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Twitter NitTwits


Twitter.  It is going to be an endless headache.

Pop an acetaminophen and let’s make the best of it.

Especially as soon as they start making 500,000,000 worthless ads/day available to the marketplace.

But people will want to try these ads.
They basically have to try to get some basic metrics.
This will create revenue.
Their revenue is so small, you don’t even have to create that much to make it look amazing, even though it won’t be amazing.

This could get weird.

Let’s have fun.

Let’s take 1/2 the cash (after tax) that we made on the IPO day of Twiiter.

If you notice TWTR fell below 40 today.

If you look at the call chains, they look pretty sweet for gambling purposes.

Again we see a lack of balance to curtail over exuberance in the market place.

Now, I cannot predict weird things happening, but let’s play this with the common sense we employed in others.

Low price, nice length, reasonable gambling strike.

I’m buying some long calls, I think those are a bargain.

The metrics make twittertwits look like hype still – but this creates false exuberance – and volatility.

Let’s see if we can squeeze some more cash out of this one . . .

Did Someone Hear a Birdy?


Twitter.

Hmmmmm.

What to do about Twitter.
Well, only a handful of people have asked me. I’m going to opine anyway.

What to do?
Well, You probably will not be able to do anything.

They started with a semi reasonable IPO price, and then drove it up.

Institutions are going to clean up.

This is one of the most overpriced IPOs ever done at this moment.
For some reason they are making us feel like it is not.

Don’t drink the cool-aid.

If you want to gamble and you can afford to lose some cash.
AND, you must sit at you computer for this one.

OK.

If you can buy some of this overpriced stock as high as the very low 40s right out of the gate then do so, as much as you can tolerate.

I’m betting, and so has everyone already said, they expect this baby to go high 40s, maybe touch 50.

The hype has been crazy and people want this.
They are going to get it.

Institutions will be laughing for the whole ride.

As soon as you make a nice profit or this gets near high 40s – lets make a line $46 – start selling.

Sell 2/3 at $46 if you ever get there, or you already haven’t, if it continues to rise sell fast all the way up.
At $47 sell 2/3 of what you have left.
At $48 just dump it.  You earned enough for one day’s work.
Be proud.
You might not even have the computer processing power to make a trade fast enough if it gets to $50.

That bubble won’t last.

You know why?  Because everyone said it will peak at $50 already.

You want better fundamentals?

OK, do your math.
500,000,000 tweets per day.
Let’s be overly generous and give each tweet a CPM rate of $10.
Let’s also be super generous and let’s quadruple their inventory right now and double the users!!

Crazy?  Yes!!!
The market won’t sustain this kind of nonsense when there is so much profit to be had on the first day.

By the way, those numbers calculate out to a revenue model that allows for an extremely high market cap and a stock price that, what do you know, peeks at $50!

That is why we do what we do!

Let’s see what happens the first few weeks then we’ll make more predictions.

We hope it goes super volatile.  That is where we can make some nice cash!