Promotion applications – does the S&P 500 delay the possibility of buying? News ad

Applevin NASDAQ: App There was one of the two very favorite shares over the recent past that the markets were dropped on June 9th. It was in response to news from S&P Global NYSE: SPGIThe field of financial services manages the most important market standard, the S&P 500 index.

For the markets of Plivine and Robinha Nasdak: KapkyushonThe investor’s disappointment was noticeable when they learned that the index would not add these names to its voters. Applevin finished the day down by 8%, while Robinhood fell by 2%.

These shares have been absolutely hot over the past two years, about 1840% and 697%, respectively, as of the closure of June 9, increased.

In an interesting turn, Applevin fell significantly on the same day Received a large update of the price targetThis renewal came from Morgan Stanley, which He raised his target from 420 to 460 dollars.

This new goal involves 20% of growth compared to the cost of closing shares on June 9. So, what negative consequences are used from -for its exclusion from the S&P 500? In addition, why did Morgan Stanley raise expectations, despite this situation?

Applovin cannot get the advantages of the S&P 500, but the possible inclusion is likely

When it comes to joining the S&P 500 index, the main advantage comes down to one thing: exposition. Given the importance of the index, inclusion in IT means that investors are more likely to learn about the company and invested in the company. This can significantly increase awareness among retail investors, which will lead to an increase in retail purchase and an increase in shares.

However, a much more important advantage It is an increased effect of institutional purchase. This is especially true among companies such as BlackRock NYSE: BLKState street NYSE: STTAnd the avant -garde, which Manage the world’s largest S&P 500 funds.

When new companies are included in S&P 500, These companies should buy shares So their funds are properly monitored by the index. The fact that Appleivin will not receive these advantages of the exposition when many thought that this led to a large fall in the shares. Nevertheless, this does not indicate a weakness in the Appleivin business.

However, S&P 500 will be Most likely, turn on the company at some pointThe field among almost 100 US shares with a market capitalization of more than 100 billion dollars Applevin is one of the two that are not in the S&P 500. The only other company that can say the same thing is a strategy NASDAQ: MSTRField

His business, controlled by bitcoins, most likely does not do any services with indexes. The strong segment of advertising technologies Applovin over the past 12 months brought more than 3.7 billion dollars. This contrasts sharply with the strategy business. Nevertheless, given the incredible growth of the action in a short period, it makes sense why S&P is careful in its approach.

Morgan Stanley sees the cost of Applovin grow after the sale of the game segment segment

Not all the news surrounding Applevin was bad on June 9. Increasing the price targeted price mass of Morgan Stanley may help to soften the blow that the shares inflicted. The target increase is associated with the bull, associated with the sale of the company of his game business.

Applevin’s Advertising technologies are focused on mobile gamesThe field helps the developers of games in raising downloads for their games. Nevertheless, Applovin also manages its own first (1P) mobile games.

This part of the business has declined, while his business advertising technological business takes off. Applovin announced a transaction for the sale of his business 1P in May. He expects that the sale will close in the second quarter in anticipation of the approval of regulatory authorities.

Morgan Stanley believes that the sale of this part of the business will increase the total value of Applovin. This is largely due to the fact that the Applovin 1P studios also use their advertising platform.

In fact, they pay the company that owns them. Even after the sale of these studios, they will probably continue to use the AD-Tech Platform Applovin. This will allow Applovin to continue to generate revenue from advertising with a high margin from these games, but he does not have to cover the cost of their operation.

This should benefit the field. Morgan Stanley reduced its income to the estimation of interest, taxes, depreciation and depreciation (EBITDA) per share. Nevertheless, they predict a higher amount of EBITDA, which, in their opinion, will give Applevin a higher overall assessment.

S&P Applovin S&P is probable; Morgan Stanley adds to bull views

Applovin can still Get membership in S&P 500Considering US shares with market capitalizations of more than $ 100 billion, given the field, it is likely that it will ultimately be. Morgan Stanley adds fuel to the fire of bullsPredicting the noticeable benefits of selling a business of 1P.

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