Bloomberg

In this article, Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management (MiM), 2021-2024) presents Bloomberg, which provides financial data, news and analytics for the financial community.
Bloomberg
Bloomberg is a company that provides financial data, news, and analytics to people in finance and other industries. The company was created to address the need for better financial data and analytics access in the business world. Bloomberg’s flagship product is the Bloomberg Terminal, a computer software system that provides real-time data on financial markets, economic indicators, and news.
Logo of Bloomberg
Source: Bloomberg
History
Bloomberg LP was founded in 1981 by Michael Bloomberg, a former investment banker who recognized the growing demand for reliable financial information and analytics. The company initially focused on developing and selling computer terminals that provided real-time data on stocks, bonds, and other financial instruments.
Bloomberg’s key innovation, Bloomberg Terminal, was introduced in the early 1980s. This groundbreaking platform revolutionized the way financial professionals accessed market data and news, offering a comprehensive toolset for trading, analysis, and research.
Over the years, Bloomberg expanded its offerings beyond terminals to include data analytics, financial software, and media services. Bloomberg News, launched in 1990, became a prominent source of business and financial journalism, providing timely news coverage and insightful analysis to subscribers worldwide.
In the 21st century, Bloomberg continued to innovate and diversify its business, introducing new products and services tailored to the evolving needs of the financial industry. The company expanded its global presence with offices in major financial centers across North America, Europe, Asia, and beyond.
Today, the company’s commitment to innovation, integrity, and excellence has solidified its position as a trusted partner for businesses, governments, and institutions seeking reliable financial information and insights.
Bloomberg has evolved since its introduction in 1981 and has grown the company from a single location to 176 locations and with 20000 employees. Bloomberg with over 40 years of history, facilitates bottom-up and top-down analysis to better assess potential growth and risk as well as future value across industry, sector, index, country, and region.
Bloomberg covers a wide range of firms across different industries, sectors, and regions. According to Chen (2023), Bloomberg grew to a leading financial company with over 325,000 subscriptions to its professional services, almost 1 million global circulations of Bloomberg Businessweek, and over 150 news bureaus internationally. To support this massive network of financial information, data encryption, messaging, and trading, Bloomberg employs over 4,000 computer engineers around the globe.
Key Components of Bloomberg
Earnings Estimates
Bloomberg provides estimates and forecasts about how companies will perform financially. It collects data from many sources and use it to predict things like earnings and revenue for different businesses.
According to Guttmann from Statista (2022), Bloomberg LP, which operates within the business of information services, news services, broadcasting, streaming, and print, generated an estimated 12.2 billion U.S. dollars. A year earlier, the company’s revenue results stood at 10 billion dollars.
Revenue Projections
Alongside earnings estimates, Bloomberg provides forecasts on how much revenue companies are expected to generate. This helps stakeholders analyze and project the growth and performance of businesses over specific periods.
For example, on June 01, 2023, Bloomberg Intelligence released an expected revenue projection on the AI industry for the next ten years stating “Rising demand for generative AI products could add about $280 billion of new software revenue and the Emerging Industry Could Grow at a CAGR of 42% Over the Next 10 Years”. This helps stakeholders of the respective industry to analyze, project, and invest accordingly.
Forecasts for Key Financial Metrics
Bloomberg’s platform includes forecasts for various important financial metrics beyond earnings and revenue, such as cash flow, profit margins, and growth rates. These forecasts assist in assessing the overall financial health and prospects of companies.
In April 2024, Bloomberg launched a point-in-time data solution that gives quants a competitive edge. By pre-ingesting, mapping, and linking many different data sources together, Bloomberg allows customers to significantly reduce the time needed to generate signals or insights. With this launch, Bloomberg is responding to customers’ need for differentiated, value-adding data with standardized company-level fundamentals, estimates, and deep industry-specific metrics, alongside macro information.
Coverage
Bloomberg covers a wide range of companies across different industries, from large corporations to smaller businesses. This extensive coverage ensures that users have access to comprehensive financial data and insights.
Bloomberg Markets maintains coverage of stocks, bonds, commodities, emerging markets, and forex markets from more than 160 countries. Bloomberg Politics holds the largest news agency in the world in US politics and major global events with more than 1000 reporters and staff. Bloomberg News publishes around 5000 stories daily.
