LogMeIn Surges, Twitter Plunges After Earnings

Shares of LogMeIn, Twitter, and Microsoft were among the most active tech stocks on Wednesday.

Apr 30, 2014 at 11:30AM

The Dow Jones Industrial Average (DJINDICES:^DJI) was up just five points as of 11:30 a.m. EDT. Microsoft (NASDAQ:MSFT) was one of index's worst-performing components, while tech stocks LogMeIn (NASDAQ:LOGM) and Twitter (NYSE:TWTR) were experiencing notable moves.

GDP falls short
Perhaps helping to limit the Dow Jones' gain, new data showed that U.S. GDP, the broadest measure of national economic activity, grew just 0.1% on a quarter-over-quarter basis. Economists had anticipated a gain of 1.2%.

This is a preliminary figure that will revised in the weeks ahead, but it still suggests that the U.S. economy may be weaker than otherwise anticipated. A slow-growing economy poses a risk to the stock market.

Microsoft will bring the Xbox to China
Microsoft said on Tuesday it will begin selling the Xbox One, its newest video game console, in China in September. The Chinese government had banned foreign video game consoles in 2000, but lifted the regulation earlier this year.

Given China's enormous population, entering the market offers an opportunity for Microsoft's video game division. However, sales could be limited by the relative expensiveness of the Xbox One and the limited income of the typical Chinese citizen. Video gaming is popular in China, but PC games, particularly free-to-play PC games, dominate.

LogMeIn beats expectations
Shares of LogMeIn surged more than 20% early in Wednesday's session, following a quarterly earnings report that exceeded analysts' expectations. LogMeIn's first-quarter earnings per share of $0.22 beat estimates by $0.01, while revenue of $49.02 million rose 31% on an year-over-year basis and was also better than expected. LogMeIn boosted its guidance for the fiscal year.

In its earnings call, management cited, among other things, the move to make its remote access services a premium product as helping to drive the strong earnings results.


Source: Wikimedia Commons.

Twitter drops after earnings
Twitter stock was down nearly 10% on a quarterly report that was far less impressive. While earnings (breakeven) exceeded analysts' expectations (a loss of $0.03), and revenue ($250 million) came in better than expected ($241 million), the company has seen a dramatic deceleration in its usage growth.

Twitter had 255 million monthly active users, up 14 million on a sequential basis, but the year-over-year growth rate has fallen dramatically. In short, Twitter's popularity growth is stalling; for a relatively new tech company, that sort of momentum loss can be devastating. 

Apple's next great product
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Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Twitter. The Motley Fool owns shares of Microsoft. 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.

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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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