Tag Archives for " twitter "
Not Even Trump Can Help Twitter!
Yesterday after the close, Twitter (TWTR) announced yet another disappointing quarterly earnings report. On the surface, Twitter has the wind at its back. We just had the craziest Presidential election in history, and the most active global news flow I’ve ever seen. Black Lives Matter. Migrant crisis. Syria. The Brexit. Italy’s No Vote. Right wing nationalist movements rising worldwide. There’s never been more stuff to talk about! Heck, President Trump Tweets so often that you’d think he owns the stock. Plus, Twitter gets a staggering amount of exposure from the media. Athletes and celebrities’ feeds are constantly promoted on the mainstream media. Yet Twitter’s ad revenues DECLINED year-over-year in Q4. Facebook (FB) grew ad revenues by 53%! And Facebook has a revenue base that’s 10 times as big! So what’s the deal here? Aside from the fact that Twitter is not user-friendly and offers little in the way of instant gratification — Facebook has the greatest advertising platform the world’s ever seen. It has in-depth personal information on almost 2 billion people. Think about it. Odds are, Facebook knows: 1) Your full name, age, location, marital/family status, and employment history 2) All of your hobbies and personal interests 3) Your political affiliation 4) What websites you visit 5) What companies you buy from 6) Who you talk to 7) Where you go Twitter surely has some of this data, but it also has some major disadvantages: 1) A smaller user base, and smaller data set 2) More anonymity Speak to anyone in the Internet marketing world, and you’ll know that businesses are tossing huge sums of money at Facebook and Instagram ads. Twitter? Not many folks seem to care.
Continue Reading -->Is Gold About to Get Cracked?
1) US Economic Data Comeback US economic data continues to firm up following a major drop in momentum since July. In the past week, we’ve seen decent new home sales, Markit Services PMI, durable goods, Chicago PMI, GDP, jobless claims, and ISM Manufacturing numbers. Check out this chart of the Citi US Economic Surprise Index — this could be the start of a new trend following a collapse in expectations: Some reports have been some clunkers, but overall, the strength of data relative to expectations is improving into Friday’s big NFP report. However… 2) Traders Aren’t Sold on the Fed Just Yet A lot of traders believe a December rate hike is a foregone conclusion. The numbers say otherwise. Fed funds futures imply a 61% probability of a December rate increase, so the market’s not buying in whole-hog. This brings us back to this week’s NFP report, which could move the numbers one way or the other. I’d especially be watching… 3) Gold! Call me crazy, but doesn’t this Gold (GLD) $125ish level look pivotal? Gold has been making lower highs, and I’d assume that a big NFP report on Friday could mean a very ugly break of this $125ish support level. There’s been a lot of talk about a possible head & shoulders forming over the past few weeks, but this bigger-picture pattern looks more important. 4) Is Twitter Still in Play? Today, Bloomberg reported that Google (GOOGL) is considering a bid for Twitter (TWTR). Google has perennially been seen as a logical buyer for Twitter because of the latter’s strength in real-time search. But the real good news for Twitter longs is the sheer number of rumored suitors floating around — Salesforce.com (CRM), Disney (DIS), and Microsoft (MSFT) have also been mentioned. This way, if one alleged suitor leaves the picture, we’ve still got others to prevent an all-out collapse. But I’ll still only believe this deal when I see it. Mark your calendars for Twitter’s Q3 earnings report on October 25 — it’s gonna be a big one! 5) A Boom in Call Options? The ISE Sentiment Index, which is my favorite short-term sentiment indicator, is reading 189 this morning as of 10:50 a.m. ET. That’s 189 calls for every 100 puts, which means rampant bullishness, at least on an intra-day basis. Perhaps ironically, we are seeing lots of activity in GLD. NFLX, TSLA, BMY, and CAB are also active. (TSLA announced strong sales, CAB is being taken over)
