The Twitter IPO stock chat discussion thread

[Mr. Crabs]

Why would you short TWTR?

Trying to short TWTR at 57.20s and got message No Shorting Allowed.

Who is able to sell/short this beast?

This market cap is too tight, not only can institutions buy up to $30B of this market cap easily, this ticker is internationally recognized and Twitter is something like the "cult classic of the internet" so non-professional individual speculators and investors will likely hold around $50B buying power which is HUGE!

If anything stick to buying TWTR bounces and shorting FB. FB is way overvalued AND overweight. Going long on FB's short-side sounds to me like a decent idea. When the market turns bearish FB is going to be among the stocks that get hit the hardest IMO. It's incredible the market cap got past $100B when this thing could be the next myspace. BY 2030 FB might not even be worth $1B... They will have to do major acquisitions if they want to stay alive just through the decade. Facebook by itself won't survive, Google and AAPL innovations can drive FB out of business.

 

[Mr. Crabs]

Overbought

This market cap is too tight, not only can institutions buy up to $30B of this market cap easily, this ticker is internationally recognized and Twitter is something like the "cult classic of the internet" so non-professional individual speculators and investors will likely hold around $50B buying power which is HUGE!

If anything stick to buying TWTR bounces and shorting FB. FB is way overvalued AND overweight. Going long on FB's short-side sounds to me like a decent idea. When the market turns bearish FB is going to be among the stocks that get hit the hardest IMO. It's incredible the market cap got past $100B when this thing could be the next myspace. BY 2030 FB might not even be worth $1B... They will have to do major acquisitions if they want to stay alive just through the decade. Facebook by itself won't survive, Google and AAPL innovations can drive FB out of business.

Peak near $75! Once again I find myself past far too conservative expectations. Big stock pulled off an impressive run.

 

[Mr. Crabs]

Found an article on TWTR company acquisiton

Peak near $75! Once again I find myself past far too conservative expectations. Big stock pulled off an impressive run.

Picked it up on Google Finance. About Twitter and its' acquisition of Vine, which I think is a great idea. Great thing about twitter is their main product is already a simple masterpiece, they don't really need to do much to continue growth. Vine I think is a great idea and has a lot of potential to grow without furthering the concept. Twitter has a nice corporate tag to go around acquiring whatever big online products they want, as long as they keep the acquisitions smaller than their original website which I don't think will be a difficult restraint to work with. Personally I think Twitter has longevity facebook does not. It's versatile and doesn't take the commitment facebook does... This is a big deal to me. So as facebooks mainstream user base dwindles into a tighter base of frequent cultish users twitter and its' more cultish userbase will become more mainstream. IMO twitter is just better for social networking... Facebook has a lot of features that are useless to the average person with a phone, vine and twitter. Facebook could be the next myspace flop, people seem to forget how similar both of those products are. So facebook to $1, twitter to $100 this decade. Twitter is simply a more adaptable and convenient product. Facebook could be the big dud of the S&P500, I would stick to shorting it intra-day. http://www.valuewalk.com/2013/12/twitter-inc-twtr-acquisitions/

All in all I think twitter has a lot of potential but it has essentially been recognized via the $73 price top we saw on the 26th. Now I don't see much reason to buy or invest outside intra-day breakouts until it sells to the point of being near over-sold. The stock is over priced relative to its' current profits and over bought in the respect that $35 billion is a lot of cash and 100% gains are a lot of percents. Institutions won't be stepping on each others heads to get in any longer, but they will step on each other to take an aggressive portion of profits. The notoriety of this ticker will give the bulls a lot to play with but I don't think the price can get much farther than it has considering the huge increase in the value of the stock supply. Limited upside after an impressive run on the new vehicle, the downside could impress as well, especially if stock market conditions turn less than favorable.

Back to some more hard estimates, bounces will have a hard time breaking further than 20%, looks like it's about time traders and investors tightened their belt when it comes to TWTR. Still a great vehicle, moved too far too fast. Might be wise for operators to take this back to $45 before pulling off another major run like this.

