Seeking Alpha

Internet momentum plays rally like it's September

  • Though still generally below their mid-October highs, Internet momentum stocks are turning in what might be their best performance during a rally that has now lasted two weeks. While Twitter (previous) is the star of the show, Facebook (FB +3.5%), Yelp (YELP +1.8%), Groupon (GRPN +4.7%), Netflix (NFLX +2.1%), LinkedIn (LNKD +1.4%), and Pandora (P +3.4%) aren't getting left out.
  • Several Chinese Internet names are also higher. In addition to Baidu, which is benefiting from a bullish Pac Crest note, Sina (SINA +6%), Ctrip (CTRP +6.1%), Qunar (QUNR +6.3%), and Youku (YOKU +3.9%) are staring at big gains.
  • Morgan Stanley's Scott Devitt is out with another bullish note on Groupon. Devitt notes an MS survey of 358 SMBs found only 26% of merchants have run Groupon deals in the last 12 months, something he thinks suggests there's "a long run way of merchants" that can still be signed up.
  • He also sees room for Groupon to improve its customer targeting - the company still isn't able to track which deals were shown to customers, or were clicked on, in prior e-mails - and expects its new site (allows deals to be browsed without an e-mail address being given) and a revamped e-mail layout to boost growth.
Comments (2)
  • Esekla
    , contributor
    Comments (2295) | Send Message
     
    One explanation for this might be window dressing, though it's a little early for that. This article looks at the longer term fundamental market dynamic that's behind the rise in some of these stocks and which ones might just grow into their valuations:

     

    http://seekingalpha.co...
    10 Dec 2013, 01:46 PM Reply Like
  • gwynfryn
    , contributor
    Comments (3886) | Send Message
     
    If Groupon, after all the hoo haa, has only signed on 26% of merchants, that suggests to me that there's an opening here for someone else to come up with a way of doing it better...
    11 Dec 2013, 09:11 AM Reply Like
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