Twitter NYSE:TWTR

[rimmy2000]

Just a quickie today, TWITTER could break out soon, shown below on weekly.

Next point would be previous high c$25

[rimmy2000]

I have traded this share before, and made around 50-60% profit.

This stock gets 'traded' a lot and by that I mean many investors use options and, like I have previously, take advantage of the volatility in this share. You see this a lot on social media, if you look at traders in this stock, many are now looking to exit around $23.

 

Hence the stock price seems on a roller coaster and fluctuates, which is actually pretty easy to take advantage of (I am currently long TWTR on S/B and in a dealing account BTW)

 

But fundamentally, I think this share is under priced and am looking for a price of nearer $50-$60. Evidence of its lowly valuation include several rumors doing the rounds of a takeover. Twitter is a good solid business but has been struggling to monetize its platform, something echoed to me by a friend yesterday when I notified them of the 4-7% intraday price rise.

 

Whilst no direct comparator, the nearest we probably have is Facebook. Now here it gets interesting.

Facebook (FB) has a market valuation of $518bn as of yesterday (Google Home just told me that)

Meanwhile TWTR is valued at $16.8bn

 

Both are exceptionally strong and well known brands, right, and they do something similar, although not the same.

 

So let's quickly look at the Brand Values. Going to Interbrand and looking at the brand rankings of 2017, we see that FB is ranked #8 brand, but importantly has been assigned a brand value (that is to say, the material value of the logo alone) of $48.1bn dollars. Fourty-Eight BILLION DOLLARS. for the brand.

 

 

So according to this piece, the FB brand itself, bot the business, assets, IP or platform, but the logo, is worth about twice TWTRs entire business.

 

Anomaly. Go figure.

 

 

 

[rimmy2000]

Hello,

 

TWTR has finally broken out of the resistance and is up 8% early in the day. This takes it to a new 12 month high, See image below, compared to the image in the first post (above)

Looking intra-day, last week (highlighted and noted as 1.) TWTR also gained about 7-8% on the price, this seems to be due to the meeting that CEO Jack had with GS CEO Blankfein

 

http://uk.businessinsider.com/twitter-stock-price-goldman-sachs-lloyd-blankfein-takeover-speculation-2017-12

 

Below is intra-day,

I am sitting on a healthy gain here, my post above states how the trade is being handled.

 

GLA, rgds

[rimmy2000]

^ (same poster, have two accounts and oft' get muddled)

[rimmy2000]

Just posting as we approach Q4 and FY2017 earnings. See the tweet below:

 

 

That's all!

[rimmy2000]

takeover rumors from SalesForce $CRM

I'll leave this link here for anyone interested to read:

http://markets.businessinsider.com/news/stocks/twitter-stock-price-spikes-on-unconfirmed-takeover-rumor-2018-1-1014143834

 

 

Personally, I thin the story is really developing here. I bought some last week for a trade and sold on a 200 point move.

 

Am I the only one here on IG covering TWTR?

 

[phillo]

sure is a significant level 

[rimmy2000]

Twitter continues its reversal. up 81% on the lows reached last year, in April 17. There

has been more takeover talk. And citations of a potential $50bn valuation for TWTR if it carried the same EV/Rev. as $SNAP.

Still hold my shares.

[rimmy2000]

this caught my eye, $SNAP has responded positively to its own release and now is valued at more than TWTR. Really...

 

 

roll on tomorrow

[rimmy2000]

Well, I have been calling $TWTR for some time, and today I get alerted thus:

Twitter has broken from the $2x dollar mark.

 

This has proven an exceptional trade, I will make this my last comment on this thread. Hope its been useful to a few.

 

Best,

[phillo]

Well done

[rimmy2000]

There is not much to say on this one, other than it appears to be back in focus and perhaps re-rating. Note that the price seems to consolidate to form a flag/pennant shape then break upwards. Observers of TWTR would be wise to note this as it has occurred several times. The price consolidates and breaks out higher. I still hold my TWTR shares.

[rimmy2000]

New highs, closes up 7.3% today. I continue to keep hold of ALL my shares.

Nothing here further to add. Value is discovered in the end.

