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2
Posted on 11/8/13 at 8:39 am to barry
quote:
Growing revenues doesn't mean anything
Growing revenues means everything on an IPO. Thats why they raise cash.
Posted on 11/8/13 at 9:27 am to southernelite
quote:
Growing revenues means everything on an IPO. Thats why they raise cash.
Tech IPO's happen so the investors can cash out.
Posted on 11/8/13 at 9:45 am to barry
Theres nothing to cash out on unless they grow revenues, right? No one is going to invest in a company thats paying no dividend without expecting a revenue growth.
Posted on 11/8/13 at 9:47 am to barry
quote:
Growing revenues doesn't mean anything.
quote:
Just as likely as twitter.
Twitter already has margins over 60%. Show me some O&G margins.
Calling Twitter unprofitable is (and I hate to use this word) a bit ignorant. Twitter is easily self-sustainable. They are showing losses because they are intentionally spending more than they make on marketing and growth. Because, if the growth potential is there, why not?
Posted on 11/8/13 at 9:52 am to southernelite
quote:
Theres nothing to cash out on unless they grow revenues, right?
I think he is saying that now that they have IPO'd and the founders have millions upon millions of shares, they will begin liquidating right now while they can.
Posted on 11/8/13 at 10:58 am to Lsut81
They have 60% gross margins
Don't tell me that 100% of the cost of Sales, SGA, and R&D is related to growth.
My point is most companies, they make money selling goods or services at a certain margin then growth by selling more.
Twitter has to grow by figuring out how to make more money with the "assets"(users) it has. Yes they will grow their user base but it won't be anywhere in relation to what they need to grow their revenue and profits in relation to justify their 25 billion dollar market cap.
There users are already valued at higher than linkedin or facebook. So the market things there is more value there. I disagree.
I don't feel like what im saying, that tech ipo's are historically overvalued, is really out in left field.
Don't tell me that 100% of the cost of Sales, SGA, and R&D is related to growth.
My point is most companies, they make money selling goods or services at a certain margin then growth by selling more.
Twitter has to grow by figuring out how to make more money with the "assets"(users) it has. Yes they will grow their user base but it won't be anywhere in relation to what they need to grow their revenue and profits in relation to justify their 25 billion dollar market cap.
There users are already valued at higher than linkedin or facebook. So the market things there is more value there. I disagree.
I don't feel like what im saying, that tech ipo's are historically overvalued, is really out in left field.
This post was edited on 11/8/13 at 11:00 am
Posted on 11/8/13 at 5:38 pm to barry
Nice 7.24% drop in price today. 
Overnight millionaires dumping that crap.
Overnight millionaires dumping that crap.
Posted on 11/8/13 at 5:46 pm to fishfighter
You cant tell me there is not significant growth potential when FB has 500 million users and Twitter has a little over 100 million. I'm not advocating that Twitter is worth the price, because it's not, IMO, but there is significant growth potential in user base.
Posted on 11/8/13 at 6:34 pm to southernelite
quote:
but there is significant growth potential in user base.
Yes, there is, but so is putting everything on Red has a 50/50 chance to make you money.
Posted on 11/8/13 at 8:18 pm to fishfighter
quote:
Yes, there is, but so is putting everything on Red has a 50/50 chance to make you money.
come on, now.....
Posted on 11/8/13 at 8:22 pm to southernelite
quote:
come on, now.....
Really how I feel about tech companies.
I got burnt in 1999/2000 big time. Shame on me once, never again.
Posted on 11/8/13 at 9:07 pm to Korkstand
quote:
Twitter already has margins over 60%. Show me some O&G margins.
Calling Twitter unprofitable is (and I hate to use this word) a bit ignorant. Twitter is easily self-sustainable. They are showing losses because they are intentionally spending more than they make on marketing and growth. Because, if the growth potential is there, why not?
Twitter, right now is just like Amazon. I love Amazon. Literally I use it for just about everything I purchase outside of groceries. If there was a way for me to buy a car through Amazon I probably would.
However, I'm not the only one who feels that way, and thus the company is so overvalued right now it's not even funny. I read something the other day where Amazon would have to increase its revenue something insane like a hundred-fold to validate its stock price. There are alot of people who love Twitter to the same level, thus the insane overvaluing.
The same thing happened back in the day with IBM. They had a great product, but everyone knew it, computers were the wave of the future. You could have bought and hold IBM for next to a decade and never seem much change at all in your investment. The company, however, was strong, growing and turning profits each year, but these were unable to translate into gains for its shareholders due to the insane overvaluation of its stock.
