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Message
Is Twitter a buy?
Posted on 1/24/15 at 10:20 am
Posted on 1/24/15 at 10:20 am
I have been watching Twitter closely for the past 3 months and am considering buying and holding for 1 to 3 yeras. The price appears to be stabilizing around $40.
A quick summary of the facts.
1. Twitter has not made a profit since IPO, but is narrowing the gap between break even.
2. Twitter has not been growing user base as heavily as other social media such as Facebook or LinkedIn.
3. Twitter has diversified into other forms of social media that have great promise of heavy monetization through advertising and brand endorsements. For example Vine - a user generated video application for smartphones that is quickly creating numerous mega popular internet movie stars.
If you have kids in middle or high school ask them if they know who viner Nash Grier is. Most will say definitely yes! Nash's comedy is more popular with teens than Justin Bieber. There is probably a huge marketing potential here. Something like Nash does a $100k endorsement deal with Nike, and Twitter gets a percentage of the money.
If Twitter can monetize Vine and it's growing list of Vine stars, there is a huge potential to make extra cash even if their core "Tweeting" business stagnates.
4. Twitter has a lot of outreach to people without accounts - a hidden user base if you will. I don't have a Twitter account, but I can read most tweets and see all the ads. And so can you! Many of you have probably read tweets for news and sports updates. Facebook on the other hand will not display any content if one does not create an account and login. Facebook can only serve ads to its logged in user base. Twitter can serve ads to everyone.
The fundamentals are such that I would be buying the stock under speculation that
A. Investors are into social media and tech right now, and seem very willing to inflate stock prices even if the company has little or no profit. (Look at LinkedIn's ~800 P/E ratio!). They will continue to raise the price of Twitter over the next couple of years even if the company continues to post losses.
B. Twitter has potential to make bank with Vine if they execute a solid plan of collecting revenue from advertising and brand deals on the platform. If they do so they may turn a profit larger and sooner than expected. This improves the company's fundamentals and encourages more investing.
Would you buy shares for a 1 to 3 year investment window, or wait?
A quick summary of the facts.
1. Twitter has not made a profit since IPO, but is narrowing the gap between break even.
2. Twitter has not been growing user base as heavily as other social media such as Facebook or LinkedIn.
3. Twitter has diversified into other forms of social media that have great promise of heavy monetization through advertising and brand endorsements. For example Vine - a user generated video application for smartphones that is quickly creating numerous mega popular internet movie stars.
If you have kids in middle or high school ask them if they know who viner Nash Grier is. Most will say definitely yes! Nash's comedy is more popular with teens than Justin Bieber. There is probably a huge marketing potential here. Something like Nash does a $100k endorsement deal with Nike, and Twitter gets a percentage of the money.
If Twitter can monetize Vine and it's growing list of Vine stars, there is a huge potential to make extra cash even if their core "Tweeting" business stagnates.
4. Twitter has a lot of outreach to people without accounts - a hidden user base if you will. I don't have a Twitter account, but I can read most tweets and see all the ads. And so can you! Many of you have probably read tweets for news and sports updates. Facebook on the other hand will not display any content if one does not create an account and login. Facebook can only serve ads to its logged in user base. Twitter can serve ads to everyone.
The fundamentals are such that I would be buying the stock under speculation that
A. Investors are into social media and tech right now, and seem very willing to inflate stock prices even if the company has little or no profit. (Look at LinkedIn's ~800 P/E ratio!). They will continue to raise the price of Twitter over the next couple of years even if the company continues to post losses.
B. Twitter has potential to make bank with Vine if they execute a solid plan of collecting revenue from advertising and brand deals on the platform. If they do so they may turn a profit larger and sooner than expected. This improves the company's fundamentals and encourages more investing.
Would you buy shares for a 1 to 3 year investment window, or wait?
1
Posted on 1/24/15 at 11:09 am to fasdit
if you can do the following it's a definite buy:
1. Buy a controlling share
2. Stack the board in your favor
3. Become buddies with Mark Zuckerberg
4. Convince your new buddy to buy Twitter at a premium paid in Facebook shares.
If you can't do that I'd just buy Facebook shares.
1. Buy a controlling share
2. Stack the board in your favor
3. Become buddies with Mark Zuckerberg
4. Convince your new buddy to buy Twitter at a premium paid in Facebook shares.
If you can't do that I'd just buy Facebook shares.
Posted on 1/27/15 at 10:38 pm to Beerinthepocket
You seem to be suggesting that Twitter and Facebook cannot mutually exist as valuable social media companies?
Posted on 1/28/15 at 8:26 am to fasdit
Zuckerburg was able to raise the value of FB by loading the interface with ads. I am not sure how you would be able to do that with twitter. I just don't see the same growth potential in as FB had after its IPO.
Posted on 2/8/15 at 6:54 pm to AUCE05
Update
On Friday Twitter stock shot up 16% - one day after the release of quarterly earnings. Their revenue doubled from the previous quarter and substantially exceeded estimates. And most of the gains were from increased ad revenue.
What is more interesting from the report is that user base only grew 1.4% over the same time period. This contradicts the popular belief that social media can't increase revenue without proportional increases in users.
On Friday Twitter stock shot up 16% - one day after the release of quarterly earnings. Their revenue doubled from the previous quarter and substantially exceeded estimates. And most of the gains were from increased ad revenue.
What is more interesting from the report is that user base only grew 1.4% over the same time period. This contradicts the popular belief that social media can't increase revenue without proportional increases in users.
This post was edited on 2/8/15 at 6:58 pm
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