Twitter, Inc. (TWTR)

Growth tech names like $ZM $TSLA $SNAP $PINS $SFIX $TWLO $NVDA $TWTR etc. selling off for a simple reason. Powell saying that when the economy returns to normal so will inflation. This leads to strong fundamentals growth (booming economy) but rising rate environment. Rising rates hit DCF discount rates on growth stocks (all of the aforementioned names have huge multiples). This means the highest multiple stocks start coming back to reality. I've been rolling back into my highest conviction names. As fundamentals show their strength, the market will likely get over the temporary valuation correction and re-rate growth names higher. I'm not going long value tech ($INTC or $FB or $AAPL), I'm going to stick to what works. Long $PINS and $SNAP more specifically.

In order to understand why $SNAP is trading where it's trading (valuation wise), we have to understand the story and the long-term picture. Here it is (from a bullish perspective: $SNAP delivers comparable ad ROI returns to that of $FB and gets similar ARPU grab to $FB (~$45-$50/DAU annually). Keep in mind, $SNAP will likely drive far more advertiser value than $TWTR long-term while $TWTR is already monetizing at $16-$17/DAU annually.In addition, $SNAP continues to expand its international use as the rebuilt Android design draw in the international crowd. Keep in mind that $SNAP is still early-innings in many of these international markets, so there is a lot of room for expansion. So, let's value $SNAP. What's it really worth. Well, to understand that, let's try to think about where the business will be in a decade. Here are the numbers behind the narrative:

- ARPU of $45
- DAUs of 500mln
- Revenue of $22.5bln
- 87% gross margins ($6 of CoRPU, mostly infrastructure/revenue share, and content creation costs)
- ~$6 billion in OpEx (vs. ~$2.2B in 2020)

On the current share count of ~1.5B shares, 2030 $SNAP is doing ~$9/share in EPS. Assuming a 4% earnings yield (basically 25x earnings) for a high margin, high growth tech business, which is roughly in line with present-day $FB, then $SNAP can be worth ~$225/share in 2030. Discounting back at ~7%/year (low rate environment, moderating equity beta, low ERP) I'm at a 2022 year end PT of ~$125/share.

Now, I do admit $SNAP is mostly saturated domestically and in Europe in terms of usage. The real user growth opportunity is going to come from international (think Mexico, East Asia, Latin America, etc.) where purchasing power is lower, but Android is the predominant mobile operating system. In $SNAP's Analyst Day event they highlight the ways they are going to sustain strong engagement. At this point in time, $SNAP has differentiated itself enough from the competition that the risk of competition grabbing users is likely minimal. It's happened before, but $SNAP's platform has grown and evolved since then, adding new, entrenching features to retain and add users. In addition, because of it's privacy-centric and content-moderation lite structure, $SNAP will not incur costs that a $FB or $TWTR would from content moderation, meaning their operating margins could actually be much higher long-term than anything $FB or $TWTR is doing. At the end of the day, I'm focused on the long-term of this company. The biggest concern about this company is it's valuation. And believe me, I understand the concern. At ~15.7x '22 revenue, it's not cheap. Or is it? Let me break down my valuation for this business, and why it could generate so much more in returns than $FB or $TWTR.

As an addendum you can find easily, $TWTR EPS average estimates are as follows;

2021 - $0.88 per share
2022 - $1.13 per share

IF they hit average estimates, TWTR is 4+ more times overvalued than Facebook. $TWTR is not a new start-up but considered a decently long-in-the-tooth legacy tech company founded in 2006, now 15 years old. Can you believe it???

