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Logo for ZEE5, an over-the-top platform of Zee Entertainment Enterprises.

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Indian media conglomerate Zee Entertainment on Wednesday said it urged Sony to revive their blockbuster merger and has sued the Japanese tech giant over the deal’s termination.

Sony earlier this week called of the transaction with Zee Entertainment, which is reported to be worth $10 billion.

A major media presence in India, Zee owns several TV channels, a movie studio and a streaming service locally.

Sony is seeking a $90 million breakup fee from Zee over the collapsed merger, according to Zee, which said the company is pursuing this sum due to “alleged breaches by ZEEL [Zee Entertainment Enterprises Limited] of the terms of [merger cooperation agreement], invoking arbitration and seeking interim reliefs against ZEEL.”

In a filing, Zee said it denies that Sony is entitled to call off the merger agreement and that its claim for a termination fee is “legally untenable and has no basis whatsoever.”

Sony is “in default of their obligations to give effect to and implement the Scheme,” Zee said, adding that it calls on Sony to withdraw its termination and to confirm that it will respect its obligations by coming back to complete the deal.

Sony’s European representatives were not immediately available for a comment when contacted by CNBC on Wednesday.  

Zee was reportedly unable to seek a penalty fee over the deal termination, because of the time point when Sony called off the transaction.

On Wednesday, the Indian media firm said that it “categorically refutes all claims and assertions made by Culver Max and BEPL regarding alleged breaches of the MCA by the Company, including their claims for the termination fee, and reserves all its rights in this matter.”

The company said it is “evaluating all available options and basis the guidance received from the Board and will take all necessary steps to safeguard the long-term interests of its stakeholders, including by taking appropriate legal action.”

Zee has initiated legal action to contest Sony’s claims in arbitration proceedings to be held before the Singapore International Arbitration Center, the company said.

A merger of Zee with Sony’s India subsidiary, Culver Max Entertainment Pvt. Ltd., and its entity Bangla Entertainment Pvt. Ltd. (BEPL), would have created a potential content and entertainment powerhouse in the South Asian country.

Sony would have gained access to Zee’s local content, giving it a bigger footing in the lucrative Indian entertainment market. Zee, which faces intense competition at home from players like Disney and Reliance Industries, would have benefited from the backing of Sony.

Zee said its terms during the negotiations included the stepdown of CEO Punit Goenka and the appointment of a board director of the merged company.

— CNBC’s Arjun Kharpal contributed to this report.

Correction: India is a South Asian country. An earlier version misidentified it.

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Barry Diller calls timing of The Washington Post’s non-endorsement a ‘blunder’

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November 4, 2024

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Barry Diller calls timing of The Washington Post's non-endorsement a 'blunder'

Watch CNBC's full interview with IAC and Expedia chairman Barry Diller

To Barry Diller, a friend of Amazon founder Jeff Bezos, the decision for The Washington Post not to endorse a candidate in tomorrow’s presidential election was “absolutely principled” — and poorly timed, he said Monday on CNBC’s Squawk Box.

“They made a blunder — it should’ve happened months before, and it didn’t, and that’s the issue with it,” Diller said.

Diller is chairperson of both online travel company Expedia and IAC, which owns media platforms and websites like Dotdash Meredith and Care.com. He and Bezos appear to have been close friends for years, with Diller and his wife, fashion designer Diane von Furstenberg, hosting Bezos’s engagement party to fiancee Lauren Sanchez.

The decision not to endorse a presidential candidate in the 2024 race or for future presidential races came directly from Bezos, the paper’s owner, according to an article published by two of the Post’s own reporters.

The move prompted public condemnation from several staff writers, a flood of at least 250,000 digital subscription cancellations and the resignations of at least three editorial board members.

Bezos defended his position in his own op-ed late last month, calling the move a “meaningful step in the right direction” to restore low public trust in media and journalism.

“Presidential endorsements do nothing to tip the scales of an election,” Bezos wrote, emphasizing that the decision to not endorse a candidate was made “entirely internally” and without consulting either campaign. “I wish we had made the change earlier than we did, in a moment further from the election and the emotions around it.”

Diller said he spoke to Bezos following the decision.

“I think it was absolutely principled,” Diller said. “The mistake they made — and it was a mistake admitted by him — was timing.”

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AppLovin’s 300% surge in 2024 leaves ad-tech company with big expectations for earnings

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November 4, 2024

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AppLovin's 300% surge in 2024 leaves ad-tech company with big expectations for earnings

While Nvidia’s spectacular surge remains the biggest story in the technology industry, the AI chipmaker’s performance on the market has been dwarfed this year by a digital advertising company with a specialty in gaming.

AppLovin has soared 310% in 2024, beating every U.S. tech company with a market cap of at least $5 billion, according to FactSet data. Nvidia, which has led the artificial intelligence boom and become the world’s second-most valuable public company, is up 173% this year.

Founded 12 years ago, AppLovin went public in 2021, riding a Covid-era wave of excitement in online games. Now, the company’s games unit generates relatively slow growth, but its online ad business is bustling from advancements in AI that have improved ad targeting.