Continue Reading -->T3’s Take 3: Twitter Skyrockets on M&A Chatter, Facebook Not so Much
Trade Options Like a Pro… My buddy Doug Robertson is hosting a FREE options trading webinar next week. Doug’s going to be teaching his unique method for creating income with options, so I suggest you check it out. 1) Twitter Blasts Into Orbit This morning, CNBC reported that Twitter (TWTR) may be in talks to be taken over by Google (GOOGL) or Salesforce.com (CRM). While Twitter has been the source of regular takeover rumors for over a year, traders certainly seemed to believe the new chatter. Twitter shares rose an incredible 21.4% to $22.62 today, its best performance in over 2 years, while call options volume exploded. In fact, Twitter call options set a volume record today, surpassing their last record set on December 26, 2013 – when Twitter’s stock price hit an all-time high of $74.73. 2) Markets Take a Break US stocks took a breather today after 4 straight days of gains and a record high in the Nasdaq Composite yesterday. The S&P 500 fell -0.6% to 2164.69 as traders locked in gains. Large cap tech was weak, with Apple (AAPL) falling -1.7% to $112.71 after market research firm GFK said iPhone 7 sales could disappoint. Crude oil dropped -3.2% to $44.85 after Saudi Arabia dismissed reports of an output freeze or cut at next week’s OPEC meeting in Algiers. As a result, oil and energy services stocks led the decliners’ column. Biotechnology, industrials, and financials were also weak. 3) Facebook Suffers a PR Blow Shares of momentum favorite Facebook (FB) took a little dive today after apologizing for an error in its video measurement tools. Facebook mistakenly overstated the average time its users spent watching videos for the past 2 years. This news raises questions about the success of Facebook’s high-profile push into video, and is causing some frustration on the part of advertisers that make decisions based upon Facebook video metrics. However, Facebook said that its miscalculations did not impact customer billings or the number of video views, which should soften the blow to some extent. P.S. Don’t forget to check out Doug Robertson’s options event. Monday’s Trading Calendar US Economics (Time Zone: EDT) 10:00 New Home Sales (Aug): exp. 600k, prior 654k 10:00 New Home Sales MoM (Aug): exp. -8.30%, prior 12.40% 10:30 Dallas Fed Manf. Activity (Sep): exp. -3, prior -6.2 11:45 Fed’s Tarullo Speaks on Next Steps in Bank Stress Testing 13:30 Fed’s Kaplan Speaks in San Antonio Moderated Q&A Global Economics 04:00 EUR German Ifo Business Climate 05:30 CHF SNB Chairman Jordan Speaks 10:00 EUR ECB Pres. Draghi Speaks 19:10 CAD BOC Gov. Poloz Speaks Earnings Before Open: Cal-Maine Foods (CALM) Carnival Corp (CCL) After Close: None of Significance
Continue Reading -->Twitter Options Go Crazy on Takeover Rumors
We’ve seen many, many Twitter (TWTR) takeover rumors I Googled twitter takeover rumor and got 7.94 million results. Benzinga has a great list of 2016 Twitter takeover rumors here. Obviously, they’ve never come true. And anyone who’s been watching the markets for any period of time knows that 99% of takeover rumors are false. But traders are really, really buying into CNBC’s fresh report that Google (GOOGL) or Salesforce.com could buy Twitter. The stock is up 19% to $22.16. This is Twitter’s best day since July 30, 2014. And call options volume is exploding. As of 11:50 a.m. ET, 458,468 calls have traded vs. a 10-day average of 70,403. This is the second biggest day for Twitter call options volume ever. The record is 618,767 contracts, set on December 26, 2013 when Twitter hit its all time high at $74.73. And frankly, the Twitter takeover rumors remind me of the endless takeover rumors that surrounded BlackBerry (BBRY) a.k.a. the artist formerly known as Research In Motion (RIMM). Interestingly enough, T3 Live did a Twitter poll (ironic, huh?) asking if Twitter will receive a takeover offer. 60% say yes: But I’ll only believe this when I see it.
