by | November 5, 2013 · 12:56 pm

Twitter on NYSE

Many investors jumped on and grabbed shares at the Facebook IPO a year and half ago. They were so happy, but unfortunately, they all saw the share price dip by over 50%. It took more than 14 months to recover to its IPO level and now Facebook are a little bit above the IPO price. Now it is time for Twitter IPO.

Companies like that usually have a high growth in revenue, and the average revenue growth for Twitter is 170% per annum. To compare with Facebook, they had an average growth revenue of 87%.

The big difference is that the revenue for Facebook was $3,7 billion in its pre-IPO, and Twitter`s revenue was $316 million in 2012. That is ten times what Twitter currently generates. Facebook and Twitter are both in the social network business with similar revenue models.

Take a look at the chart below. This chart compare the two company`s ads-revenue growth. Twitter is much younger than Facebook but Twitter`s ad revenue is following similar trajectories.

The mobile ads from Twitter is a greater share of its overall revenue than Facebook. About 70% for Twitter and 49% for Facebook.

FB vs Twitter

I don`t think Twitter have hungry investors trying to enrich themselves during the IPO like we saw during the Facebook IPO. Twitter is on the way to lose about $100 million this year. This is good news for investors because you know they need money.

Twitter will use all the money from the IPO to build a stronger and more profitable business. The future looks bright for a stable and growing profit for Twitter. Facebook had almost a billion users when they went IPO. That was nearly at the peak, but Twitter with only 250 million users have plenty of room to develop their business for the future.

But keep in mind that Twitter can never be like Facebook anyway. This is two different things, used on two different ways with two different kind of customers/sort of people. Comparing them will be wrong in some ways. Facebook is for the mainstream, and Twitter is for the pro`s.

The younger generation would rather check Twitter for the latest news than reading the local newspapers. They use Facebook to look for entertainment, playing games and chat with friends. Twitter raised the IPO share price to a range of $23 to $25 per share yesterday. The offering size is 70 million shares. That is $2 billion if an overallotment option of 10,5 million shares is exercised.

Twitter IPO is more expensive than Facebook without profits. Facebook and LikedIn Corp trade at about 12 times forecast 2014 revenue, and Twitter will trade at about 12,5 to 13,6 times forecast 2014 revenue. The new price will value Twitter at up to $13,6 billion (revenue of $1 billion).

Twitter plans to close the books on the IPO on Tuesday at 12 p.m. EST (1700 GMT), a day earlier than scheduled. The IPO is set to price on Wednesday, and the shares will begin to trade on New York Stock Exchange on Thursday.

Buying stocks is fun, exciting and stimulating, filled with action. Other news today: ISM Non-Manufacturing PMI at 10:00am.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | November 4, 2013 · 2:00 pm

Russell 2000 vs S&P 500

Japan`s Nikkei fell on friday, dragged down by Sony Corp, Nitto Denko Corp (Apple Inc supplier) and NTT Data Corp. All of them lowered their earnings guidance. Sony had a huge drop last week. European shares rise on hopes of dovish signals from ECB.

The ECB is expected to set a more dovish tone at its policy meeting on Thursday. Many people are scared because we are at an all time high and wonder where to go now. Credit Suisse said it believed equity markets would be significantly higher in 6 and 12 months’ time.

Gold are trading at $1316,70, and it is still above the support at $1300. This presious metal seems to go sideways for a while now. VIX is still low and stock market also seems to trade sideways, but I will take a closer look at it this week.

Janet Yellen wants the FED to work strenuously (like outgoing chair Ben Bernanke) to buy up bonds. She want the money to float into the private market and to increase theoretically available credit. In other words: she wants the money to be “loose”.

So far, this strategy have never been solving any recession problems. I don`t think FED have even one example in the the FED`s 100 year of history where loose money has borne along an economic recovery. She stands for something that have never worked.

The small cap stocks is the sweet spot I am talking about today. The best measure of small caps is the Russell 2000, and it has outperformed the S&P 500 by 2 to 1 over the last three months.

The Russell 2000 is up an incredible 27% over the last 10 months, while the S&P 500 is up “only” 19%. Is the small cap ride over now? Not by a long shot. And remember: 40 small cap stocks will rise 100% today! Take a look at the chart below. I have typed in the Russell 2000 compared to S&P 500.

RUT and SPX

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | November 1, 2013 · 1:55 pm

Samsung Up

Gold bugs are trading down and are now below 50MA. Many of the gold stocks have had a terrible year so far in 2013.

