Stocks - The Best Buys 2

[Fuzz]

Originally Posted by Tiger

It was definitely a buy options when it dropped. Its a hard decision as even if it has good fundamentals, market thoughts could cause swings on a stock like this. Even now I don't know whether it will go up or down once they start an ad based stream and crack down on sharing.

maybe as for next like a netflix stock, it is all the tech stock that is knocked down and has better valuations, I hate to say it, but a stock like Meta could be something to look at even though nobody really likes them now (maybe because no one likes them).

Even if I agreed, I just couldn't do it. But I think they have a lot more pain to roll through. Where is the upside? The Metaverse is not going to be a thing, so new products are questionable for revenue.

The youths have no interest in it, growth has really slowed(and does anyone really believe 3.84 billion people are monthly active users? Half the Earth's population? Sounds suspicious. So growth is out.

It seems they've maximized advertising dollars, so not much there...I just don't know where an upside is.

[bizaro86]

Originally Posted by Fuzz

Even if I agreed, I just couldn't do it. But I think they have a lot more pain to roll through. Where is the upside? The Metaverse is not going to be a thing, so new products are questionable for revenue.

The youths have no interest in it, growth has really slowed(and does anyone really believe 3.84 billion people are monthly active users? Half the Earth's population? Sounds suspicious. So growth is out.

It seems they've maximized advertising dollars, so not much there...I just don't know where an upside is.

I mean, I don't own them but there are 3 really obvious levers they could pull to increase profits.

1) stop spending on metaverse. That would lower expenses massively and the market is giving them 0 credit for it working.

2) monetize Instagram

3) monetize whatsapp

[Tiger]

Originally Posted by bizaro86

I mean, I don't own them but there are 3 really obvious levers they could pull to increase profits.

1) stop spending on metaverse. That would lower expenses massively and the market is giving them 0 credit for it working.

2) monetize Instagram

3) monetize whatsapp

Even just cutting headcount would increase profit margins

[Fuzz]

Originally Posted by Tiger

Even just cutting headcount would increase profit margins

Ya, they just announced that a month ago

https://www.bloomberg.com/news/artic...-restructuring

The stock jumped a bit on the news, but is back down. Cutting the metaverse? That might actually move it a bit. I don't even know how you spend $100 billion on what is essentially a piece of software(they already have the hardware). That's a lot of developers.

[Strange Brew]

If you're craving large cap tech, MSFT looks better to me. Their cloud offerings are hot and should only grow when IPO's come back. Dynamics is a great small cap offering.

Netflix at today's price makes much more sense than Meta too IMO. I just don't see anything with Meta that screams long term value and not going to buy based on hope they radically change their plans.

But honestly I still want to know what is next for Fuzz after nailing Netflix timing. This time I want to know as you're doing it, not six months later.

As for me, I added some UNH this month. Seems like it will ride out this uncertainty fairly well with a little dividend kicker.

[Fuzz]

Well next time I plan on throwing some money away, I'll let you know and you can join in. And I don't think I nailed the timing. I would have been better waiting for it to drop more, which it did.

[Table 5]

Definitely not a great day for Meta. Missed earnings, and currently down 12%+ after hours.

Instead of wasting billions on the metaverse, it would probably be a better use of money lobbying the US government to ban TikTok.

[zamler]

AMZN is tanking ~15% in after hours dragging down other stocks with it. Can someone explain why a current TWTR shareholder would sell today? Don't we simply get the buyout price? Or is selling a move to defer taxes?

[Table 5]

The FAANGs are definitely having a rough time right now. Good thing at least Apple had ok, if not necessarily great, earnings today, otherwise it would be even worse. Even so, I wonder if this will be the catalyst for that final move down...these stocks are in pretty much everyone's portfolios and a huge part of the index.

[Fuzz]

Originally Posted by zamler

AMZN is tanking ~15% in after hours dragging down other stocks with it. Can someone explain why a current TWTR shareholder would sell today? Don't we simply get the buyout price? Or is selling a move to defer taxes?

I'm not sure how it works, maybe there is a delay for when the sale goes through? You take a small haircut on the price, but get your money now.

[DoubleK]

Originally Posted by zamler

AMZN is tanking ~15% in after hours dragging down other stocks with it. Can someone explain why a current TWTR shareholder would sell today? Don't we simply get the buyout price? Or is selling a move to defer taxes?

It was down 20+ right after they announced.

Will be interesting to see what they open at tomorrow.

I don't own any tech outside of index ETFs, but a good friend has made a ton of cash playing options before earnings.

