*cheap* *cheap* *cheap* isn’t just a sound birds make, it’s the sound of Twitters’ (TWTR) share price after they sent 70M accounts out of the nest.
You might look at Twitter’s recent performance, and wonder, if it really is a buy. Some analysts have it at a ~$32 price target, while JP Morgan just slapped this bad boy with a $50 price target. The catalyst? Twitter suspended 70M accounts for being “fake” and my guess is that they also banned quite a few bots in there as well.
Wall Street, however, doesn’t understand this, and that trimming the hedges once in a while is a good thing. With those 70M accounts suspended, they start to create a better service all around (read: now I can get more recipes in my feed), and actually increase Daily Active Users as well as general upticks in usage just because people aren’t overwhelmed by “fake news” or nonsense tweets.
What this means to you
If you don’t use Twitter, well, you probably just end up texting friends and looking up food pictures on the couch. Using Twitter, however, could be a whole new animal. Better spam controls, more Mod involvement, and better content being posted and not just by a content farm are all things consumers AND Twitter want.
How you make money
Interested in playing TWTR? Awesome. A few strategies come to mind:
- If you believe in the upside, buying the stock outright and holding it would be the easiest and most direct way to get into TWTR.
- If you still like the upside but want a bigger scale, play options. Buying 24 AUG $50 CALL and the stock hitting that price on August 1st would result in a net gain of $402, or an 80.2% return on your investment
- Hate Twitter and all these cute dog pictures? A 24 AUG $39.50 PUT having an underlying stock share value of $37 on 1 AUG means that you would net $1145, realizing a 212% gain
- REALLY hate Twitter? Delete the app and move to Instagram.