMetrics startup. There is
hardly any doubt as to what motivated Facebook to grab FacioMetrics. The latter is a
creator of advanced machine learning and computer vision algorithms aiding facial image
analysis. People using mobile apps are already familiar with the technology that runs in
various apps. Facebook wants to tap into that and incorporate such vi deo and photo
special effects in its user experience.
Facebook is looking to take a leaf from the success story of its social networking rival
Snapchat with its interactive chatting technology. FacioMetrics’ facial image technology
could ensure it gets to present strong competition to Snapcha t and other social media
platforms, p articularly among teenagers and young adults. Instagram h as admittedly
copied Snapchat for its Instagram Stories.
Facebook’s move appears to be a good one, and it could raise the game for other social
networks too. And let’s not forget, SnapChat has announced its planned IPO in 2017,
and $FB could be settin g the scene for tougher competition by that time. For its part,
FacioMetrics believes its acquisition will give it more opportunities for research.
Tesla and SolarCity to Finally Merge
Moving on to Elon Musk’s interests, SolarCity ($SCTY) and Tesla Motors ($TSLA)
shareholders have finally approved the former’s takeover by the latter. This was
something Tesla CEO and co-founder Elon Musk was pushing for. SolarCity is run by
Musk’s family, and Tesla was getting into innovative solar tiles for elegant solar roofing
in addition to its electric cars. Solar roofing and housing have been the realm of
SolarCity, and Musk wished to avoid any direct competition between $TSLA and $SCTY.
Now that both the companies would come under one roof, the potential for growth is
more. It bodes well for the renewable energy market since the acquisition gives Tesla
greater opportunities to innovate. It will make Tesla the first fully integrated sustainable
energy company i nvolving electric, solar and other forms of renewable an d sustainable
energy. And these technologies could significantly influence the way we live and do stuff.
The only question rema ining was whether the business model of SolarCity would add to
Tesla’s risk. But $TSLA i s only paying around $2 billion worth of its stock for the
acquisition and this ensures a good deal of risk mitigation. $SCTY has fallen around
60%from its trading value three years back.
For successful online stock trading , it’s worth keeping your eyes and ears open for more
such mergers and acquisitions that could turn out to be groundbreaking.