Category Archives: $TWTR

Snap vs Twitter update…what to do now prices have converged..

Last tweeted mid march that snap had short term downside and twitter short term upside..snap has fallen back to the ipo price and twitter has risen after a good quarter…the prices have now converged to around 17…

2centview fair value for SNAP now 24 including cash, if you value the earnings 2 years forward where analysts predict earnings to ramp up from 2019 TWTR fair value 16

No one knows which will succeed from here and become the next facebook, Snap has hugely creative product guy in Evan Spiegel and just signed a content delivery deal with Time Warner

Twitter has the president and signed a great deal with bloomberg – data is also a important asset as we move into the world of AI, their product is good but engagement is a problem

Own a small position in one of these name
2centview owns both at a price of 17 target 22…will add more if they drop to 14.

$TWTR vs $SNAP – which one should you buy?

$TWTR has managed to find its way back to $15 – a strong support level from which it has bounced back from many times. It seems to have been forgotten about following the SNAP IPO.

2CentView Fair Value now = $15 if you include the $3 cash on balance sheet.

SNAP – valued around $25bn – is expensive – but there is an expectation it grow users from its current 155m and a reach an important demographic – 15-25 – millennials! It is not expected to make money for a few years, but if they get their products right – they could become a Social Media heavy weight- the products they have developed show they know how to keep users’ engaged – which is key for advertisers.

So, TWTR is fairly valued to ‘cheepish’ and SNAP appears very expensive, and under pressure from FaceBook who is creating products in Instagram to compete with SNAP.

2CentView is TWTR has short term upside – they have been takeover target before, but a recent purchase of stock by Dorsey indicates they are not currently engaged with suitors – but the stock could find its way back to the $17-$18 area – with $20 being a price someone would pay. Long term, they need to figure out how to keep users engaged on their platform – they still have not figured this out.

SNAP has long term upside – but potential short term downside – the legendary investor TEPPER says he would buy at $17 – a break below $20, could see the stock drop back to the IPO price and then it would be a potential buy. Their first earnings report is key – they need to show they are not suffering too much from $FB competition.

So which should you buy? In this case, neither could be the answer – but if I had to make choice it would be $TWTR – figuring out how to keep users engaged cannot be that hard – a full time CEO Would help!

$TWTR – what now all the known buyers have dropped out…FV..

What is it about  Twitter that has seen all the buyers drop out?

It must be the price ! – even Google with all its cash and what seemed liked the best fit did not want to pay $20bn+ for the little bird

With Salesforce dropping out, the potential suitors are names like Verizon and AT&T who have been acquiring assets like Yahoo and AOL.

2CentView FV now $12.5 – as analysts slash forward estimates – discounting the prospects for significant growth.

A realistic take out price would therefore be around $16-$18 assuming a 1.5x multiple to fair value – Google may come back in when the price drops to this level.

Wait for Twitter to drop to around $14 [ the low it set in May 2016] before considering buying.

Twitter has to make it’s user interface more easy to use – I am still not sure how to send a direct message, or create a user group, block unwanted solicitations etc.

$TWTR – the buyer will be the company which can makes sense of the data ..that is..

Google! The Twitter data is actually very valuable – it is real time news and tell us what the planet is thinking now.

Google , which is making a big push into AI can use the data to make it’s search results more up to date – and apply AI techniques to the valuable data that Twitter has – this could be sold to advertisers.

2CentView predicts Google will finally buy Twitter. Salesforce, Disney are also in the frame.

The beaten down and back from the dead stocks…if only…

We look at beaten down stocks who trade at significant lower levels from their all-time high and as they subsequently recover, we think I wish I bought some Twitter at $15, GoPro at $11, FitBit at $12, Micron at $11 – all these good quality companies are now trading much higher than their lows – but still significantly lower than their all-time highs…

2CentView was fortunate enough to buy $FIT at $13, and is up over 30% with stock trading just below $17.

There are some common features in all these stocks

– They are all good quality companies with good management and positive earnings and healthy balance sheets

– They all traded at a base level for than a moth

– The 2CentView Fair value ranges from the base value to up to 75% higher than the base value. For example, my historical data shows for the past 3 months, $FIT (Fitbit) Fair value to be around $25 (including the CASH) with stock trading much lower and setting a base between $12 and $13. Similar pattern can be seen for GoPRO, Twitter and Micron.

So, will be sending out a tweet called the Beaten down and Back from Dead – with up to 4 stock ideas where returns can be significant if you they do come back. The criteria will be as follows:

– Trading at a base level for more than a month [bottomed out]

– Have at least 50% upside from the base

– A reason why it will come back e.g. Gopro launching a Drone + Hero 5

– Be a quality Company with good management and good balance sheet.

You should own one of the top 4 tech companies in the world (Google, FaceBook, Amazon or Google – 2CentView owns all 4), you should also look to own one of the beaten up and back from the dead – 2CentView owns $FIT!

$TWTR – buy before results tomorrow FV=$25 vs $17.2….

Twitter promised so much when it came to the market 2.5 years ago – but user growth has stalled and the stock has been trading in the $15-$17 range for the past 2 months.

2CentView fair value is now $25, if you include the $3 cash – this assumes EPS growth of around 28% over 5 years – which is in line with FaceBook and LinkedIn – in the past growth assumptions were in excess of 40%, but optimism about its growth prospects have faded, even though consensus analysts’ forecasts assumes there is still growth potential.

What has happened in the past 3 months to change that: not a lot really – an NFL Deal rallied the stock from $15 to $17- but the product has not changed much, Dorsey is still part time – although the SQUARE IPO is now done – he should have time to focus more time – but Twitter needs a full time CEO!