Continue Reading -->T3’s Take 3: Bears Fail Ahead of Pivotal Jobs Report
1) Jobs in Focus The nonfarm payrolls report is always one of the biggest events of the month, and with traders thinking the Fed is about to raise rates, tomorrow’s August report is no exception. Today, the US dollar fell on profit-taking following weaker-than-expected Markit US Manufacturing PMI, ISM Manufacturing, and Construction Spending numbers. But it’s been had a nice bounce since the Fed hawks came out in force to prepare the market for additional rate hikes. So presumably, traders are gearing up for a repeat of the big July jobs report, which was an impressive across-the-board beat. 2) The Bears Fail in Spectacular Fashion. The S&P 500 fell 0.6% to 2157.09 in early trading and the VIX popped 8.9% to 14.61. That had a lot of folks — myself included — thinking the S&P would have its first 1% down day since June 27. However, that small dip was quickly bought and the index climbed up to finish flat on the day. Biotechnology overcame an early deficit to turn green, and we also saw rebounds in large cap tech and transports. Regional banks led the decliners column, and energy was weak due to another drop in oil prices. 3) Jeff Cooper on Twitter Twitter (TWTR) has been one of the hottest stocks in the market, and today, Jeff Cooper stepped in to break down the action: TWTR continues be on the prowl into the weekend on great expectations of something going on. This morning it Pinocchioed the 20 strike which perpetuated some selling and a pullback to yesterday’s highs coincident with the 20 period on the 10 min as anticipated in yesterday’s note. Note how this morning’s spike occurred out of an hourly bull flag following yesterday’s surge. Friday’s Trading Calendar US Economics (Time Zone: EDT) 08:30 Trade Balance (Jul): exp. -$41.4b, prior -$44.5b 08:30 Change in Nonfarm Payrolls (Aug): exp. 180k, prior 255k 08:30 Two-Month Payroll Net Revision (Aug): prior 18k 08:30 Change in Private Payrolls (Aug): exp. 180k ,prior 217k 08:30 Change in Manufact. Payrolls (Aug): exp. -3k, prior 9k 08:30 Unemployment Rate (Aug): exp. 4.80%, prior 4.90% 08:30 Average Hourly Earnings MoM (Aug): exp. 0.20%, prior 0.30% 08:30 Average Hourly Earnings YoY (Aug): exp. 2.50%, prior 2.60% 08:30 Average Weekly Hours All Employees (Aug): exp. 34.5, prior 34.5 08:30 Change in Household Employment (Aug): prior 420 08:30 Labor Force Participation Rate (Aug): prior 62.80% 08:30 Underemployment Rate (Aug): prior 9.70% 09:45 ISM New York (Aug): prior 60.7 10:00 Factory Orders (Jul): exp. 2.00%, prior -1.50% 10:00 Factory Orders Ex Trans (Jul): prior 0.40% 10:00 Durable Goods Orders (Jul F): exp. 4.40%, prior 4.40% 10:00 Durables Ex Transportation (Jul F): exp. 1.50%, prior 1.50% 10:00 Cap Goods Orders Nondef Ex Air (Jul F): prior 1.60% 10:00 Cap Goods Ship Nondef Ex Air (Jul F): prior -0.40% 13:00 Fed’s Lacker Speaks on Interest Rate Benchmarks in Richmond 13:00 Baker Hughes U.S. Rig Count (9/2): prior 489 13:00 Baker Hughes U.S. Rotary Gas Rigs (9/2): prior 81 13:00 Baker Hughes U.S. Rotary Oil Rigs (9/2): prior 406 Global Economics 03:00 EUR Spanish Unemployment Change 04:30 GBP Construction PMI 08:30 CAD Trade Balance Earnings Before Open: None of Significance After Close: None of Significance
Continue Reading -->Twitter Is No Fun, Can’t Offer Proper Guidance
I’ve been a long-time bear on Twitter (TWTR) and the company’s lousy quarter just reinforced the fact that it has 2 major problems: 1) User Experience As I’ve said before, unless you have a lot of followers, Twitter isn’t much fun. You don’t get much engagement relative to platforms like Facebook (FB) and Instagram. Meanwhile, go out and find any teenager and ask them what platforms they’re focused on. They’ll say Snapchat and Instagram, which offer more engagement, are easier to use, and are just plain more fun than Twitter. Not everyone can come up with clever one-liners, but everyone can take a selfie or shoot a quick video. This has to change. Twitter has to become FUN to use. 2) Guidance I’m baffled by Twitter’s inability to set its guidance bar low enough to generate real beats. For Q2 (reported yesterday), Twitter guided for $600 million in revenues. At the time (4/26), that was 12% below street