Period
Bloomberg usually provides data with the longest available time period. For example, for Bitcoin data starts in 2010.
Frequency
The period and frequency of forecasts on Bloomberg vary based on user needs and market dynamics. Users can access real-time updates and forecasts as frequently as necessary to stay informed about market changes and company performance.
Bloomberg offers the only cloud-native real-time data delivery option suitable for capital markets use. It delivers B-PIPE through an intra-cloud connection to a managed virtual private cloud on Amazon Web Services (AWS) via AWS Private Link. This low-latency option provides speed, reliability, and security via connectivity that remains solely in AWS.
Pricing
The specific pricing for accessing Bloomberg data is mentioned on the Bloomberg website and it states to have categories like all-in access, limited access, and also has special student access for limited data. The cost likely varies based on the package and offerings selected, which can include different data sets, yearly or monthly subscriptions, and access methods. For detailed pricing information, it is recommended to directly go through the Bloomberg website as it includes very precise information that pretty much caters to all the needs based on the functionality.
Bloomberg charges a fee for its services, usually on a subscription basis. The cost can be high, but many financial professionals find it worth it for the valuable information they receive.
Use of Bloomberg by the Financial Community
Benchmark for Analysis
Professionals rely on Bloomberg’s extensive database of financial data, economic indicators, and market news to conduct in-depth analyses of companies, industries, and markets. The platform provides powerful tools and customizable features that enable users to create detailed financial models, perform comparative analysis, and track key performance metrics.
Market Expectations
Financial professionals use Bloomberg to stay informed about market expectations and sentiment. The platform aggregates market forecasts, including earnings estimates, revenue projections, and economic indicators, allowing users to assess consensus expectations and potential market trends. Bloomberg’s real-time updates and customizable alerts enable users to monitor shifts in market sentiment and adjust investment strategies accordingly.
Earnings Season Preparation
During earnings seasons, Bloomberg becomes an essential tool for financial professionals preparing for corporate earnings releases. The platform’s earnings analysis tools help users interpret financial results, identify underlying trends, and make informed decisions based on earnings reports.
Bloomberg and Tests of Market Efficiency
Academic works
Researchers and scholars leverage Bloomberg’s vast dataset and analytics tools to conduct empirical studies on market behavior, information dissemination, and the efficiency of asset pricing models. By analyzing historical market data and real-time information flow, academics assess the degree to which markets reflect all available information and efficiently incorporate new information into asset prices.
Information Dissemination
One key aspect of market efficiency is the speed and accuracy of information dissemination. Bloomberg facilitates the rapid dissemination of market news, economic data, and corporate announcements to a global audience of financial professionals. Researchers use Bloomberg to study how quickly information is incorporated into asset prices and whether markets efficiently reflect public and private information.
Pros and Cons
Given its history and operations in widely known industries and markets, we certainly need to know the pros and cons of Bloomberg.
Bloomberg provides users with access to extensive financial data and analytics, enabling rigorous empirical studies on market efficiency. Bloomberg’s customizable tools and advanced features facilitate complex analyses and modeling for testing various market efficiency hypotheses. The platform offers real-time updates and historical data, allowing researchers to analyze market behavior over different periods and market conditions.
On the other side, Bloomberg’s subscription costs may limit access to users with limited budgets or academic institutions with constrained resources. The complexity of Bloomberg’s interface and data structure may also present a learning curve for users new to the platform.
Conclusion
Bloomberg’s impact extends across the financial community, serving as a trusted resource for investors, traders, analysts, and corporate professionals worldwide.
Why should I be interested in this post?
According to me, mastering Bloomberg can equip management students with valuable skills and knowledge that are directly applicable to careers in finance, business analysis, and strategic management. It offers a practical way to enhance analytical capabilities, stay updated with industry trends, and build a strong foundation for future professional success.
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▶ Bijal GANDHI Earnings per share
Useful resources
BloombergWikipedia Bloomberg L.P.
Statista Estimated revenue generated by Bloomberg LP worldwide from 2015 to 2022
Bloomberg Generative AI to Become a $1.3 Trillion Market by 2032, Research Finds
Bloomberg Bloomberg Launches Point-in-Time Data Solution that Gives Quants a Competitive Edge
About the author
The article was written in May 2024 by Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management (MiM), 2021-2024).