It`s difficult in this mining business. Barrick gold plans $3B capital raise. This stock has plummeted so far this year. Stock price yesterday was down -4,8% AH, after announcing plans for a bought-deal public offering of 163,5M common shares at $18,35 each, for gross proceeds of $3B.

Barrick Gold plans to use 2,6B of the net proceeds to strengthen its balance sheet and improve its long-term liquidity position by redeeming or repurchasing outstanding debt.

It`s better to stick with the tech stocks, but as we all know; shares follow earnings. How is to take over a job after a geniues like Steve Jobs? John Sculley know everything about that when he became the new boss at Apple in 1983.

Steve Jobs died October 5, 2011. The new boss is Mr Tim Cook, and he has a tough job to fill Jobs shoes. The two last quarters has not been so good for Apple, but I hop the holiday season is gonna be good for Apple so we can see a change for Apple.

Samsung is a huge competitor for Apple and thay are doing it well. The earnings are still raising and they are probably going to change the tech battle soon. When you look their earnings compared to Apple`s, you know what stock you should own?

News today: ISM Manufacturing PMI @ 10:00am

Samsung

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | October 31, 2013 · 2:16 pm

Facebook slid

Nikkei fell 1,2% today. The index is so far down 0,9% in October but still up 38% so far this year. The broader Topix was down 0,9% today. 2,82 billion shares changing hands and that is down from a six-week high of 3,48 billion.

European shares is down today with the FED`s less-dovish-than-expected statment rainsing concerns the U.S central bank could start trimming its stimulus sooner than foreseen. Gold is trading at $1334, down -1,11%.

LinkedIn plummeted 9,32%. Facebook slid -0,78%. LinkedIn`s revenue growth per user is slowing down. LinkedIn Q3 revenues came in at $393,0 million, up 56% from last year. Losses came in at $0,03 per share. Earnings came in at $46,8 million, up from $25,1 million last year.

LinkedIn is probably overvalued. The stock is up 107,8% the last 12 months. Stockprice should be much lower than it is today. P/E is 852. LinkedIn is 22 times sales and 25 times book. How is that possible? This is a bubble and how big is it gonna be?

Facebooks (FB) earnings in Q3 beat the expectations as the number one website in social media continue to expand with their mobile ads. Revenues from mobile ads rose to 49%. That`s up 8% since Q2 this year.

Profit in Q3 doubled to $621M, and EPS is now at $0,25. Revenue came in at $2,02B, up 60%. Facebook will not increase the number of ads in user feeds, and Mr. Mark Suckerberg says that the teenagers were using the Web site less. That is not good new for the future. The shares went down and are now trading at 49,01.

News today: Unemployment Claims at 8:30am, Chicago PMI at 9:45am.

facebook logo

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | October 30, 2013 · 2:06 pm

FOMC conclusion today

Nikkei rose (1,23%) today on expectations that the FED will maintain its easy money policy for the next months. Europe is up today, and Copper jumped 0,9% extending the longest streak since July 24. Gold is trading at $1354,30.

FED started its meeting yesterday and will release a conclution later today. It is expected that the FED will continue the bond-buying campaign into 2014, and they will announce its policy decision at 2 p.m today. The FED has held interest rates near zero since 2008. They have quadrupled the size of its balance sheet to $3,7 trillion. All this with three rounds of bond buying.

It is expected that the FED will keep buying bonds at an $85 billion monthly pace until march next year. If Yellen win confirmation from the Senate, it goes the way people think. She will probably face tough questions from the Republicans who is critical of the Fed`s ultra-easy monetary policy, which is risky for the financial stability and for the future inflation.

The shutdown has slowed down the economy in Q4, and it will be interesting to see the numbers of months of economic data that may convince the FOMC that the recovery is continuing at a solid pace.

The FED conclusions today is important, but I will also look for Facebook earnings today. The traffic on the nr. 1 website in this social media business is expanding. So are the advertising, and so should the number. They could reach $100 billion in sales in the next five years.

Surprisingly, Pinterest drives more traffic to publishers than Twitter. Facebook, and it is undoubtly the best, nearly doubled its traffic since 2012. Forget the rest. Google+, LinkedIn, Youtube and other sosial media is a flop so far.

News today: ADP non-farm Employment change at 8:15am, Core CPI m/m at 8:30am, FOMC statment at 2:00pm.

FOMC-dice

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