estimates. And Twitter only beat it by $2 million in revenue! In Q1, Twitter actually failed to hit its own guidance, even though its guidance was 5% below street expectations when issued. Any smart company offers guidance low enough to beat. So if Twitter can barely beat its guidance, it says 1 of 2 things: either they continually overestimate their own revenue momentum, or they need to take investor relations 101. Given that their CFO is a former high-profile Wall Street analyst, I think it’s the former. Now if Twitter can’t beat its guidance for Q3 — which implies just 7% revenue growth — we’re looking at a single-digit stock unless it gets taken over. Perspective We have to remember that at one point, Facebook (FB) — the undisputed king of social and perhaps the greatest digital ad platform the world has ever seen — was at one point down and out. So a turnaround can’t be completely counted out, assuming Twitter can drastically improve its user experience. (I don’t have faith myself) That’s the first step to getting the numbers to turn, though throughout history, I can’t remember a single successful turnaround of a social media platform. Friendster… nope. MySpace… nope. AOL… nope. Google+… nope. For now, this chart below tells you everything you need to know about Twitter: It plots the 2017 consensus revenue forecast (red line) against Twitter’s stock price since the IPO. This is a good illustration of the trend of growth expectations for the company. In early 2015, analysts expected over $5 billion in 2017 revenues. Now they’re forecasting under $3 billion. That red line needs to start going up. Soon.
Continue Reading -->The Morning Hammer: Apple Smashes Bears, Record Nasdaq Highs in Sight
Global markets are in a happy mood courtesy of Apple’s (AAPL) better-than-expected earnings report, and Japan’s signaling of more stimulus. Apple is up ~$6.50 in the early going after beating analysts’ earnings, revenue, and iPhone unit estimates, and offering strong forward guidance. Meanwhile, just as traders thought Bank of Japan stimulus was priced in (based on yesterday’s big rally in the yen), PM Shinzo Abe showed commitment to a $265 billion stimulus package. That’s pushing the yen back down, which is great for risk appetites. SPX futures are slightly green, while NDX futures are up 0.7%. If Apple generates some follow-through among other large-cap techs, we could see a new Nasdaq Composite all-time high above 5231.94. And the NDX may finally exceed its March 2000 high of 4816.35. Facebook (FB) reports after the close, and if it repeats another blowout, maybe we see those records fall by the weekend. In related news, Twitter (TWTR) dropped another guidance stink bomb last night and is getting smashed up. Meanwhile, Fiat Chrysler raised its forecast, and Comcast (CMCSA) and GlaskoSmithKline beat. Crude oil is down after the API showed a very small decline in crude oil inventories after the close yesterday. EIA data hits at 10:30 a.m. ET. Economists expect a 2 million barrel decline. We also have durable goods, pending home sales, and of course, the FOMC rate decision. Fed Funds futures show that traders are pricing in a mere 10% chance of a rate hike today. The forward outlook will be key. I would pay close attention to see if the Fed eases up on its concerns over the Brexit, given that global economic data has been generally strong as of late. Lately, I’ve been emphasizing that perception of the Fed, which impacts all financial markets, is incredibly volatile. Ths is especially true this year. 2 months ago, traders were pricing in a 74% chance of a December rate hike. That number dropped to 10% chance after the Brexit. Now those odds are back up to nearly 50%. And we act like Tesla (TSLA) is volatile… Now one thing I found really interesting yesterday was the action below the surface in biotech. IBB was red because of Gilead’s (GILD) weak earnings report and big decline. Yet XBI, which is much more diversified (GILD is 8% of IBB), was actually well in the green. So below the surface, biotech was strong (as was the Russell 2000) on an overall snoozer of the day. So pay close attention to biotech — if it turns out to be a coiled spring, the bulls might party like it’s 1999. And 1999 was a good year!