And this is before we even get into the fact that anyone buying an IPO should stop investing immediately as they're only purchasing a speculative option that's always overvalued do to the instantaneous "have to have it now" nature of an IPO.
Posted on 11/8/13 at 9:54 pm to southernelite
quote:
You cant tell me there is not significant growth potential when FB has 500 million users and Twitter has a little over 100 million.
Twitter has 250 million active users already.
And no, twitter does not have the same mass appeal as facebook.
Posted on 11/8/13 at 11:42 pm to FootballNostradamus
quote:
I read something the other day where Amazon would have to increase its revenue something insane like a hundred-fold to validate its stock price.
No, Amazon's price/sales ratio is only 2.24. Compared to Wal-Mart at 0.53, or Costco at 0.51, it seems a little high, but not abnormally high considering Amazon is growing revenue at 20%+ and the other two are barely growing at all.
You might mean Amazon needs to increase its earnings 100 fold, which would be closer to the truth, but not nearly the insurmountable task it sounds to be. I have discussed this here before and won't go deep into it again, but basically Amazon is putting any and all would-be profits into growth, and will continue to do so for the foreseeable future. There is absolutely, positively no reason for Amazon to show a profit until their growth slows down, and in turn the growth investments slow down. Whether that will take 5, 10, or 20 years is anybody's guess, but there seems to be little reason Amazon can't get as big or bigger than Wal-Mart.
Actually, I just found the AMZN thread from April, and you posted in it. Realizing now I should have bought some at $260 in April when I was singing their praises.
Posted on 11/9/13 at 12:10 am to barry
quote:Yeah, it helps to look at gross margins when valuing high growth tech companies, because profit margins can be misleading. When the cost of the "goods" is low, you can get a good idea for what the eventual profits might be.
They have 60% gross margins
quote:
Don't tell me that 100% of the cost of Sales, SGA, and R&D is related to growth
No, probably half of it is though, which would put Twitter's profits in the neighborhood of FB and GOOG's once the growth starts to slow down to their levels. The biggest question is what will Twitter's growth curve look like.
quote:It's not out in left field, it is true, but the key word is "historically". The tech industry (and tech investors) have matured quite a bit over the last decade. The revenues are real, and the growth is real. But being "profitable" as such a young company isn't as big a concern as the "value investors" think it is. These companies don't have to figure out how to become profitable, they just have to decide when to become profitable.
I don't feel like what im saying, that tech ipo's are historically overvalued, is really out in left field.
That said, I have to agree that Twitter is probably overvalued by quite a bit at this point. I will have to watch it for another year or so to see if they maintain their revenue growth.
Posted on 11/9/13 at 12:16 am to Korkstand
quote:
You might mean Amazon needs to increase its earnings 100 fold, which would be closer to the truth, but not nearly the insurmountable task it sounds to be. I have discussed this here before and won't go deep into it again, but basically Amazon is putting any and all would-be profits into growth, and will continue to do so for the foreseeable future. There is absolutely, positively no reason for Amazon to show a profit until their growth slows down, and in turn the growth investments slow down. Whether that will take 5, 10, or 20 years is anybody's guess, but there seems to be little reason Amazon can't get as big or bigger than Wal-Mart.
Yea I know they're reinvesting everything, but it still seems too high for me unless they really start hitting the international markets (which they are now).
quote:
Actually, I just found the AMZN thread from April, and you posted in it. Realizing now I should have bought some at $260 in April when I was singing their praises.
Yea I remember that thread. I used to be extremely high on them, but upon further research I thought against investing in them.
I guess I was wrong hahaha.
Posted on 11/9/13 at 12:31 am to Korkstand
quote:
Actually, I just found the AMZN thread from April, and you posted in it. Realizing now I should have bought some at $260 in April when I was singing their praises.
They wouldn't have been a bad purchase at all, but the entire market is up at record highs right now so ~30% wouldn't be anything to run around naked about.
I have no doubt over the next couple of years Amazon will likely increase. My question for them is over the longhaul. I think they will either start to flatline a bit as far as their stock is concerned if they can't increase earnings to meet their crazy P/E ratio, or they will continue to grow, essentially revolutionize how we view online consuming and turn into the next Coke/Exxon as far as investments come.
I might throw a couple grand at them just because I love the company so much haha.
Posted on 11/9/13 at 12:37 am to FootballNostradamus
quote:
I might throw a couple grand at them just because I love the company so much haha.
I probably throw that much at them every year buying shite I don't need. Their stock has to be a better investment than that.
Posted on 11/9/13 at 4:38 am to Korkstand
quote:
I probably throw that much at them every year buying shite I don't need. Their stock has to be a better investment than that.
Exxxxxxactly!
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