FTI Consulting News Bytes – 7th October 2022

This week’s news

TikTok’s turnover in Europe surged almost six-fold in 2021

2021 was an immense year for TikTok. As the world emerged from the pandemic, the social media platform showed no signs of slowing down, defying doubters that thought it was simply a lockdown fad. The Financial Times reports that the social media giant increased its European turnover nearly six-fold in 2021, reporting a turnover of more than $990m for the calendar year, compared to $172m the previous year. Its growth has been fuelled by its relentless user base which shows no signs of stopping to flourish, its increased ad spend, as well as improved targeting of ads aimed at users. Advertising amounted to more than $802m of if its annual turnover in Europe, an immense fivefold increase on the year before. Following in the footsteps of Instagram, TikTok has been experimenting with in-app ecommerce since 2021. ‘TikTok Shop’ is phenomenon like no other. Despite being hit by internal and external difficulties in the UK, it remains popular amongst gen-z users in particular, and the app now has its sights set on expanding to North America for the holiday season. However, despite its undeniable successes, TikTok’s losses were up by a third, largely due to increased spending on staff. But can we really expect anything less for a company growing at such a rapid rate?

Hyve gets its buzz back as events return after Covid

The Times reports that there is a renewed buzz at Hyve Group as the global business reports that its revenue increased to £122m from £22m previously in the year to the end of September. In its latest trading update, it reported strong bookings of £68m for the year ahead, up £18m at the same time last year. The post-pandemic buzz is back in full force, with Hyve hosting two leading events in September: the Autumn Fair in Birmingham and GroceryShop in Las Vegas. Elsewhere, Hyve has reached an agreement to sell its Turkish business for up to £8m to ICA, under its plan to focus on events in “advanced economies”.

Arm loses 40% of UK staff gained in SoftBank years

UK chip intellectual property designer Arm has shed 40% of the workforce it recruited as part of a pledge by its owner SoftBank to the UK government. When Japanese conglomerate SoftBank bought the company in 2016, it made a commitment to double the chip designer’s 1,770 British staff over the following five years. It succeeded, according to figures released by Arm, and by September last year, UK staff peaked at more than 3,500 of a global total of 6,950. Since then, the company has cut 18 per cent of its global workforce, with the UK taking a larger hit proportionally. The reduction was driven in part by management refocusing the business and exacerbated by an exodus of staff unsettled by uncertainty about the company’s future, according to former employees who spoke to the Financial Times.

Vodafone in talks for UK merger with Hutchison’s Three

Vodafone is in talks with CK Hutchison about merging their businesses in Britain to create a market leading mobile network that could accelerate the roll-out of 5G services and expand broadband availability. Reuters pointed out that combining Vodafone UK and Hutchison’s Three, Britain’s third and fourth largest networks respectively, would create a business with about 27 million mobile customers – more than current leaders BT’s EE and Virgin Media O2.

Elon Musk, Twitter and the mysterious X app

After the Elon X Twitter deal seemingly fell through, and was no longer to be, months later – the saga has resurfaced. In a short and succinct letter, Musk’s lawyers told Twitter’s, that he intended to buy the social media giant after all, reports BBC News. Meanwhile, Musk tweeted to his 107 million followers that he was creating “X, the everything app”. So, what is this elusive app, known only as ‘X’. It would seem we will have to continue to watch the story unfold, as Musk has shared nothing further. There is speculation that he has plans on launching a platform reminiscent of Chinese WeChat, a super app which incorporates a host of differing services ranging from messaging, social media and food orders. For now, the mystery continues.

Top Tweets of the Week

• Space X tweet a picture of Crew-5 ahead of the Falcon 9 launching them to the space station on October 5th.
• Elon Musk tweets: “buying Twitter is an accelerant to creating X, the everything app.”
• Fortune have 35-year old Canva founder, Melanie Perkins, as their cover star: “rejected by 100 VC’s, now she runs the most valuable start-up ever led by a woman.”

Number of the Week

300% – The theoretical premium Elon Musk is paying for Twitter.

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