Continue Reading -->Apple Eats Bears, Bears Eat Twitter
1) Holding Ahead of Apple US markets entered a holding pattern ahead of Apple’s (AAPL) earnings report, which hit after the close today. (more on this below) The S&P 500 traded in an extremely tight range today before finishing at 2169.19, up a tiny 0.03% on the day. The Nasdaq and Russell 2000 indices showed solid outperformance today despite an intraday drop in oil and some biotech names. This was a bit of a surprise given that overseas markets indicated a risk-off posture in the early going, perhaps best exemplified by the sharp rise in the Japanese yen, which rallies when traders grow more cautious. Crude oil stayed weak, with WTI crude breaking the $43 handle, though energy stocks actually finished up. 2) Bio-Confusion Large cap biotechnology stocks took a tumble today after industry giant Gilead (GILD) reported disappointing second-quarter earnings results and poor guidance. Gilead, which accounts for 8% of the iShares Nasdaq Biotechnology ETF (IBB), fell -8.5% today, while IBB dipped -0.7% That wasn’t exactly a pretty picture, but outside of Gilead, biotechnology was actually pretty decent. The XBI ETF, which is much more diversified than IBB, was actually well in the green today. This indicates that many traders believe Gilead is facing company-specific problems that won’t impact the sector. 3) Post-Close Earnings Twitter (TWTR) beat analysts’ earnings estimates for the 6th quarter in a row, but it reported disappointing revenues and delivered atrocious third-quarter guidance. Many traders were surprised at Twitter’s dissappointment given the headline-heavy US election cycle and global geopolitical troubles, which should be driving significant news consumption and chatter via Twitter. Twitter shares were down sharply in extended trading. That’s not a surprise given that the stock just rose over 20% on takeover speculation. Meanwhile, Apple (AAPL) was up over 5% after-hours as the company beat Wall Street’s expectations for sales, earnings, and iPhone unit sales. Apple also offered strong forward guidance. This should mean good things for the Apple calendar spread trade I suggested today. And it may even be good for the Intel (INTC) calendar spread trade from last week if tech stocks get a lift.
Continue Reading -->Twitter: It’s Not About Earnings, It’s About the Reaction
I could post my numbers here and say that Twitter‘s gonna beat on EPS, have inline revenues, and the guide conservative, but frankly folks it doesn’t matter. For Twitter and this quarter, I think it’s all about the reaction to what they say. And what they are saying is new messaging and the messaging they should have had all along, which is about total platform engagement and the growth of that. Not the MAU metric, especially as Twitter doesn’t give themselves that soft-shoe MAU measurement. Twitter has never measured MAU’s the same drab way most every other social media company does. They hold their MAU’s to a higher standard than does FB, LNKD, and pretty much everyone else. But Adam Bain has been quite vocal about Twitter’s total audience and if that is where the commentary goes, Twitter is at least worth twice what it is today just given industry comps. Now I’m not going to say that Twitter’s quarter is totally meaningless on either something very good or very bad. A huge beat or a huge miss will obviously move the stock. But I’m not sure Twitter posts a quarter that is a big “financial surprise.” It’s all about assessing the opportunity and the future growth. The most encouraging “change” of late is the large ramp in video content and live streaming deals. This is definitely a notable positive change. A few more deals as well as “applications” that Twitter can keep bolting on and they will increase the “non-logged” audience as well as MAU’s. Simply put, there’s nothing more useful than Twitter from a personal and business tool in the social media space. Over time we will find out just how valuable that utility is to the company and others that are still activity building money making 3rd party apps using Twitter’s data. Oh, I will say that everyone that keeps playing Twitter for the M&A takeout will likely be disappointed, assuming they don’t hold it long enough. The single worst thing Twitter can do is sell itself for a premium over its currently depressed stock value. In fact, the more I look at the economic landscape I’m starting to think that LNKD made a huge mistake selling to MSFT. Why? Because if this US and Global economy does what I think it’s going to do, the next phase will be a material change in jobs growth, especially of better paying jobs. I also think salaries and wages could start increasing again. It’s very overdue for such a change as they haven’t risen in any material ways since 2006. That’s a decade folks. Thus, in a strengthening economy that grows Jobs, LNKD probably just sold itself for $5-10B less than what it would have risen to again