Meta Platforms, Inc. (META)

Will Twitter be a problem for my holdings and what is the difference between these 2 companies? Twitter is for the short, snappy, communications. Facebook appears to be monetizing but it is still pretty expensive. If you own, maybe you should be taking a profit if you are looking at twitter and see what they price the IPO at.

User base is enormous and if they can harness that it could be quite attractive. Advertisers that pay them for the mobile platform have had initial success and are likely to open their wallets and really start to spend some money. The next quarterly report could really surprise to the upside.

Apple (AAPL-Q) or Facebook (FB-Q)? He doesn’t like either one of these. On this one. He has never made any money on social media. It’s a space, he does not understand so he doesn’t go places that he doesn’t understand.

Has some hesitancy with a lot of technology stocks. Trying to figure out the durability of some of these franchises can be very difficult. Things can change very, very quickly. Executed better than he expected. Doesn’t know about the durability. A lot of young people are looking at this and saying it is yesterday’s story. The jury is out. He doesn’t have the confidence that they are going to be there and not be replaced by something else.

We are going to see a new issue for Twitter. The company denies this is going to happen but it will be happening. That is going to set a fire under the social media stocks like you would not believe. Likes this one a lot, but much prefers the ETF Global X Social Media (SOCL-Q).

With their last earnings report he became interested, they really turned things around. They easily beat earnings estimates. He would like to see it break above $41.52 and he expects resistance at that time but thinks it goes higher.

Have done a phenomenal job. 50% revenue growth. Gained traction, both on the pricing side and volume side. This is a growth stock. It takes a different skill set to be able to value them. Over time that growth slows and you have to make sure that the contraction you ultimately get and the valuation multiple is exceeded by the growth in earnings and at what point they cross. Very difficult to do. If you own take your profits.

Doesn’t see a dividend any time soon. He is negative on this one. Is a bear to try to trade. Model $15.44, -40% differential. If it got to $18.70, he would consider purchasing it. It is rich right now in terms of valuation.

Feels that a lot of people bought this on the IPO and he doesn’t see the stock going back to that price anytime soon. There is a lot of opportunity potential with a stock like this if they can convert what they do into ad revenue, some kind of data analytic business or maybe do an acquisition where they can augment their current core business. He fails to see what kind of revenue this business can derive for any sustained period of time.

She is a value investor so she finds this one difficult to know what they are going to look like in a few years time. She is not in this space which is changing very fast.

Trading at about 35-40 times earnings. Also, doesn’t understand how they make their money. There are other great companies that are trading at a 3^rd of that multiple.

SHORT – Valuation is rich. More and more data is coming out about young people moving off of Facebook.

Long ZYNGA (ZNGA-q) and Short Facebook (FB-Q)? A pairs trade that he would probably not put on in his funds. Zunga is interesting but its business model has run into a lot of problems and come under a lot of pressure. One of those sort of failed tech IPOs but is a very beaten up stock. Has quite a bit of cash on their balance sheet. This one, on the other hand, is a really good business, great company but expensive. Has always found with pairs trade that trying to buy a value, kind of “not great” company at a low price and short a really good company at an expensive valuation to play that spread, typically does not work out well.

Difficult to say what is going to be the scenario in the long run. Hard to model what positions companies like this are going to have 5 years from now. As a value investor, she finds this is trading at a very high PE.

22% of active users online time is spent on Facebook. Only 4% of ad revenue. That is a huge, huge opportunity. New apps will drive monetization of ad platform.