 

 

[Guest PandaFace]

I just don’t understand this play. Obviously it has worked out brilliantly for you, but looking at some of your other prominat posts you seem to look at the important factors of business, earning ratios etc.

 

I get the brand value at the start of the chat, but apart from that twitter seems pretty poor. Lack monitozation, lacks a good UI... no real tangable utility in the long run and dropping user figures.

 

Change my mind!

[rimmy2000]

So often investors feel they have to make their decisions on purely quantitative factors: looking at profits, EPS, ROCE, Op Margin, debt, current ratio etc etc. It is true a lot of my posts and decisions are indeed focussed on these more traditional metrics, trying to find classic anomalies.

 

Which is great for a lot of situations but not always required. For a start, a lot of tech stocks or growth stocks, these metrics don't become immediately relevant. One example of this would be Amazon. Amazon has never really made a signifiant profit. It has done this as a part of its strategy for growth and market penetration. And therefore if we waited for AMZN to declare a string of profits before investing then we would have missed a fantastic opportunity to benefit from the share price growth. 

Here we are are buying not into fundamentals, but more looking at the business model and the environment in which they operate. There are many models for looking at market strategy and positioning for example Porters Five Forces being one of them. But we also care about the fundamental direction of the markets of these businesses. Retail is moving online, and Amazon have benefited from this shift. Conversely Toys 'R' Us has felt the detriment to operating a traditional out of town business model.

 

In this theme, I would not say Twitter at all is poor. Quite stellar in fact. Too often the business has been berated because it is not showing profits (well, more recently it is) or because it is not successfully monetising its platform. And largely this is true, and the market has been disappointed on earnings releases and the share price duly plummeted. However what we do have is a business that pervades every aspect of our lives these days.

President Trump pumps out news on TWTR before the press agencies get the story.

Nearly every business runs a TWTR account and the twitter logo appears on pretty much all consumer products these days.

Companies setup social media departments to ensure they can handle the PR queries and outfall of their operations and consumers expect to be able to contact a company via Twitter and get an issue resolved.

Twitter is 'sticky' user growth is not amazing using the MAU metric (monthly average users) but people stick around, it is less 'faddish' than some of the other offerings.

TWTR has made its rightful place the destination for quality communications: eg. you can watch Question Tie and Dimbleby will refer to using TWTR to post questions and follow the debate.

 

I don't see this trend fading in the next 5 or so years. Comparators such as FB is possible, and I used this to look ate relative mcaps, but they are different beasts really, and there is scope for not just one winner as they serve different groups. So we can compare market caps, we can compare brand value and we can compare traditional metrics. The real point though is that the doom vi. TWTR is much over rated. The risk of a take out of this listed entity is real (esp when the s/p was depressed) and rumors have circled before, because the market cap is a drop in the ocean to a company like AAPL with $200bn BILLION in the bank.

 

I am not saying AAPL are a suitor, DIS have been mooted in the past, but the worth of the engagement, the stickiness of user, the steady growth and the perverseness , and the prospect of the data as well as the potential to refine opportunities for monetisation is enough for me.

 

I think in these situations the value will become known in good time.

 

[nherriot]

I've held twitter when they were at $15.

 

It's been a long time coming, but I think we will see some growth in the next 5 or so years.

Personally I see a drift from family and friends using less FB and more Twitter. This might be down to recent trends in geopolitical events where Twitter has been fantastic at broadcasting news as it happens.

 

Where as FB has slowly become a mine field of adverts and junk. This is now reflected in a decrease in time spent by users.

 

I'm sticking with Twitter! :-)

 

 

 

[rimmy2000]

Same here. News driven and price consolidating ahead of next market update 30th May.

 

Nothing else to add really, we wait.

 

https://investor.twitterinc.com/annual-meeting.cfm

 

[rimmy2000]

market update tomorrow.

[rimmy2000]

Today’s pre-market shows a breakout above $39. Happy days. Having a break in Lisbon.