on its own, And possibly $10-20B less than maybe they could have sold the company for in the future. Now just think that Twitter’s total addressable market is for sure 5X and possibly as much as 15X what LNKD’s TAM is, and you can see the potential for massive catch-up. However, that isn’t going to occur in weeks or on a single earnings report, especially one where the company has just finally figured out its correct messaging. Bottom line, I’m not sure the numbers for Twitter will be much of a surprise and I do very much think they will continue to guide conservatively. That is also a new and very positive long-term change which finally just occurred last quarter. However, if Twitter can keep tapping into to it’s “non-logged” usage which is roughly 500mm a day and grow that to the point where Twitter’s combined audience grows from the current 800mm total to 1.0-1.2Bish… we have a powder keg to the upside. And that is what I think the long-term path of Twitter is. The last thought I will leave you all with is IBM’s Watson. Is there a more important data stream to Watson than Twitter’s? I doubt it. And that’s just one example. I find it interesting that no one even talks about the Twitter Data license revenue anymore. But it hasn’t gone away and keep growing at a very strong rate. Once this stream’s base is big enough, it will become another key value driver for the shares. In the meantime, I’ll still be selling rips and buying dips but will retain a large slug in my core holdings for what I still believe should be a multi-bagger move. P.S. — I’d add one more thing. I think we are very close to a peak FB, Instagram, Snapchat type moment. IE., where the use of fun but sorta useless and definitely time-wasting social media platforms starts to see materially decelerating growth. That usage growth might itself even turn negative. If that occurs and Twitter’s use stays steady or even starts increasing again, that could be a whopper of an “inflection moment”. Moreover, I’ve not even baked that moment/turn into my long-term case, but it’s something I’ve been thinking about lately. As to me it’s very similar to thesis to where I called “peak Android” and noted that I thought iOS would see a massive increase and uptake of usage back in 2013. And I definitely think it’s worth noting that I’m having the above thought more frequently of late. ********* This was a special bonus edition of Sean Udall’s TechStrat Report. Click here to learn how you can get Sean’s best stock picks straight to your inbox.
Continue Reading -->The Safety Dance Starts, but You Can’t Argue With Price
The yen is rising this morning on what looks like an advance “sell the news” reaction in advance of the Bank of Japan Meeting on July 28-29. Remember, the yen has been ripping all year: Most economists expect the bank to increase its ETF purchase prices, cut rates, and increase its JGB purchases, which could mean it’s all but priced in. The Nikkei is off -1.4% and most European markets are red. SPX futures are flat, and I’m surprised they’re not down more. Crude oil slumped under $43 and the key biotech sector is getting roughed up in the early going. Gilead (GILD), which is 8.1% off the IBB ETF, is taking a big hit on its disappointing earnings reports, and is off 4.3% in the early going. IBB is indicated down -0.9%. That’s not the end of the world, but we can all agree that things are just plain better when biotech keeps its act together. There have been 4 horsemen leading equities since the 2/11 low — biotech (IBB), oil, high-yield (HYG), and the Russell 2000. Biotech and oil are obviously feeling the heat. High-yield is closely linked to oil (since oil prices drive default rates on energy bonds). Here is a chart of the HYG ETF vs. crude oil over the past year: So we have 3 of the 4 in some kind of trouble. Therefore, keep your eyes on the Russell. If that starts giving up, maybe the bears will score a victory. Post-Brexit, they haven’t been been able to do much. I still see an April-May-style sideways grind for the time being. Markets are a little stretched and sentiment is positive, but you can’t argue with price. Frankly, with the yen up so much and oil now 15%+ from the high , I expected SPX futures to be down at a least a half-percent. But they’re flat. In other earnings news, industrial giant United Technologies (UTX) is up after beating. The economic calendar picks up a little bit today, with S&P Case-Shiller, Markit PMI, Consumer Confidence, Richmond Fed, and New Home Sales numbers coming. However, the big news comes after the close with Apple’s (AAPL) earnings report. Expectations appear to be pretty low, but remember, it takes a lot of money to move Apple, so they really need to deliver. Twitter’s (TWTR) also reporting, and given how much that stock has run since Microsoft (MSFT) bought LinkedIn (LNKD), it will be in close focus. Still not fan of that one. Good luck friends!
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