Hello all. I figured I would lay out why I'm a long-term bull on $PINS and why it is one of my favorite names within the social media advertising universe. First of all let's understand the value propositions for $PINS from both an advertiser and a user perspective:

Starting with the users. Users love $PINS because it's simply a different type of platform. This isn't a platform where the most engagement (likes, comments, etc.) wins (like $TWTR or $FB). It's an inspiration engine of sorts. If you want to get ideas for a vacation, or how to redecorate your house you use $PINS. $PINS is like an inspiration search engine. The more you show $PINS about what you enjoy on the platform, the more they can curate specific content to you. The social aspect is the exchanging of inspiration. This leaves users with a sweet taste in their mouth after using the platform, whereas $FB and $TWTR users tend to be more bitter after using the app (think of the crazy political discourse on those apps). The stats back it up: 47% of $PINS users have an intent to purchase vs. mid to high teens on other platforms. This isn't a social media platform, it's social commerce.

For advertisers: Users have high purchase intent, there is a lot of first party data that $PINS has on platform to better target and curate ads, and it doesn't have the PR backlash of advertising on $TWTR or $FB. Sure, you might not get the third party targeting, and the automated ad platform is still in the early innings, but the long-term value proposition for advertisers is there: 459 million people are looking for inspiration. Give it to them.

$SNAP has a tremendous opportunity out in front of it. Numerous years of ~50%+ revenue growth is enough to justify an even greater valuation in my opinion. Long-term we have an easy bull-case: targeting, ad platform, optimization, and Snap Ad analytics improve, enabling eCPM (ad pricing) growth. In addition, new streamlined product (five parts of Snapchat) enable new ad inventory to be opened up. This allows a lot more impressions per user (i.e. higher ARPU). In addition, lack of content moderation costs relative to platforms like $TWTR and $FB enables higher long-term margin profile. In my view, not financial advice WHATSOEVER, this couldn't be a clearer buying opportunity.

When the market makers realize inflation is very real (gas prices, bond yields, housing values, cost of consumer good, etc.) and the labor market is still weak, this will get ugly very fast.

We have already had two major tremors in a week. When the earthquakes comes, UGLY!

I am NOT talking specifically about $TWTR. No comments from Powell will help. They are already giving money out at basically no cost.

Those interesting in trading, not necessarily $TWTR as a company to buy and invest in:

- If the closing price is @ the low for the day (or a headfake next to it), look for a string of down days
- Make money up or down, it's your money, it is not a religion
- Aside: The Golden Globes was not good for $TWTR, unfortunate for the brand

From THE $TWTR. Does that mean a loss or am I missing something???

"For Q1'21, we expect:

Total revenue to be between $940 million and $1.04 billion
GAAP operating income to be between a loss of $50 million and break even"

My rough estimate is that $TSLA bought $BTC at $45,000 range x 33,333 $BTC.

With $BTC at $44,000 now, $TSLA started losing money on it.

For $TWTR, they are already in red - losing millions of dollars in $BTC.

I would like to offer predictions today.

Big tech’s dominance is finally over. Their decline began in 2020 and in a few short years they’re going to be in a free fall as the public confidence in them rapidly erodes. A major realignment will take place and MICROSOFT is going to emerge as the dominant leader because of a spectacular growth in its revenue and profitability. Coupled with the fact that CEO Nadella is a level headed person focused on Microsoft’s growth and not activism, investors will see the value in its stock. I believe even more investment will flow into the $MSFT stock starting this year.

My prediction for other stocks:

1 Investors will start realizing that $AMZN’s valuation is significantly higher than its peers. I believe the stock won’t surpass the ATH it saw in 2020. It is quite likely that the stock price may decline during 2021.

2 $AAPL stock will likely grow higher during 2021, but its high flying days are over. Apple car is just a concept and it will be several years before a physical product is launched. In the meantime, Tesla Cybertruck and a possible low priced car may already be in the roads, thereby making Tesla the undisputed leader. It will be very difficult to penetrate its market. I see no innovation from Apple and investors will see that too.

3 Stocks like $GOOG, $FB, $TWTR will likely stagnate and commence MASSIVE declines. I expect that regulations by governments around the world will act as catalysts to their decline.

4 Other tech stocks like $WDAY, $NOW, $CRM will likely have more realistic P/E.