[rimmy2000]

We are now through $45

[247trader]

looks like we've seen a price target rise to $53 for UBS on the back of the world cup. So looking at about a further 15% upside if that comes through. Can see it reached 47 but off a bit since. On a personal note I just don't get it ... I don't get the company, lack of profitability etc. I don't get the service or use it for that matter, and because I don't understand I won't be getting involved.

Trend is looking good tho and glad this played out well for ya.

Also the following from seeking apha: https://seekingalpha.com/article/4182119-twitters-recent-boom-beginning

 

[rimmy2000]

Thanks for this @247trader, again, I think the World Cup (ads) will convert positively here too.

[rimmy2000]

Here we go again..?

[Guest anders]

Wow, you've had some ride on Twitter, well done. The recent reporting over the suspension of ~70 million accounts seems to have been taken negatively by the market. I'd say from a user point of view this is very positive. Take a look at any tweet by Elon Musk and you'll find bots hard at work promoting scams in the replies. Importantly from an investor viewpoint, "most of the removed accounts weren't monthly active ones, since they had been inactive "for 30 days or more.", and so weren't counted in the important DAU or MAU metrics. I guess a key question is, how many is "most"?

Did this news affect your view or outlook of Twitter @rimmy2000 ?

[rimmy2000]

@anders Yes I did see something about suspension of bot accounts. For me, this is not a concern. If anything I agree with you that it will improve the quality of the platform. The main reaction would be possibly because  the MAU (monthly active users) statistic that Twitter is often assessed on, is impacted. But I think this will be a short term blip.

For me the biggest appeal still is that Twitter is a pure unadulterated source of primary breaking news. Years ago if people wanted news they would get it fro a radio or their newspaper. Now it is newspapers that rely on TWTR for their breaking stories!

[trade247]

From a longer terms perspective we're trading well above the 20 candle moving average on the weekly. This goes back to 2014 but I like to look at longer view points on this sort of stock. My Issues with this now is how many people are going to be profit taking after the world cup and everything happening there now its finished, along with the big run I can image we'll get a few shifts to 'neutral' in the analyst space.

 

[rimmy2000]

sad  face ?

I noted a couple of downgrades namely around the slow MAU growth on the platform and the increased capex for health initiatives (eg removing bots etc) 

Morgan STanley I believe reduced target from $50 to $45 but re-iterate buy.

My stance is the same. Continue to hold. 

[trade247]

1 minute ago, rimmy2000 said:

sad  face ?

I noted a couple of downgrades namely around the slow MAU growth on the platform and the increased capex for health initiatives (eg removing bots etc) 

Morgan STanley I believe reduced target from $50 to $45 but re-iterate buy.

My stance is the same. Continue to hold. 

given the sector pull back this is a strong hand to hold so good one on that. I think with trading patience is key, and if you have an understanding of the figures and belief in the product then I saw hold onto those convictions. It's tough tho, and whilst I don't agree with your stance I do like the grit.

Any revisions personally in regards to risk mitigation? pulling a stop up, taking some profit, changing the limit sell orders to be more staggered?

[rimmy2000]

yeah its not the obvious play, but I just think the platform is very entrenched in society now, and the market is not viewing the business in this context. So many examples of news reports being based upon tweets, I see FB as something that will wax and wane (we already know the demographic has changed skewed towards older users, and no longer fashionable by youth standard) but TWTR is offering something patently different, and succeeding in cementing its position as the news outlet.

I was on the earnings call and one interesting question was around the clean up of accounts, and how this may affect advertisers. The response was that advertisers are supportive of the account clean up exercise because it means their ads are getting to real users. 

Its just a buy and hold for me. No stops set, cofortably in profit and no top slicing.. No trouble sleeping at night when holding this one !

[rimmy2000]

There is not much to add here. Just waiting for the trade to play out. Meanwhile there is a research paper here with $52 target based on multiple of 2019 EV/EBITDA

https://citronresearch.com/wp-content/uploads/2018/08/TWTR-Just-Made-the-Turn-and-Is-Hitting-Stride.pdf

Seems reasonable, Citron have apparently called Twitter correct twice in the past, and I agree the drop based on the slight miss is unwarranted. Still have all my shares and initiated a long S/B on Mon 30th July.

Edited August 14, 2018 by rimmy2000