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Paramita Bannerjee
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Paramita Bannerjee was born and raised in Kolkata, India. Having graduated from the ICSI, she was all set for a career in corporate governance but got drifted to finance and investments. She ventured into the world of stocks while in her internship with an accounting firm and has been addicted... More
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Technical Analysis
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  • Why Investors Should Watch Out For Twitter

    When the much hyped IPO of Facebook (NYSE:FB) bombed last year, few would have thought that the Twitter (NYSE:TWTR) IPO could lead to the kind of frenzied debut that Twitter generated last Thursday, November 7.

    Twitter provided an initial estimate of $17 to $20, then revised it upwards between $23 to $ 25 and finally at $26 on Wednesday, November 6. That the IPO was a huge success, it was beyond doubt as investors were asking for 30 times the number of shares on offer. On Thursday, the stock opened $45.10 (up 73.5% its offer price) then hit a high of $50 (up 92%) and by midday it was trading at $45.15 (up 73.7%)

    The opening price valued the shares at 22 times forecast FY14 sales compared to its earlier modest estimate of 11.8 times. This would drive the company's present market value to over $ 28 billion as compared to its previous estimate of $13,6 billion.

    The IPO was valued at $14.1 billion which could go up to $ 14.4 billion if Goldman Sachs (lead underwriter to the issue along with Morgan Stanley & JP Morgan Chase) chose to exercise the full over allotment. In that case it would become the second largest IPO among dot-com companies after Facebook at $ 16 billion

    For a newly listed stock, there is not enough material for a technical analysis, but fundamentally, here is a look at the pros & cons

    The first factor to weigh down the stock is that at present it is a loss making company. In Q3 2013, its net loss widened to $64.6 million as compared to $21.6 million in Q3 2012. The company has big ideas to push as CEO Dick Costolo told CNBC in an interview. For that it needs to incur massive expenditure on advertising. The $1.8 billion (which could go up to $2.1 billion if the full over allotment option is exercized) it raised in this IPO could not have come at a better time.

    But the non financial data looks positive. In July 2009 according to Global Web Index (GWI), Twitter had just 35.47 million monthly active users across the markets covered at the time. Q4 2012 shows that the number of active Twitter users grew 40% from Q2 2012 to Q4 2012. This is equal to 288 million monthly active users (claimed to have used or contribute to Twitter in the past month) across the 31 markets currently researched by GWI (representing nearly 90% of the global internet population aged 16 to 65). That marks a whopping growth rate in active users of 714% since July 2009.

    In Q4 2012 about 21% of the global internet population now use Twitter actively on a monthly basis and about 36% of the global internet population have an account, equal to 485 million compared to 32% or 408 million in Q2 2012. This means meaning growth in accounts was slower than that of active users in the period. As per GWI estimates about 59% of account holders are now active on a monthly basis, up from 50% in Q2 2012.

    Also, the way people are using Twitter is changing. Besides being a passive source of discovery, users are using twitter professionally rather than a pure social networking tool. As per GWI data only 51% of active users have tweeted (posted a tweet) in the past month. This means that half the active user base is just reading, reacting.

    Recent years have seen stagnation in the growth of Twitter usage in the US, with growth centered on the emerging internet markets such as Brazil and Indonesia however this trend reversed in 2012.

    2012 has seen the US top the growth of active usage behind Hong Kong, growing a staggering 94% to 33.8 million active users and 59 million account holders in Q4 2012. GWI research identified three key reasons behind this reversal:

      1. Mobile Devices: In 2012 active mobile internet usage expanded from 37% to 43% of US internet users and tablet from 8% to 18%. Also as 31% of US mobile users are now on an iOS device, deep Twitter integration into iOS was a game changer (as reflected in the mobile growth above).
      1. Older Demographics: : Active usage grew 116% between Q2 and Q4 2012 while active usage among 45-54s increased 81% in the same period. Twitter proved to be the fastest growing social platform to an ageing population.
      1. Mass Media Integration: The exposure provided by TV, films, radio, sports and advertising is translating into more users giving people the reasons to use Twitter instead of just as a social networking tool.

    The challenge for Twitter is to understand and be aware of how any given audience engages with the service. As per GWI data, active Twitter usage ranges from 6% in Germany to 51% in Saudi Arabia. This sheds light on the nature of the target audience who are active and the type of brands for which it would be relevant.

    This present euphoria surrounding the stock might die down a bit in the next couple of weeks that follow and if it does investors would do well to buy the stock

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Tags: TWTR, long-ideas
    Nov 11 5:13 PM | Link | Comment!
  • TCS Rated As Top Employer In Europe

    Country's largest IT bellwether Tata Consultancy Services (NYSE:TCS) has been recognized as best employer in Europe for 2013 by the CRF Institute.

    Acknowledging its accomplishment, TCS in an official statement said, "The company was chosen as first among the final 20 companies participating at a continental level."

    Based in the Netherlands, the CRF Institute is an independent HR assessment and acknowledgement firm that identifies top performers in this field worldwide. Besides, TCS has also been facilitated for its contribution in the categories related to outstanding working conditions, training and development, career development, cultural management and company culture.

    Source - TCS

    Mar 30 1:27 AM | Link | Comment!
  • TCS Becomes ‘Leader' In Sustainable Technology Services

    IT major, Tata Consultancy Services Ltd, said that it has been positioned as 'Leader' in Sustainable Technology Services by specialist energy, environment and sustainability analyst firm Verdantix. TCS is ranked as a Leader as a result of the company's expertise in manufacturing plant energy systems, renewable energy systems, residential smart meters and data centre energy management, the company said in a filing to the Bombay Stock Exchange. Moreover, TCS has invested significantly to build on its strong track record in corporate sustainability. It has also created a dedicated sustainability practice. During the last 12 months the company has enhanced its energy management and environmental capabilities in numerous specialist areas.

    Source - TCS

    Mar 30 1:16 AM | Link | Comment!
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