I’ve mentioned before that with a small part of my portfolio, I like to invest in individual stocks. In fact, some may say that it more speculation than investing. In the past few months, I’ve written about investing in SodaStream and IBM. Both have had their ups and downs. As of today, I’m up around 12% on each of them. Not bad for a few months.
Yesterday, I decided to get into Twitter. I should say, get more into Twitter. I had already bought a few shares at around $47, so buying more at $37.50 serves to dollar cost average me down to around $41. When I buy a stock, I send a little note to Evan at Million Dollar Journey. We have good discussions. He made the great point that Twitter feels like 1999, they don’t make a profit. I couldn’t argue with any of that.
In fact, many of the same arguments were ones that came up when I wrote about Twitter’s IPO.
My counter argument may not have been very strong. I suggested that other tech companies have gone from earning no profit to being very profitable. There’s an Ebay.com to counter Pets.com. Twitter feels more like an Ebay to me. When I watch a television they are using hashtags. When breaking news about the Patriots is coming down the pike it’s from Adam Schefter’s Twitter account. Celebrities have bought into Twitter and that’s incredibly powerful and valuable.
I hate when people talk about “intangibles”. I’m going to have to settle for punching myself in the throat, because the intangibles are huge with Twitter.
The problem I had with Twitter was paying for it when it was a $46 billion dollar company. I have much less of a problem when it is a $21 or $22 billion dollar company. It very well may turn out that I should have paid $10 for a shirt, but it feels better to pay $22 than $46. (Hopefully, I didn’t lose too many readers there.)
I understand that Twitter got a lot cheaper because it didn’t grow users as much as people had hoped. On the other hand it seemed to grow revenue more than expected. That’s got to count for something, right?
So where do you stand? Is Twitter a buy now?