Meet The Twitter Investor Who Could Be Trading It Better Than Anyone Else
Lauren Holmes, ex-prop trader and co-founder of the newsletter starbreakouts.com was “one of the top Market Prophits by returns in the last two weeks for TWTR,” Gonta said.
Benzinga managed to get in touch with Holmes, who provided some additional comments on Twitter.
Valuation And Expectations
When questioned about Twitter’s stock, Holmes responded: “While current valuation at 11 times the company’s sales/enterprise value looks expensive, the reality is that the market’s expectations for this stock are very low.”
She highlighted the importance of the company’s real potential versus market expectations.
“What I like is that Twitter is in early stages of monetization; it just recently started monetizing its user base,” she added. “Therefore, they are launching new products just now, and starting to monetize...Twitter just introduced video into its platform. This opens a lot of different possibilities going forward.”
She went further: “Twitter will continue to monetize its user base. So, what I like about the stock is that, even though it looks expensive, expectations are low, but the real potential it has is enormous. Everything from video-ads to text-ads, group messages…everything has potential.”
Holmes did not want to give away her strategy on how to play earnings, but did say that she wouldn’t play a spread (calls and puts), because “the implied volatility is higher than I would like it to be.
"However," she added, "I wouldn’t focus on earnings so much, but rather on the long-term. With monetization in early stages, sales have nowhere to go but up.”
Is Twitter The New Facebook?
Twitter’s case is pretty similar to what Facebook Inc (NASDAQ: FB)'s once was, Holmes added, “before rising from $20 to almost $35, when expectations in general were very low.
"Once the company reported healthy earnings, after some changes it made in relation to user monetization, the stock rocketed from $35 to $78 in less than two years.”
Twitter recently traded up 1.5 percent during Thursday afternoon trading.
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