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Big tech and publishers face off; Verizon boosted by Warren Buffett's $8.6B bet


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Big tech and publishers face off; Verizon boosted by Warren Buffett's $8.6B bet

Simmering tensions between big tech and news publishers boiled over this week, weighing on Facebook Inc. shares. Meanwhile, business tycoon Warren Buffett grabbed headlines after revealing a multibillion-dollar stake in Verizon Communications Inc. while reducing his position in longtime favorite Apple Inc.

Both Facebook and Alphabet Inc.-owned Google LLC are pushing back on a proposed Australian law that would require the platforms to pay publishers for content distributed on their sites.

Facebook has taken the most decisive action against the proposed ruling so far, restricting Australian publishers and people from sharing or reading news content. The company noted Australia's new law "fundamentally misunderstands" the platform's relationship with news publishers that "willingly" use it to share their content. Google, meanwhile, recently threatened to discontinue its Search feature in Australia if the country proceeds with the law, though it took on a more conciliatory tone this week in announcing a three-year global news partnership with media conglomerate News Corp. News Corp. is owned by industry titan Rupert Murdoch and oversees publications such as The Wall Street Journal, Barron's and New York Post.

Ray Wang, principal analyst and founder at technology research and advisory firm Constellation Research, noted these latest developments further muddle the definition of journalism as more news content shifts from traditional outlets to social media sites.

"What's at stake is really the independent nature of journalism," Wang said in an interview. "And having that ... fourth estate that's keeping an eye on government and business and everything else — we've lost that because of social media."

Facebook stock closed Feb. 18 trading at $269.39, down 0.41% for the week to date. Alphabet rose half a percentage point over the same period.

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Meanwhile, shares in Verizon and Apple moved in opposite directions this week after Buffett's Berkshire Hathaway Inc. adjusted its stakes in both companies. Buffett, Berkshire's chairman, president and CEO, added to his company's holdings an $8.62 billion position in Verizon and $4.10 billion worth of Chevron Corp. during the fourth quarter of 2020, while trimming his Apple stake by about 6%, according to an SEC filing.

But Apple still ranks as the conglomerate's No. 1 stock holding. As of Dec. 31, 2020, Berkshire Hathaway held 887,135,554 Apple shares, worth $117.71 billion.

Verizon ended Feb. 18 trading at $56.98 per share, up 5.13% for the week to-date. Apple closed down 4.18%, at $129.71 per share.

In the retail space, Shopify Inc. stock stumbled after the Canadian e-commerce platform posted earnings that beat Wall Street's estimates but warned of slowing top-line growth in 2021.

Speaking on an earnings call to discuss Shopify's fourth-quarter 2020 earnings results, company CFO Amy Shapero noted the company continues to benefit from strong e-commerce tailwinds and increased interest in its platform amid the COVID-19 pandemic but expects the first quarter to "likely contribute the smallest share of full year revenue" and the fourth quarter to contribute the largest as the vaccine rolls out.

Despite the cautious outlook, Jefferies analyst Samad Samana raised his price target on Shopify shares to $1,673 from $1,375 while maintaining his "buy" rating. Samana noted the company's fourth-quarter 2020 results "capped off a stellar 2020, as revs/margins handily beat consensus." He forecast roughly 34% revenue growth in 2021, which he considers solid gains against tough year-over-year comparisons.

Shopify closed Feb. 18 down 4.87% for the week to-date.