Aug

6

TWTR, from Stef Estebiza

August 6, 2015 |

There are companies in which you invest, even at high prices, because they have a solid business, returns and steady gains, justifying the ups and downs of the markets. They're almost never cheap, except in times of crisis, for those who know how to catch the moment.

There are other companies for which you are willing to pay much more because of the frenzy of the moment, and the golden visions of analysts (it's their job sell) can catapult them to exceptional values even in a short time. But what happens, after the step of publicizing the "elixir of love", if a stock does not take off during an expansion phase, but rather it suffers periods of continued harmful reports (and bad data), like now?

Suddenly, the speculator starts to turn into a speculator at a loss, or worse, undergoes a Kafkaesque metamorphosis from a once confident investor. The initial price paid corresponds to the start-up costs of the future company (hoping takeoffs).

See references like Yahoo (and many others). Generally an eye ball estimate corresponds to a loss of value of the company by up to 90% of the most ever by a title.

I write this because looking at the chart of TWTR I can not help but notice that the maximum of April 2015 was only a mistake, prices quickly returned to the values of December 2014, to be broken in these days. Everyone would think of a support at $ 25, but the fact is that I can not think of any reason that could justify a return to higher prices (including interest rates rise) in the near term. However never say never. $25 must be a dam, but if broken I will start to consider $7.4 as (the worse case) target for a rebound.

anonymous writes: 

Twitter remains a fad, a digitalized counterpart to Donald Trump, a demonstration of socially acceptable narcissism combined with determined information overload. The lack of user growth (and little suggestion of the resumption of such growth) hobbles Twitter's efforts at monetization. That lack of growth also impacts on the underlying value of the assets—the value of a network increases with the addition of new users and the more users it has, the more that that value increases beyond a simply arithmetic increment. I've heard it suggested that a new video streaming capability is the future of Twitter. Twitter meets YouTube. News flash: YouTube doesn't make any money. It covers cost. I doubt that a service that just covers expenses could remain valued at $18 billion, never mind one losing $500 million. 

anonymous writes: 

As TWTR approaches its inevitable denouement [a reckoning with a seemingly binary outcome in which stockholders might either recover 100 - 150% of their marked to market investment via some external corporate action, or perhaps see shareholders equity trade zero], I have become increasingly interested in what goes on when a 'Tweet' occurs and if the underlying technology has any intrinsic proprietary value for a suitor or not.

This article "The Hidden Technology that Makes Twitter Huge", written before the float, had some surprises and an interesting bonne bouche.

None of this will be 'news' to the very tech savvy on this list but one posts nonetheless because even a modicum of understanding of what makes up the technology behind this stock is important in placing one's bets for the upcoming binate discontinuity.

* The 31 data fields within a tweet are publicly documented
* A tweet, at its deconstructed level, is - for all intents and purposes - indestructible. Giving substance to the lie of the 'throw away' nature of sending a tweet.
* ALL the following is known: ID of creator, If generated by Carbon based life-form or Silicon based entity, date & time of origination - amongst much else.
* The whole piece is public record and effectively 'open source'
* So so called 'GeoJSON' - allowing absolute and relative triangulation of a tweeter's (did I really just use that word!) location. In point of fact, the absolute and relative positioning of users likely uses structures more complex than triangulation.

Is there anything worth buying? I have no idea. A suitor has to really, really, really buy into the advertising revenue bit and look through the expenses issue mentioned by the Chair. One gathers that the security services are well past 'GeoJSON' for watching our every move and recording 'metadata'.

I wonder about market applications from using something like 'GeoJSON' [relative locations of different markets, how much they have moved and the time elapsed between different ranks et.al.]

 


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