[bizaro86]

Originally Posted by zamler

AMZN is tanking ~15% in after hours dragging down other stocks with it. Can someone explain why a current TWTR shareholder would sell today? Don't we simply get the buyout price? Or is selling a move to defer taxes?

The majority of Twitter shares are in the hands of merger arbs right now, many of whom are sitting on huge profits. These are funds that try and earn low volatility, low correlation-to-the-market returns. In a year where the averages are down big one big win has the potential to make your year, and make fund raising next year easy. Locking that in just in case Elon does something insane in the next couple of days makes sense for that constituency.

[zamler]

Originally Posted by DoubleK

I don't own any tech outside of index ETFs, but a good friend has made a ton of cash playing options before earnings.

That's over my head I'd be very poor if I tried it.

Originally Posted by bizaro86

The majority of Twitter shares are in the hands of merger arbs right now, many of whom are sitting on huge profits. These are funds that try and earn low volatility, low correlation-to-the-market returns. In a year where the averages are down big one big win has the potential to make your year, and make fund raising next year easy. Locking that in just in case Elon does something insane in the next couple of days makes sense for that constituency.

The insane thing was buying Twitter don't think anything crazy will happen now. I made ~35% can't complain.

[bizaro86]

Originally Posted by zamler

That's over my head I'd be very poor if I tried it.

The insane thing was buying Twitter don't think anything crazy will happen now. I made ~35% can't complain.

I agree. I was just trying to explain the thinking behind those who are likely selling in size.

Making the last little bit will make no difference to a fund's results (the big jump from when the transaction was in doubt makes their whole year), whereas a deal break would wreck the whole year for an arb fund.

[opendoor]

You also get cash instantly if you sold Twitter today, whereas it can take up to a few weeks to get paid after trading is halted. So even if the deal was 100% guaranteed to go through, giving up 10-20 cents of share price to get your money now can make sense if you have somewhere else to deploy your cash in the interim.

[CASe333]

Originally Posted by zamler

AMZN is tanking ~15% in after hours dragging down other stocks with it.

I'm curious if anyone can explain how AMZN drops from $110.96 at closing immediately down to $92 after hours?

I have a basic understanding of how stock trading works. Is it normal for such a huge swing after hours? I guess I just don't even know how its possible for this huge of a swing to happen in 5min of trading let alone after hours.

[Slava]

Originally Posted by CASe333

I'm curious if anyone can explain how AMZN drops from $110.96 at closing immediately down to $92 after hours?

I have a basic understanding of how stock trading works. Is it normal for such a huge swing after hours? I guess I just don't even know how its possible for this huge of a swing to happen in 5min of trading let alone after hours.

Well I wouldn’t say it’s normal for a company of that size to decline that much. But, they reported earnings after the bell and provided guidance that they were expecting a slowdown, so the after hours trade wasn’t kind to them. Sometimes the moves pre/post market are exaggerated or non-indicative of the opening hours. There are less trades and lower volumes, so it takes less to move things.

[bizaro86]

Originally Posted by opendoor

You also get cash instantly if you sold Twitter today, whereas it can take up to a few weeks to get paid after trading is halted. So even if the deal was 100% guaranteed to go through, giving up 10-20 cents of share price to get your money now can make sense if you have somewhere else to deploy your cash in the interim.

That timeframe isn't likely to be the case for the majority of arb investors who would have quality prime brokerage. Retail investors, sure.

[CASe333]

Originally Posted by Slava

Well I wouldn’t say it’s normal for a company of that size to decline that much. But, they reported earnings after the bell and provided guidance that they were expecting a slowdown, so the after hours trade wasn’t kind to them. Sometimes the moves pre/post market are exaggerated or non-indicative of the opening hours. There are less trades and lower volumes, so it takes less to move things.

So they provided a report saying they weren't meeting earnings and immediately there was a sell-off within 5min. But why did it almost immediately drop to the low? I'm looking at after hr trades and price dropped almost immediately. Why wouldn't it drop more incrementally with time? Even a volatile stock like TSLA doesn't move like this.

[Slava]

Originally Posted by CASe333

So they provided a report saying they weren't meeting earnings and immediately there was a sell-off within 5min. But why did it almost immediately drop to the low? I'm looking at after hr trades and price dropped almost immediately. Why wouldn't it drop more incrementally with time? Even a volatile stock like TSLA doesn't move like this.

It’s because the sellers cut their asks quickly to get out of the shares. If they really want out, they can do that or sell at market and get the shares sold. Depending on your system, you can see the trades lined up, so you can make sure to get an order filled by cutting the price. It will bottom though, because buyers will come in and take shares at a particular price that they think is a good deal.

Basically, you’re seeing the price discovery mechanism happen in real time and it happens fast.