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Why This Hedge Fund Won't Invest In Twitter

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Why This Hedge Fund Won't Invest In Twitter
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Todd Sullivan was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Sullivan is a co-founder and general partner at Rand Strategic Partners and discussed why his fund has no interest in buying shares of Twitter Inc (NYSE: TWTR).

"Twitter hasn't really found a way to monetize their product," Sullivan argued. "They've done some things over the past year and a half that have pissed people off."

The hedge fund manager said Facebook Inc (NASDAQ: FB) has successfully found a way to monetize its product a lot better. He noted that ads appearing in his personal News Feed are relevant and clickable.

Sullivan said that Facebook holds a distinct advantage in the social media space. Many users upload photos to the platform, especially the older generation. As such, these users may hesitate to move on to the next "big" social media platform. Snapchat, Instagram and others are all social media platforms that are experiencing rising popularity. It is questionable if many Facebook users will ditch the platform and begin sharing photos and materials on other platforms instead.

"Facebook has done a much better job," Sullivan added. "Until Twitter finds a way to successfully monetize its product, I'm not sure I would want to be an investor in it."

On the other hand, "Facebook has something going."

Trader: There's ‘No Point' In Playing Twitter Now

Rachel Shasha was also a guest on Thursday's #PreMarket Prep.

Shasha, a full-time trader that specializes in short- and long-term options also discussed trading Twitter.

Twitter is "dead money," according to Shasha, who admitted that Twitter is a great product to use. However, the quality of a product isn't always correlated to the stock price, leading the trader to speculate that shares could still move lower.

"For me, I don't see a point in playing it," Shasha said. She added that she may re-consider when Twitter "starts to pop its head back up" or "find a better bottom."

"I'm really not interested," she concluded.

Posted-In: #PreMarket Prep Dennis Dick Instagram Joel Elconin monetizationExclusives Trading Ideas Interview Best of Benzinga

 

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