Just like we
said when Facebook IPO’d, don’t trade it…
We’re saying the
same thing about Twitter.
With
an $11 billion Twitter IPO nearing, investors would be smart to remember the
unsustainability of such high valuations.
The
Wall Street experts predicted that social media giants would be the “next big
thing” for big investment houses. In fact, prior to Facebook’s IPO,
Wedbush started the stock with an outperform rating. Stern Agee initiated
a buy rating before the stock even started trading.
The
future was bright.
Social
media became the “can’t lose” phenomenon of 2012. Or so we thought.
The
stocks involved became nothing more than embarrassing flops. So if Twitter really wants to embarrass
itself and wind up in the crap heap along with its competitors, so be it.
There’s
a growing fear that these companies are simply valuing themselves on the
strength of user numbers. Twitter may
have 100 million regular users. But
Facebook has 750 million and still suffered an embarrassing IPO.
With
an $11 billion valuation, Twitter is greatly overvalued… and WILL flop on its
day of IPO. Trust me. It’s happened before. It will happen again. These companies never learn.
However,
we can still profit from the “anticipatory momentum” leading up to the
IPO. And that’s because many investors
are herd-like investors. There “sheeple”
without a clue.
Here’s
how…
In
the months leading up to the IPO, we’ll pick up well-placed positions in the First
Trust IPOX-100 Index (FPX).
Stay
tuned for exact trading instructions on this from Speed Retirement System.
Take
good care,
Ian
L. Cooper
Speed Retirement System
