Wednesday, January 5, 2011

"There are two absolute must have positions - Facebook and Twitter!"

Amazing blog post from the Wall Street Journal about a vehicle being formed to invest in Twitter stock at a valuation of $4.1 billion. Here's a quote from the "the table-pounding, hard-sell email sent to potential investors":

"If you do not own stock in Twitter already it is a must. If you already own Twitter you need to add to your position.  There are two absolute must have positions - Facebook and Twitter!  This is the first Twitter stock we or anyone else has had in the past six months and like Facebook it will continue to trade up in price rapidly!"
That is fantastic. Future hall of fame material.

Notice the lack of any valuation metrics in the public discussion of Twitter and Facebook. Just pure momentum, "what goes up must go up" enthusiasm. 

Raise your hand if you think this ends with the Twitter investors looking back on a $4.1 billion valuation as a cheap entry point.

8 comments:

Eric said...

Who knows, perhaps people putting money there will end up making a profit.

Notice the lack of any valuation metrics...

That's not always the most important thing, especially if you know what limit and stop orders are, and how to use them.

Look at BYD today. Up almost 10%. Maybe all of the 297k newly employed will be spending their paychecks at casinos.

Sold the Jan BYD 9 puts at the beginning of December for a very good price, so I'm hoping this ridiculous trend continues. You know what they say about one being born every minute.

Taylor Conant said...

Dateline September 24th, 2009:

http://thejungleiseverywhere.blogspot.com/2009/09/twitter-economy.html

CP said...

CHinese exports:
solar cells, electric cars, smartphones

U.S. exports:
tweets, hot air, unjustified confidence, imperial violence

Eric said...

Who knows? Maybe the money they're putting into that crap will turn a profit.

Notice the lack of any valuation metrics in the public discussion of Twitter and Facebook.

Sometimes they're not the most important thing. Especially if you know what limit and stop orders are, and how to use them.

Check out what BYD is doing today. Up nearly 10%. I guess the expectation is that all those 297,000 newly employed people will go blow their paychecks in casinos. But I sold the Jan $9 puts at the beginning of Dec for a very good price, so I for one hope that ridiculous trend continues. You know what they say about one being born every minute.

CP said...

Dude are you kidding me?

We are back to valuation metrics are not important? We are back to Jim Cramer ca. February 2000?:
http://www.creditbubblestocks.com/2007/04/james-j-cramer-mad-money-indeed.html

Has the whole world gone crazy?

P.S. I don't think you can use a stop loss order on special purpose vehicles set up to invest in Web 2.0 companies.

Eric said...

I said:

Sometimes they're not the most important thing.

And I did mean the "sometimes" part literally. Especially if you are just looking for a profitable trade, and not an 'investment'.

Taylor Conant said...

This story just got 1million times better:

Interest in shares of Facebook Inc. is so strong that Goldman Sachs Group Inc. plans to stop soliciting interest from potential investors on Thursday, after the securities firm received orders of several billion dollars, according to people familiar with the situation.

"It's a blowout," one Goldman employee told an investor who has considered trying to buy Facebook shares on behalf of a client.


From WSJ.com

CP said...

OMG. This warrants a front page post.