Send me real-time posts from this site at my email
Motley Fool

Why Magnite Stock Surged Higher on Tuesday

What happened

Shares of ad-tech company Magnite (NASDAQ: MGNI) jumped on Tuesday, rising as much as 11%. As of 1:50 p.m. EDT today, the stock was up 9%.

The gain follows news that Walt Disney (NYSE: DIS), a major Magnite customer, is accelerating its efforts in streaming by creating a distinct unit focused on the distribution and monetization of its streaming content.

Image source: Getty Images.

So what

Magnite, which has an exclusive contract with Disney's Hulu to serve all of the major streaming platform's connected-TV ad inventory programmatically, could benefit from Disney's invigorated effort to distribute and monetize streaming content.

"The new Media and Entertainment Distribution group will be responsible for all monetization of content -- both distribution and ad sales -- and will oversee operations of the Company's streaming services," Disney said in a press release on Monday afternoon. "It will also have sole [profit and loss] accountability for Disney's media and entertainment businesses."

Hulu isn't Magnite's only customer under the Walt Disney umbrella. On Oct. 1, Disney launched Disney Hulu XP, a unified digital storefront that merges ad inventory from Hulu and Disney's TV networks. The new storefront is powered by Magnite, according to Beet.TV.

Now what

Magnite, which became the largest sell-side independent ad tech company after a merger of CTV-focused Telaria and scaled ad-tech company Rubicon Project earlier this year, saw its ad sales suffer during the peak of stay-at-home orders. But management guided for sequential improvement in its business as advertisers start opening up their wallets again for the tech company.

Investors will get to see how the company is faring when it reports its third-quarter results on Nov. 9.

10 stocks we like better than Magnite, Inc
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Magnite, Inc wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of September 24, 2020

Daniel Sparks owns shares of Magnite, Inc. The Motley Fool owns shares of and recommends Magnite, Inc and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney and short October 2020 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue