After-Hours News: Disney Prepares to Close on Fox Deal; Tencent Music Reports Earnings
Entertainment giant Walt Disney (NYSE: DIS) and Chinese music entertainment platform Tencent Music (NYSE: TME) are making headlines during after-hours trading on Tuesday.
- Walt Disney is set to complete its $71 billion acquisition of Twenty-First Century Fox (NASDAQ: FOXA) (NASDAQ: FOX) assets late tonight.
- Tencent Music (TME) revealed rapid growth in its fourth quarter.
Walt Disney to close its acquisition of Fox
In an announcement after the market closed on Tuesday, Disney said its acquisition of Twenty-First Century Fox assets, including the film production businesses, television creative units, Fox's interests in Hulu, and more, will close at 12:02 a.m. EDT tomorrow.
"Unprecedented collection of high-quality creative content, stellar talent, and cutting-edge technologies will enable Disney to accelerate its direct-to-consumer strategy and expand its global presence," the company said in the press release.
"This is an extraordinary and historic moment for us -- one that will create significant long-term value for our company and our shareholders," added Disney CEO Robert Iger.
New content and distribution acquired through this merger will help Disney expand its direct-to-consumer businesses: ESPN+ and its upcoming Disney+ streaming service. Management has touted these new streaming platforms as central to the company's evolution to a multiscreen, internet-connected environment. The company's larger stake in Hulu will also be key to the company's evolution, as Disney will now have a controlling interest in the streaming-TV service.
Tencent Music sees rapid growth
In its first reported quarter as a publicly traded company, Tencent said fourth-quarter revenue surged 50.5% to 5.4 billion renminbi (RMB), or the equivalent of $785 million. The company's net loss for the period was $127 million, but management said this was primarily due to a one-time $221 million "share-based accounting charge related to the Company's equity issuance to Warner Music Group and Sony Music Entertainment."
Mobile monthly active users for the company's online music service increased 6.8% year over year. But paying monthly active users grew even faster, rising 39.2% year over year. This put paying users at the end of the quarter at 27 million, or 4% of Tencent's 644 million mobile monthly active users.
The company's mobile monthly active social entertainment users, or users who have accessed one of TME's singing or live-streaming services, were up 9.1% year over year, hitting 228 million.
"During the fourth quarter of 2018, we recorded strong growth across our business lines, including both online music and social entertainment services, and solidified our market leadership," said Tencent Music CEO Cussion Kar Shun Pang.
Investors apparently had higher expectations for TME's fourth quarter. Shares are down 7.2% in after-hours trading as of 7:30 p.m. EDT.
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