2CentView: No real reason for the earnings number to improve from last quarter – although the stock looks like it has little optimism priced in, the stock will probably continue to trade in the range $15-$17 for another quarter. If it breaks out above $18 maybe worth another look. Buy only if you believe there is something that drive earnings to grow at > 25% – which right now sure where that would come from – but the asset still does have significant potential.

2Centview does not have a position in $TWTR – closing out its position at $35 when Costello resigned.

$TWTR – what now for the little blue bird now Costolo has resigned….

Dick Costolo finally resigned last week as CEO of Twitter after months of intense media pressure about whether he will still be CEO at the end of the year… this pressure has really drained Costolo as he fought hard to improve products, but still no signs of MAU and monetisation growth…

The Conference call with Costolo and Dorsey on CNBC did NOT inspire confidence – Dorsey, did not seem to be that inspired and is more focussed on Square, which he is also CEO – the beard did’nt help either!
The initial price action of up 8% following the news was quickly erased to back to flat as it dawned on investors that nothing really will change at $TWTR for a while – in fact things could go into reverse!

FV on $TWTR = 36 includes $3 in Cash. [5Y implied growth = 40%]

Even at this price, Twitter is not a cheap stock – everyone views the products and property as having considerable potential…but realising the potential is not going to be straightforward…

2CentView is that, there is an equal risk Twitter to fall below the $35 support area as there is a potential buyer comes in and pays above $40 for the stock, so do NOT buy on the basis of a potential take over.
If you have a core position, decide whether you should hold and see who comes in as CEO – and whether the new CEO can meet the expectations of Wall Street OR Sell and wait and see what happens.

2CentView has sold it’s core position in $TWTR. The search for a new CEO will take time – in this time the stock could start drifting back to $30 …. will reevaluate once new CEO is appointed or the stock drops significantly. Always disappointing when a core position get’s sold as the real returns are made when core positions do well over a long holding period. Still holding a core position in $FB.

$TWTR(Twitter) looking to buy back the sale at $50 after botched earnings announcment…

Remember first day of trading of $FB and what a disaster that was!

Yesterday Twitter had a it’s own FaceBook moment when earnings were leaked before the close and the stock got killed on weak guidance, lower revenue numbers…

Last 2CentView trade recommendation was to buy at around 37, sell at 50 – where the valuation looks a bit stretched.

Pull back to $42 represents an opportunity to buy back the sale at $50 if you believe $TWTR can turns start to monetise and grow revenues.
It’s product set has definitely improved, and there is still no competition in it’s space.

2CentView FV=$40 which implies 40% growth valued 1 year forward, $3 of Cash.
Definitely buy on pull back below $38.

$TWTR – eps and revenue beat – its about the monetisation … time take profit.?

$TWTR announced results Thursday with an EPS and revenue beat – and what seemed lke disappointing MAU numvbers – the stock intially sold off, but then rallied 15%!

Twitter keeps getting compared to FaceBook – and investors seem obsessed with the growth in Monthly Active users – FaceBook having 1.5bn and Twitter 250mm.

2CentView has been that investors should focus on the monetization of the existing user base and look at Twitter for what it is and not compare with FaceBook.

$TWTR lets you express what you are thinking and doing now to anyone who wants to follow you -not what you have done recently and shared with Friends and allows you to feel connected to your favourite ( mainly famous ) people – and it is very important for sports and media starts to have a following! It is also the first place to go to find out what is happening as major news unfolds ..

Twitter is a great property and they have no competition – its user base may be not as high as FaceBook – but this does not mean it cannot become a $100 billion company – it may take some time though. Even greats like Google took time!

if you took a position on the trade recommended on Nov 23 2014, then your average price should be around 37 – look take profit at 50 but keep a core position.

2CentView took a trading position when the stock was at $35 – it was just too tempting at this price not to take a risk position with a company with such potential, and looking to sell a third around 50 – with the slghtly higher EPS forecasts post the results the stock trades on a 45% 5Y implied growth rate – so a lot is still expected from the stock – so lock in some profits and reduce your cost basis on the core position.

$TWTR – $40 level is holding, but is it a buy here?

$TWTR has had a recent roller coaster ride going from the low 30’s to 52 then back to 40 following the recent results.

The $40 price seems to be holding, even as S&P downgrades the debt (they have a convertible bond), senior executives depart and Costolo comes under fire.

2CentView is that $TWTR has huge potential, but monetizing and achieving user growth wall street expects is proving difficult – just like $FB, which went from $45 to $17 in the first year as public company as it’s strategy came into question.
$FB turned things around by focusing on a mobile strategy and making a smart purchase in Instagram.

What would be the growth strategy for Twitter? It is not so clear. Even at $40, the stock trades on a 50% implied growth over 5 years. Stocks like $TWTR and $GPRO trade on 50% implied growths because they want to be owned by growth funds as they have huge potential, but execution to achieve these expectations is not easy

You should own at least one Social stock – $FB, $TWTR or $LNKD (linked in). If you decide $TWTR is a stock to own apply the following strategy:

Buy 50% of your position here at $40 and add another 50% if it gets to $35, stop $28.
Wait for the next results and hope Costolo can execute – they also own MoPub a hosted mobile ad serving solution.

FV = 38 (assumes $3 cash) – this implies growth of around 50% over 5 years, which is line with consensus forecasts.

If $YHOO could buy $TWTR it could solve both their growth pains.

2CentView has a core position in $FB and is not planning to buy $TWTR at these levels.