Showing posts with label twitter. Show all posts
Showing posts with label twitter. Show all posts

Tuesday, December 17, 2013

Charts of the Day: Incredible Bubbles in Twitter and Moncler

FT Alphaville’s Paul Murphy has been horrified by the following charts which he calls as “this is nuts”.

Twitter….


Why?


Next, Italian skiwear maker Moncler a company that specialises in €1,000 jackets.



Why has Mr. Murphy been terrified with Moncler?


I would be running scared too…

Thursday, November 07, 2013

US IPO Mania: I’m just buying because everybody’s talking about Twitter

I have noted of the intensifying IPO rage in US stocks.

Well it appears that Twitter’s IPO embodies such mania.

Twitter has been priced at $26 per share and will be listed today. With a 70 million shares offered to the public, the firm will raise $1.82bn and place the company’s market capitalization at $14.2 billion.

Twitter’s $26 per has been significantly higher than the original estimated price range at $17-20 according to the Guardian. That’s a 30-50% premium!

Skeptics point to supply side problems of Twitter. Even with 87% shares under a “lock up period”, according to the Quartz, “about 10 million shares held by non-executive employees will be available for sale in February; the bulk of the rest will hit the market in May.”

Then there are stock options via restricted stock units (RSUs) where again the popular social media firm, according to Quartz  “has awarded large amounts of restricted stock to its employees, which vest after certain length of service and performance hurdles are met”

And there are also new issues after the IPO which has been estimated to add to the outstanding shares to 723 million

The Quartz raises a very important concern of supply relative to profitability: “The question is whether Twitter’s growth potential can outweigh the dilutive effect of more shares hitting the market. That’s anyone’s guess in a frothy market like this one; Twitter is an unprofitable company being valued at north of $15 billion, and Pinterest, which has yet to make any money, is valued at $4 billion.”

Hedge fund Andy Kessler writing at the Wall Street Journal pitches a buy for Twitter. Why?
This marks a new era for advertisers. The days are over of Mad Men figuring out how to cajole or trick us into buying products through mushy psychological profiling of demographic groups. The new model is going to mean including buyers and sellers in more transparent conversations about a product's pros and cons.
In short, This time is different.

While I share the idea that social media will bring about radical changes of business models, it is one thing to bank on hope (perhaps delusional hope) and it is another thing to see the new models transformed into financial feasibility.

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As pointed out above, Twitter’s new model hasn’t been profitable (yet). A table of Twitter’s financials as per the Zero Hedge

Well the zeitgeist of the US IPO mania as clearly revealed by this article from the Wall Street Journal Money Beat Blog: (hat tip Zero hedge) [bold mine]
Ms. Watkins said she plans to buy about 50 shares, which would add up to $1,250 plus any commissions if the stock prices at the top of its current price range, but could cost her more or less depending on what price she happens to get.

She said she’s not worried about price increases; she just wants to stick to her purchasing plan and buy the shares immediately, though she hasn’t ruled out selling them quickly if there’s a sharp bump.

Ms. Watkins said she’s interested in the hyped stock because of her economics-major nephew and because she knows what happened with Apple Inc. and Facebook Inc. prices and doesn’t want to miss out, even though the 140-character message service, often used on smartphones, is largely foreign to her.

“I don’t even use it,” she said. “You know what kind of phone I’ve got? A pre-paid!”

Ms. Watkins opened a TD Ameritrade account about four years ago, she said. She bought a few shares of stock in petroleum-related companies and was burned when the price fell through. She doesn’t trade now, relying on the mutual funds available through her employer to manage her nest egg.

The avid Mother Jones reader doesn’t really trust the market and says it’s like gambling, but with the addition of lies and subterfuge.

I’m just buying because everybody’s talking about Twitter,” she said. “I’m just gonna take a chance.”
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Price insensitive, momentum chasing, “doesn’t want to miss out” and “everybody’s talking about twitter” highlights on the FED’s easy money regime that has incited the bandwagon (herding) effect which has reflected on the syndromes of speculative orgies and the greater fool dynamics, all of which are manifestations of the euphoric phase of the stock market cycle.

As the legendary Jesse Livermore warned: (bold mine)
But the average man doesn't wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn't even wish to have to think. It is too much bother to have to count the money that he picks up from the ground.

Saturday, January 28, 2012

Twitter Yields to Selective Censorship

This is a sad development for social media: The popular Twitter has yielded to selective censorship

From New York Daily News,

Twitter service may be getting spotty in some countries.

The micro-blogging firm announced on the company blog Thursday that it plans to change its censorship policies to comply with different countries' regulations.

"As we continue to grow internationally, we will enter countries that have different ideas about the contours of freedom of expression," the post read. "Some differ so much from our ideas that we will not be able to exist there. Others are similar, but for historical or cultural reasons, restrict certain types of content, such as France or Germany, which ban pro-Nazi comment."

Users' tweets will be blocked in a country where they are against the law, but shown in nations where they are legal. For example, a pro-Nazi tweet may be scrubbed in Germany, but would appear on the user's account if read in the U.S.

When Twitter removes a comment, it says it will clearly mark when a Tweet has been censored and send it to the Chilling Effects Clearinghouse, which is creating a database of tweets deleted not only because of censorship but also as a result of cease-and-desist notices and copyright infringement.

Despite the setback, which I think is part of any struggle for change through attrition, I remain hopeful that internet freedom will prevail.

Saturday, August 13, 2011

More Endorsement for the Prudent Investor Newsletters

Businessmirror’s prolific financial columnist John Mangun tweets last August 10th,

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I hardly open my twitter, but had to discover this from another reader. Thus my late reaction.

Anyway, my profuse thanks, John.

Follow John Mangun's twitter address here