Meta Platforms, Inc. (META)

Acquiring Oculus for $2 billion, a company that specializes in virtual reality. $400 million in cash and the rest in stock. This is concerning. “Drunken sailors going out and spending their months pay in one night.” Thinks this is illustrative of a very expensive stock and a CEO who has full reign and knows he has a currency and who has to compete against Microsoft Gaming, Google, Apple and everyone else. This is a gaming platform. This concerns him.

Fascinating company. Doesn’t own, but if he did he would probably Sell. They’ve had a bit of a miraculous recovery last year and their financials have come in better than what he had expected. One of the giants of social networking but he worries about this franchise longer-term and about the sustainability of what they are doing. Very, very expensive. There are safer places to play.

Put strategy. Risky only when you get put to. You have to watch it every day.

Social media stocks unfortunately have not been around long enough to have seasonality. In order to have seasonality, you have to have a security that has been trading for at least 10 years, preferably 20 and sometimes even more. Technicals are very, very positive. Trend is up and it is outperforming the market and probably trading very close to its 20 day moving average. Any kind of weakness would be a buying opportunity.

Clear theme of money working toward social media. They are successful in monetizing their mobile platform which has lots of legs in it. As long as group performs well and beats estimates you could see multiples continue to expand.

Earnings were fabulous. On past shows he has shied away waiting for greater certainty. That is starting to happen. They are executing well. The big question was whether they were going to be able to make the transformation from a social media juggernaut to an advertising model. Have been doing extremely well with it. Mobility now makes up 53% of their advertising revenues. Growing at a very fast pace. The caveat is their price, which is trading at 45X earnings. At some point, fundamentals are going to have to grow at a faster rate than their price to bring down that multiple to something more reasonable.

This falls into the growth stock category but she is conscious to not overpay for it. Trading at 69X earnings, which is too expensive for her. Feels this is a pretty dangerous game because if the growth isn’t there to justify what people expect, you get the share price coming off. Daily usage by early teens is sort of dropping off, which is a concern in their high multiple.

An expensive stock. Also, he is not sure how people or companies being on Facebook, translates into revenue all the time for them going forward.

(A Top Pick Nov 26/12. Up 81.23%.) This was never in his fund and had not qualified but there is ownership in his firm. He would be a buyer at this price..

Has done a tremendous job with millions of active users, but you are trading at 60 times earnings. It is a glamour stock. She is on the sidelines. Daily user activity amongst teenagers has actually declined. Huge red flag.

Twitter (TWTR-N) or Facebook (FB-Q)? He is going to throw a curve on this one. Buy Google (GOOG-Q) instead. These 2 are wonderful companies and is very exciting that they have gone public. This is the new society that we live in and it is wonderful that these companies are going public, but we have to be very careful with their money and make sure we are grounded in terms of our investments. At best, these companies are growing into their valuation and it may take a good long time to do it, if they do it.

Had a bad IPO. Comfortable buying it back in the $20s. He modeled it out very conservatively and now targets in the high $40s. He is holding it and their future roll out of video could really boost revenues.

Doesn’t believe it will ever materialize into the revenues that some people believe they will. It would have to be speculative money because it could correct 30-40%.

There is always going to be advertizing dollar competition and Twitter and Google are doing that. He would go for Google. They have been on a momentum tare. Google is the senior one and is doing it rather than having the promise of doing it.

Likes it. Has doubled in 6 months when he last recommended it. Impressions are great. Return on investment to the customers are about 4 times. He is seeing numbers as high as 20 times. This and Google are probably your two best companies to capitalize on mobile impressions. FB can start charging more now. 20% of time on Internet is with Facebook.