Twitter, Inc (TWTR)

He thinks a lot of the management and of the founder getting involved again. The valuation is not inexpensive. You need to see a lot of improvement in monetization of the brand to make any money.

There is no seasonal comment because it has not been around long enough. It seems to be trying for form a nice base and recently broke above a resistance level into an upward trend. He wants a break out above $32 to confirm it is in an upward trend.

With all the choice that we have in the IT space and all the exciting happenings, there is just too much turmoil with this one. There seems to be better opportunities, and the stock has shown that. It has basically treaded water since going public.

(Market Call Minute.) New CEO. He will watch to see if they can turn it around. Not something he would own.

It is hard to analyse companies that don’t make money. Trading at an infinitesimal price to earnings ratio, so it is impossible for him to analyse.

Has a great product, but has been exceptionally poorly managed. Missed the boat in many different ways.

There are talks of a takeover, but he tends not to want to purchase a stock hoping that there is some kind of a takeover. Looking at fundamentals this needs to find more opportunities to grow its user base and increase engagement. The user base is at 302 million active users, which is pretty strong for a company that just IPO’d not that long ago. Ultimately they need to better monetize and find ways of making earnings and revenues. The CEO transition could lead to more product changes, which is a good thing. If there is too long a transition in finding a permanent CEO, it could find trouble being independent. Its current level could be its support level. A bit oversold, so from a trading standpoint it might make some sense.

Has chosen to make his investments through Facebook (FB-Q), whose metrics are doing extremely well at the expense from an advertising standpoint of groups like Twitter. With the CEO having just left recently and a question of who will take over, there are just too many moving parts for him.

This has support at around the $35 level. It has been basing somewhat. Too new a stock to run a seasonal analysis on, but you can see some of these momentum stocks do well in the summertime. Had an 8% bounce in the after hours, so it is breaking out from the base building pattern, potentially suggesting a higher level with resistance at about $51.

2 things have to happen. They have been struggling on the execution and the roll out and enhancement of their services. Their subscriber growth has been slowing and has not been responsive and executing well on their business plan. They have interesting platforms, but they have a problem executing. It would make a lot of sense for Google (GOOGL-Q) to acquire this company.

Go Long and Buy put options in case the turnaround fizzles, etc.? This has been in the news quite a bit in the last couple of days. In his opinion the Google plus has not been a success at all, and for Google to buy them that would solve a lot of problems for Google. Thinks Twitter is a gold mine and you have to stay with it. The other question is whether advertisers really believe that in the fast-paced world of Twitter, that we want to get interrupted with an ad. He would buy this in a pragmatic (?) progressive position. Putting options on is not a bad idea.

(Caller is short this stock.) Good Short. Great company, but he is still a little curious as to how they are actually going to translate their business model into a big stream of recurring revenues. He would look at 35X area as a covering point for the Short.

Facebook (FB-Q) seems to be the name that you want to own in this particular space, given its valuation and that it is a little bit more on solid footing. Twitter is doing some interesting things in terms of trying to monetize and advertise, etc.

Not his top pick in that space. A good company and a dynamic place in the market space. When a company becomes a verb it is a good thing, but he prefers FB-Q or GOOGL-Q.

Not a stock for the faint of heart and is still a speculative company, because it does not make money yet. Also, it is unclear as to how it is going to make money. If you can’t afford to lose the money, you should not be investing in companies like this.