Amazon Inc. is in exclusive talks to snap up podcast startup Wondery, as the e-commerce giant pushes further into the growing audio music sector, the Wall Street Journal has learnt.
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The talks value Wondery at over $300 million, as the company is on track to boost sales to more than $40 million this year, with about 75% of that coming from advertising and the rest from licensing to TV, to subscription services like Audible and Stitcher Premium and to Wondery’s own premium subscription service, which launched this summer, according to the report. The talks with Amazon (AMZN) are ongoing and negotiations could still fall apart.
Closely held Wondery, which was launched in 2016, is the world’s largest, independent podcaster – and could present an opportunity for a major tech or media giant such as Amazon to make its foray into the exploding field. Wondery’s investors include venture-capital firms such as Waverley Capital, Lerer Hippeau Ventures, Greycroft Partners and Advancit Capital.
Amazon has been one of the top companies benefiting from the online shift in consumer preferences and spending habits as a result of the COVID-19 crisis. To capitalize on the trend, the tech giant has been looking to expand and broaden its remote and music services to gain more market share and enter into new markets.
Shares have been on a steady gaining streak, jumping a stellar 73% so far this year, with the average analyst price target of $3,819.89 implying an additional 19% upside potential is lying ahead in the coming 12 months.
Commenting on the upcoming holiday season, Truist Financial analyst Youssef Squali is “incrementally positive” on Amazon going into what the analyst forecasts called a “blockbuster” period driven by “outsized” growth in the US.
Squali, who reiterated a Buy rating on the stock with a $3,650 price target, expects US e-commerce to make up 42% of Amazon’s total gross merchandise volume versus 36% last year. The analyst reckons that Amazon will claim 42 cents of every $1 spent on e-commerce in North America.
In addition, the prospects for a “smoother” presidential transition and better outlook for fiscal 2021 coupled with the progress made on the launch of COVID-19 vaccines should help “dissipate the risk of major disruptions” and provide a catalyst for consumer spending, the analyst said.
Overall, AMZN scores a Strong Buy analyst consensus with 36 Buy ratings vs. only 1 Hold rating. (See Amazon stock analysis on TipRanks).
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