I think that's it for this thread, closing time.

 

[Atilla]

Peak near $75! Once again I find myself past far too conservative expectations. Big stock pulled off an impressive run.

Be interesting to see what they report for their earnings

 

[windsurfing_stew]

Currently TWTR has about 200M active accounts. It's market cap is $35,000M. This means that each active account is valued at $175.00. TWTR's current revenue is about $300M, ie about $1.50 per active account and their expenses are about -$500M, ie about -$2.50 per active account

Now clearly it's not going to stay that way forever.

TWTR is all the rage at the moment. How much popular can it get? There are about 6,000M people in the world. How many could start to actively use TWTR? Perhaps at most 1,000M. I mean, a baby, or a blind grandmother living in a rural community in China, are not likely to be inclined to tweet. Five times the current 200M would be surprising, and it is unlikely that the revenue would scale with the number of customers anyhow.

However let's consider that TWTR actually started taking 5x the revenue it is now but with still the same limited expenses. These are both wildly optimisitic (if not impossible) assumptions. It is hard to fathom anything more favourable than this! In this case TWTR would generate revenue of $7.50 and expenses of -$2.50 per active account. This is an earning of $5 per share and would amount to a PE of 175/7.5 = 23 at our most wildly optimistic.

My gut feeling is that TWTR is actually at its peak now. Maybe 'this is as good as it gets'. As time goes by, it may not be as exciting to talk about, or do business with TWTR. The future amount of revenue they take for selling their datagraph and any advertising IMHO probably won't get much more than two or three times last year's revenue. This amounts to a guesstimate earnings of say $3.50-2.50=$1.00 (assuming our constant -$2.50 expense per account). Of that they may pay half of that as a dividend. So, $175.00 seems like a large investment for something like $0.50 pa cash flow (until it goes to zero when the market finds something better).

Seems like a good company that is way overvalued. I like icecream too but not if it costs me $1,000! Anyone else think TWTR is a bit expensive!?

 

[windsurfing_stew]

This was my post. I've just realised my figures are out of date. Costs and revenues are about 2x to 3x larger now. Still, the thought remains the same.

Currently TWTR has about 200M active accounts. It's market cap is $35,000M. This means that each active account is valued at $175.00. TWTR's current revenue is about $300M, ie about $1.50 per active account and their expenses are about -$500M, ie about -$2.50 per active account

Now clearly it's not going to stay that way forever.

TWTR is all the rage at the moment. How much popular can it get? There are about 6,000M people in the world. How many could start to actively use TWTR? Perhaps at most 1,000M. I mean, a baby, or a blind grandmother living in a rural community in China, are not likely to be inclined to tweet. Five times the current 200M would be surprising, and it is unlikely that the revenue would scale with the number of customers anyhow.

However let's consider that TWTR actually started taking 5x the revenue it is now but with still the same limited expenses. These are both wildly optimisitic (if not impossible) assumptions. It is hard to fathom anything more favourable than this! In this case TWTR would generate revenue of $7.50 and expenses of -$2.50 per active account. This is an earning of $5 per share and would amount to a PE of 175/7.5 = 23 at our most wildly optimistic.

My gut feeling is that TWTR is actually at its peak now. Maybe 'this is as good as it gets'. As time goes by, it may not be as exciting to talk about, or do business with TWTR. The future amount of revenue they take for selling their datagraph and any advertising IMHO probably won't get much more than two or three times last year's revenue. This amounts to a guesstimate earnings of say $3.50-2.50=$1.00 (assuming our constant -$2.50 expense per account). Of that they may pay half of that as a dividend. So, $175.00 seems like a large investment for something like $0.50 pa cash flow (until it goes to zero when the market finds something better).

Seems like a good company that is way overvalued. I like icecream too but not if it costs me $1,000! Anyone else think TWTR is a bit expensive!?