Great returns bring great expectations, and AppLovin has a lot to prove in its earnings report on Wednesday, as investors look for proof that the rally is warranted. In its third-quarter report, analysts are expecting revenue growth of 31% to $1.13 billion, according to LSEG, following two straight quarters of growth above 40%.

More than revenue, AppLovin has shown a massive increase in profit. Based on LSEG’s consensus, EPS is expected to more than triple to 92 cents, while analysts see operating income more than doubling to $424.2 million, according to FactSet.

AppLovin attributes much of its growth to its AI advertising engine called AXON, particularly since releasing the updated 2.0 version last year. The technology helps put more targeted ads on the mobile gaming apps the company owns, and works for other studios that license the software.

“AXON enhancements through ongoing self-learning and our dedicated development efforts have fueled robust business performance this quarter,” AppLovin said in its second-quarter shareholder letter in August. Revenue in the software business jumped 75% in the second quarter to $711 million, accounting for about two-thirds of total sales.

Analysts have gotten increasingly bullish.

Wells Fargo initiated AppLovin with the equivalent of a buy rating on Oct. 29, calling the company a share gainer. Analysts at BTIG lifted their price target last week to $202, the highest among firms tracked by FactSet. Oppenheimer, Stifel Nicolaus and Jefferies also raised their targets in October.

According to analysts at Wedbush, the ad opportunity in the mobile gaming industry will grow from $10 billion today to $50 billion over the next decade.

“Investors have bought into the story, driving APP shares to all-time highs, and we think that the rally is warranted,” Wedbush analysts wrote in a note on Oct. 11. They said the company’s “real opportunity” is to catch the influx in brand advertising towards mobile gaming from more conventional channels like social media or legacy broadcasting.

Because of its position in digital advertising, AppLovin faces potential competition from some of the most well-capitalized companies on the planet. In its latest annual filing, AppLovin named Google, Amazon and Facebook as competitors. The company also relies on a small set of mobile platforms, most notably from Apple and Google, for distribution.

AppLovin didn’t respond to a request for comment.

Among the biggest financial beneficiaries of AppLovin’s historic rally is founder and CEO Adam Foroughi, whose stake has soared to about $5 billion in value.

Things could’ve turned out very differently.

In September 2016, several years before the IPO, Foroughi agreed to sell a majority stake in AppLovin to Chinese investment firm Orient Hontai Capital in a deal valued at $1.4 billion. The transaction never materialized as the agreement came at a time when the U.S. government was clamping down on Chinese involvement in the domestic tech sector.

More recently, AppLovin was supposed to be on the other side of a deal that ultimately got scuttled. In 2022, AppLovin gave up on efforts to buy gaming software developer Unity Software for $20 billion, after Unity shareholders rejected the bid.

Unity has since struggled mightily, losing more than half its value. Over that same stretch, AppLovin’s market cap has ballooned by almost sixfold.

WATCH: AppLovin is ‘killing Unity’ says LightShed’s Brandon Ross

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SK Hynix rallies 6.5% after Nvidia boss Jensen Huang asks firm to expedite next-generation chip

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November 4, 2024

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SK Hynix rallies 6.5% after Nvidia boss Jensen Huang asks firm to expedite next-generation chip

Chey Tae-won, chairman of SK Group, during the SK AI Summit in Seoul, South Korea, on Monday, Nov. 4, 2024. SK Hynix is working with Nvidia to resolve the supply bottleneck, Chey said. 

Jean Chung | Bloomberg | Getty Images

Shares of SK Hynix rallied 6.5% on Monday after the business announced a next-generation memory chip and the parent company’s chair said that the South Korean semiconductor firm sped up the supply of a key product to Nvidia.

Speaking at the company’s event on Monday, Chey Tae-won, chair of SK Group, ran through an anecdote in which he said Nvidia CEO Jensen Huang asked him if SK Hynix could move the supply of high-bandwidth memory (HBM) chips called HBM4 forward by six months. SK Hynix’s CEO at the time said it was possible to do so, according to Chey.

It’s unclear if this will shift SK Hynix’s production timeline from the previously-announced second-half of 2025.

High-bandwidth memory is a key component of Nvidia’s chips, which are in turn used to train huge artificial intelligence models. Tech giants around the world have been snapping up Nvidia chips in a bid to produce the most powerful models and applications.

SK Hynix is a key supplier to Nvidia, and the huge demand for the American company’s products has helped the South Korean firm to achieve rapid growth this year and record profits.

SK Hynix shares are up around 36% this year.

On Monday, the company also announced a new product that helped support its share price rally. Samples of the chip — a 16-layer HBM — will be provided to customers in early 2025, SK Hynix said.

HBM is a type of dynamic random access memory, known as DRAM, where chips are vertically stacked to save space and reduce power consumption. Adding more layers to a HBM will, in theory, give it more capacity to handle complex AI applications.

The aggressive roadmap from SK Hynix comes as its closest rival Samsung, which has fallen behind in HBM, tries to stage a comeback and get its most advanced chips certified for use by Nvidia.

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