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Thomas Almond
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I have been retired for over ten years. I did the online poker thing, but got tired of it after three million hands, so I have decided to take my poker bank and make a serious stab at playing with stocks. I have been in and out of the market for 15 years, but this is the first time I have ever... More
  • TWTR Will Be Under $30 In June. 2 comments
    Jan 7, 2014 5:32 PM | about stocks: TWTR

    I swear it has becoming increasingly difficult to tell the difference between shameless day/swing trade "Pump and Dumpers" and delusional Twitter (NYSE:TWTR) investors suffering from "gold fever".

    No one in their right mind can honestly make a valid argument that TWTR is trading at this valuation because of some "years down the road" potential given what we know about how this IPO was done with such a small float to make the stock easily manipulated in either direction. The steady stream of media hype to go with it tells you that some very influential forces are behind this pump and dump scam.

    The only type of person who would consider buying TWTR at the current price to hold long would have to be the type of person who would fall for one of those Nigerian e-mail scams.

    Everyone I know that is bullish about TWTR on StockTwits is glued to their trading platform all day every day making sure they are ready to pull the plug and dump the shares on a moments notice. Some of them began exiting last Friday. The smart ones did anyway. Others are just day trading it. Today they got burned. Playing TWTR as a Bull is like playing musical chairs. The music will stop on a moments notice. When it does there will be a great many bag holders wishing they had not been so greedy.

    Earnings will be an exercise in damage control. The question to be answered is how much they lost. Not how much they made, but in the end the only thing the Bulls will talk about is the revenue. Not the expenses. Profits have never existed with TWTR and that fact must be ignored to inflate the share price and keep it up long enough so that 10's of millions of the 450 million currently locked shares can be dumped on the market for far more than they are worth. That process will begin February 15th and end sometime in May.

    Twitter will give their quarterly earnings report on February 5th, but what most people will not realize is that the revenue numbers will be padded with the Holiday Seasons advertising sales which accounts for nearly a 1/3 of the yearly advertising revenue. It was a smart decision to time TWTR's first ER to coincide with the 4th Quarter of the year which has ALWAYS been their bumper quarter. It will make them look much better than they really are and the Bulls will try and pump their dump with it. Of that you can be sure.

    Making matters worse is the fact that they will use NON-GAAP accounting methods to hide as much of the reality as they can get away with. In particular the Bulls blinded by greed will completely ignore the expense of the compensation packages that will inevitably lead to significant shareholder dilution taking the current 545 million share float up to 705 million.

    Wait until June to buy shares. You will likely see TWTR below $30 per share.

    Disclosure: I am short TWTR, .

    Additional disclosure: Additional disclosure: Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security.

    Stocks: TWTR
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  • Thomas Almond
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    Author’s reply » Secret edits Twitter made to its IPO filing, hoping investors wouldn’t notice. http://bit.ly/1lOJ0ES
    8 Jan, 04:17 AM Reply Like
  • Thomas Almond
    , contributor
    Comments (363) | Send Message
     
    Author’s reply » The problem with the tech utopianism of the 1990s wasn’t the utopian part; it was the speculative bubble. In that respect, the problem with tech in the 1990s wasn’t the technology. It was instead a toxic mix of pop culture and Wall Street that produced such overweening, Tulip mania-valuations.

     

    Twitter itself may be a fad or a transformative force, but it requires some thick ideological blinders to not see that It doesn’t come without excess, nor without leaving initial investors burnt.
    8 Jan, 04:27 AM Reply Like
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