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Alex Cho

 
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  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    Yes, but that moat is quickly being contested by Amazon. Granted IBM is developing a lot of business to business applications that have market potential to overcome the obstacles of a dying data center/hardware business.
    Feb 26 04:20 AM | 1 Like Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    In the future, if in the case WhatsApp continues at its current growth trajectory, the value on that future stock will go up based on a confirmation of its historical trend. Therefore your entry point is now, when the stock is priced less, or more when it's valued at more, based on more potential. That's the way markets work, hence everything trades at a premium on the assumption that earnings will continue to be generated. This is why a stock trades at 15 times earnings, because we expect a certain pay-off, when factoring in growth that will be sooner than 15 years. It's not hard to imagine, that a company that could double the growth of a 15 P/E stock meriting a higher valuation.

    If we sit back too long we miss it. If we hang on to long, the rocket runs out of fuel and sinks back to earth. The stock market is a tough environment, that's for sure.
    Feb 26 04:18 AM | 1 Like Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    To measure probability we would need to base it on a sample that be repeated. Unfortunately companies can't be turned into a lab experiment, where we stick them into a system, repeat the process, and see how many fail or succeed. Because of that fact, I can't make a probability, but I will offer a more precise forecast using all of the feedback I have received from you all.
    Feb 26 04:14 AM | 1 Like Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    I would never extend a graph beyond its feasible region.
    Feb 26 04:11 AM | Likes Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    You wouldn't buy a smartphone if you don't get access to internet. To get data, you need to buy all the lower tier services first. Whether they're free or not is irrelevant. No one is using WhatsApp to avoid the cost of mobile SMS, because mobile SMS is a sunk or an unavoidable cost.
    Feb 24 03:52 AM | Likes Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    Buying out Groupon would have made sense. Motorola was a disaster because Google wasn't a hardware company.
    Feb 24 03:51 AM | 2 Likes Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    Yeah, Facebook is one of those companies that owns web properties that have both the engagement and user figures. If you can win attention span, you've got a legitimate mobile product.
    Feb 24 03:50 AM | 1 Like Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    Guys, it doesn't matter if telecos offer SMS for free. Because it will always be bundled with data and minutes. Telecos can't risk losing mobile subscribers. So to get data you need to buy the minutes and the SMS first. This is why every telco has average monthly revenue in the $80s. Because they structure the mobile plans to only have any value to the user at prices beyond $80.

    The reason whatsapp is appealing is because it allows people to communicate with each other with just data. Telecos will never offer data by itself, unless for other computing form factors. With wearable computing on its way, text messaging will be considered an obsolete way of communication (sort of like the pager). This is because people want to communicate at all times and text messaging is no longer the primary way to communicate anymore.

    Buying WhatsApp gives Facebook the opportunity to own one of the largest networks for communication based on digital internet and not on radio waves pertaining to older phone technologies. This has much more value to Facebook shareholders. It's a bit of a gamble but the payoff is much higher and the loss can be recouped within a reasonable time frame if in the event of asset impairment.
    Feb 24 03:44 AM | 2 Likes Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    Religious, I analyze telcos. Let me tell you something, SMS is not free, data plans are bundled with text and minutes. You get SMS when you get data. There's no avoiding paying for the carry-on service. The added benefit is miniscule. The only real reason people like using third-party messenger apps is because you can communicate with any web capable device.

    Telcos will never make sms free. It will always be included in a bundle with data.
    Feb 24 03:38 AM | 2 Likes Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    If the barrier of entry is so low, I encourage you to try and program a similar app and attract 450 million people, good luck.
    Feb 24 03:33 AM | 2 Likes Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    I'm not going to take your threat of exiting a service very seriously. By 2020, I also estimate that Whatsapp will be the only third party service that allows for messaging between 3-4 billion people. The value of a network that well connected to an average user is unquestionable especially when factoring in the pricing on long distance calls and texts. Also when considering the average person will have more than 10 devices by the year 2020 a messenger app is vastly more efficient than text messaging.
    Feb 24 03:31 AM | 1 Like Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    It doesn't matter, because telecos are also an oligopoly, resulting in low downside from churn. Usually postpaid subs increase for all the competitors in a space as a result of organic growth. Granted leaders in the space tend to experience better margins.
    Feb 24 03:27 AM | Likes Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    So you're deleting an app that's going to charge you $1 per year?
    Feb 23 08:47 PM | 1 Like Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    Growth investing is about future potential. Value investing is about present value. I'm pure momentum. So, I don't think we'll ever truly agree with each other on what the value of a company is.
    Feb 23 08:46 PM | 4 Likes Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    Ashraf at ARPU of $12 per annum on 4 billion mobile users it's a feasible figure. Granted, WhatsApp could price itself higher to reach that projected value.

    $50 billion sounds like a lot, but when compared to TAM of mobile telecom, or global GDP, it's not that much. A service that can get near saturation of the global internet population doesn't need to generate that much in sales per user to drive meaningful bottomline growth.
    Feb 23 07:10 PM | 6 Likes Like |Link to Comment
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