Ask a Fool: What's Your Take on Twitter?

Will Twitter hit $100 per share this year?

Jan 24, 2014 at 9:30AM
Since its initial public offering, Twitter (NYSE:TWTR) has been a popularly debated stock among investors. We received an excellent question about the company from Fool member Rosi Reddy, who asks "What's your Foolish take on Twitter?  Will it reach $100 or above by end of this year?" In this video, Motley Fool Stock Advisor Analyst Brendan Mathews answer's Rosi's question and provides his thoughts on Twitter. Here's some of the main points: 
$100 per share in 2014? 
Today, Twitter is priced at roughly $62 per share. Will it run up over 60% to $100 per share over the next 11 months? Honestly, I (Brendan here) don't know. In the short term, the only thing that I can guarantee about Twitter's stock price is that it will fluctuate. At the Motley Fool, and on Stock Advisor, the premium service that I work on, we're quite loathe to make short-term predictions about stock prices. Short-term stock prices are nearly impossible to predict, so we focus on finding great businesses that are appropriate for long-term investors. So is Twitter a great business that's worth holding long term?

The power of Twitter 
In this age of social media and digital communication, Twitter is a global gathering place with more than 230 million monthly active users. I use Twitter (@TMFWillSommers, if you want to follow me) on almost a daily basis -- it's a great way to find and share information. And because it's such a powerful platform with a large, engaged audience, it's clearly attractive to advertisers. Twitter is still in the early innings of monetizing its users, but the company has made great strides, particularly in mobile advertising. Today, 70% of its ad revenue comes from mobile devices. I expect mobile advertising will be a huge growth market over the next five years, and Twitter is well positioned to capture a portion of that growing market. 

A key caveat
While Twitter has lots of potential, it doesn't have much in the way of current business -- that's pretty clear if your spend more than a few minutes reviewing its financial statements. It is a $34 billion company with no earnings that is trading at a huge multiple of sales. And, as the future is truly unpredictable, it's not clear that Twitter will ever live up to its potential. 

Brendan's takeaway
Twitter could be could be a big winner or a big loser. It doesn't lack for potential or opportunity, but it's hard to say if the company will ever capitalize. Thus, I'd advise Twitter investors to size their positions to reflect the risk and wide range of potential outcomes.

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Brendan Mathews has no position in any stocks mentioned. The Motley Fool recommends Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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