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Tuesday, May 26, 2015

Thoughts on $twtr and Flipboard

Lots of negative chatter after the leak. But the opinions of the talking heads are quite irrelevant. Anthony Noto knows markets. 

Today's leak was a feeler into market opinion. Judging by the market reaction, it didn't really care about the deal. (Although twtr acted far better than the rest of the market.)

I am a fan of this deal. A billion for this deal maybe a bit much but I really like the potential that Flipboard can offer. 

Right now Flipboard is a magazine designed for consumption. It's a good tool for those who don't like the complexity of Twitter. In the context of a digital magazine, Flipboard may not be worth $1B. (I mean Yahoo is the ultimate in user eyeballs, yet the market has negative value on the "magazine" potential.)

But what if we looked at Flipboard differently. What if Flipboard is viewed as a potential on-boarding to Twitter. (A Pinterest like version of Twitter for the millions of people that use Twitter as a media consumption / communication medium, and not a broadcast medium.) in this context, and assuming Twitter management (and team) has the vision, the deal is very much worth $1B.

twtr is still in the shitter, but this deal is not about "doing something". The potential for Flipboard is obvious. And the team they hire have the ability to do the job.


Tuesday, May 19, 2015

$yhoo back to $baba correlation?

After the baba ipo, yhoo slowly started to hold more value per baba share, effectively removing a lot of the baba correlation.


The white space between the red-and-candle stick chart started to diverge, near late November, before the tax friendly deal was announced. 

After baba shares collapsed after the Q4 results, the strength of yhoo vs baba was fairly obvious.  Yahoo's revenue started to stabilize, and grew yr-yr last quarter. IMO, the rise in value of yhoo vs baba was reflecting this. (And at times, observing the chatter, I felt like the lone supporter to the core biz.)

Today the gap was removed apparently  thanks to a comment by an IRS official that the spinoff rule *may* change. (Emphasis on the word "may". And I guess the right people were in this conference that they told enough people about this turn of potential events that yahoo became one of the most actively traded stocks 15 minutes prior to the market close. Go figure. Anyone think the SEC has authority over the IRS? Surely yahoo want the only stock affected by the comments.)

Regardless of the extra billions in tax savings from SpinCo, yahoo strategy remains and so long as there is consistent revenue growth, the core business will appreciate in value. The other tail wind is baba itself. As it appreciates from here, so will yhoo. 

Charts $bac $amzn $trxc

bac ready for low 17s to form the long term head and shoulders. 


amzn looks to want to retest 418-419.


trxc keeps teasing the weekly 200sma breakout. Breakout would be nice or a push back to 3.19-3.30 would be just as nice.








Wednesday, May 6, 2015

Market Thought... Yellen $spy is high

Equity markets are so high they are chillen with Towelie. (Youtube towelie best moment)

Trailing multiple is fairly high, but for the last few months the market did not care. Now its May, and the excuse to sell and go away comes from Yellen yelling the markets are too high! If earnings are to come in as expected, and multiple to remain relatively elevated, this still justifies an SP500 closer to 2000 than 2100.


But we know China is stimulating, as is the ROW. 2000 is not out of reach, but I would prefer to cover the spy put protection near 2040.



Special note: selling bac with the rest of the tide is stupid. Seriously, its dumb. BAC is benefiting from the higher treasury market rates. The stock is a hedge to an equities market rebalancing as easing is removed. The higher rates will give it better earnings, allowing for high-end book value to be realized.

Tuesday, May 5, 2015

Charts $fb $amzn $bac $ibm $trxc

FB - if market weakness persists a flush to the 50sma can be expected.


AMZN - holding strong through out the day, except for the last few minutes. Want to enter near 410-418.
 

BAC - daily broke out, now we rest on weekly resistance via the 38sma. Once it breaks, the next stop is low to mid 17s.


IBM - closed the gap and sma resistance. Waiting for a pull back to 165.


TRXC - looks mighty interesting here. In the mist of a pull back off long term resistance. A break leads to 6-7.









Friday, May 1, 2015

Charts $fb - approaching a test

On a strong sma support via the weekly. 


Also near monthly sma support as well.


If a bounce from these levels does not occur, could be confirmation of more consolidation.




Thursday, April 30, 2015

$twtr review

Lossing 29% in a day and a half pretty much says it all with respect to perception. But let's look at the numbers anyway. 

Revenue had a different growth characteristic from pervious March quarters. Usually flat to Q4, but this go around it was a noticeable decline. (The guidance adds to the change in characteristic via is a revenue growth deceleration.)


Year over year increase was great at 74%, but still a deceleration. (Albeit a respectable deceleration.)


Margin characteristics were slightly better then last quarter, which is what we want to see.


Management tried to justify it but the excuses fell on deaf ears. And rightfully so. 

If the current leadership does not know how to utilize the real-time information property, and awesome interest graph, there are others that can.

There is so much that can be done. Twitter partnering with apps to act as a protocol and data sharing. Better discovery within Periscope. Better local Twitter trend discovery. More partnering across properties for the passive user. Or produce an app that is specifically designed for the passive user, that just wants to observe the trends and what the influencers are tweeting. (Have the option to engage in the conversation. Use it as a gate way.)

More needs to be done, and this quarter showed managements lack of execution. If they can not execute, they need to do right with the property and let others who are more capable for this stage of the company.