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Stock Picking - Straight Gambling

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Update - sold 40 at .29 yesterday so I have 40 at open today. Earnings disappointed so it's gonna be a terrible day, gonna liquidate the position today for a pittance. 1160 + 460 +todays cash. Not the winfall I wanted but doubled up at least. Oh well.
 
Very good MF. I don't feel strongly about AAPL either way. There is rampant speculation among financial professionals and the HF community that they will institute a 2-3% dividend and potentiality a special div. In the short term this will of course pop the stock approx the total real value of the payment. In the long term, what you care about, it will suppress volatility in the stock. If I were you and you enter the trade I would add to it should they pay a special div. Good luck man!
 
MonkeyF0cker
Will be trading a 2-year leaps bear spread on AAPL tomorrow.
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I hope you might have waited to trade this or if you did I hope you are thinking about adding at these levels. Even when selling the further downside put the premium right now (and was Weeks ago) is quite large with implied volatility in the name far outstripping implied vol in the SPY derivitives. These levels are ridiculous. There is a customary drop after product launch to look forward to.

What do you think about putting similar put spread leaps trades on with Yelp, Groupon, and even LinkedIn. These businesses have NEVER posted a profit, are fairly debt laden and really are these sustainable models beyond their ability to advertise?
 
Today's dividend announcement is good news for you assuming you are equally weighted on the long and short puts so the actual payment of the div is equal to your receipt. The div should keep the stock price suppressed and it might be a recognition that the company cannot continue to post growth as is traditionally thought to be required for high stock valuation in the technology sector. Think of when Microsoft started to pay a dividend, the stock price languished between previously unseen levels and remains there today. It might not signal a break to the downside anytime soon but it will certainly curtail the meteoric rise.

Of course it will probably sail today. I know you are not (nor should you be) concerned with day-to-day vacillations in stock price but the div makes it eligible to be owned by tons of mutual funds and other institutional. Similar to when BRK-B split and became S&P eligible today people will finally be able to own, and own they will.
 
I haven't looked at fb really. I dont think it will be wildly successful at monetization, but the sheer size of users is frightning.. Most likely it is a sell after popping on day 1, but im gonna steer clear.

Also its hard to tell what the price action means with this new class of tech ipo. The float, or total shares outstanding, is purposely kept very small by the underwriters creating distortion in the trading. First trade, who knows. It will close over $60.
 
CNBC was dogging FB yesterday. They had a poll of users that stated that pretty much nobody will click through their ads, trusts them with personal information, or trusts them for e-commerce...

The trouble with sites like these is always how to generate revenue. Are the 10% of all users that EVER click on ads enough to float them? Certainly, there is a great number of users out there so perhaps it is, but I kind of doubt it longterm. The big question that I would have prior to investing in them would be what other avenues of revenue they are exploring.
 
People are absolutely clicking on those ads. CTR is nothing special, but the audience is a lot more targeted than with other media. Companies like ours do not hesitate to send boatloads of cash to FB just to increase the fanbase on our business page.

They also take a big cut of all in-game purchases. That has to be a significant portion of their revenue.

I think that's their two revenue streams.
 
Matty
People are absolutely clicking on those ads. CTR is nothing special, but the audience is a lot more targeted than with other media. Companies like ours do not hesitate to send boatloads of cash to FB just to increase the fanbase on our business page.

They also take a big cut of all in-game purchases. That has to be a significant portion of their revenue.

I think that's their two revenue streams.
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I'm sure there are quite a few people who do click the ads. However, as a percentage, it was dreadfully low. Keep in mind that was probably just a U.S. poll as well. And perhaps that's where they can generate more revenue in the future. They already have targeted ads and there isn't much more that I can foresee them doing in the way of technology to boost the awareness to users. They're already (perhaps past) the height of their popularity. Who doesn't have a FB account? The only real way to generate more revenue would be to encourage more interaction and instill trust in users to use them as a hub for commerce. However, they essentially have to rely on the rest of the marketplace to fall in line and rely on them for traffic unless they plan on warehousing their own products and/or they plan to directly compete against other established entities on the Net like eBay, Amazon, etc.
 
I dunno. The next logical step for them seems to be: go all-in on mobile. Stop being just an app. Maybe transition to a global-content-delivery-platform la iOS/Android, come out with a proprietary phone/device. Instagram purchase seems to be hinting at that.

:dunno:
 
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