Here are my thoughts on Twitter ($TWTR) – July 11, 2022
TWTR
I am doing a special video here regarding Twitter ( NYSE: TWTR ). As I’m sure you know Musk is backing out of this deal. I am not going to go into the merits of the case because that has been written about ad nauseam. I don’t really have anything that I can add to that, I really don’t know and frankly, I really don’t care.
As most people know, I think Twitter ( NYSE: TWTR ) is a cesspool, it just is. It has gotten worse, and worse, and worse, which, by the way, the stock price kind of reflects that. I could see a $20.00 handle on this pretty easily, all it is a matter of time. I don’t think much of Twitter ( NYSE: TWTR ), I think even less of its management board, particularly the censorship Nazi, I forget her name.
This actually leads me to my point here, I am not really talking as a trader here, I am talking as an attorney, which I am, though I haven’t practiced in a long time. But I do read the law and I have experience in litigation, though certainly not litigation on this level.
For me this is really simple, this is my thesis, and it’s a singular thesis. I think Twitter’s ( NYSE: TWTR ) numbers are fraudulent, I always have. When they say that they only have less than 5 percent of all of their daily active users, less than 5 percent are spam bots or spammers. When they say less than 5 percent, okay, that is just criminally misleading because my sense is, it’s a lot more than that.
And why do I think that? I will tell you why, because it is profitable for these scumbags. Not Twitter ( NYSE: TWTR ), for the spam bots and all that stuff, it is profitable for them to be doing what they are doing. Otherwise, they wouldn’t be doing it. Also, it’s profitable for Twitter ( NYSE: TWTR ) to downplay their presence. It is not profitable for Twitter ( NYSE: TWTR ) to say, hey, we’ve got about 20 percent of our accounts that are total bullshit accounts, but we are doing what we can to get rid of them.
Could you imagine what the advertisers would do, advertising has already been declining a lot so they are really in trouble in that way. But again, my thesis is that these are “bullspit“ numbers, they are. And this is why they have not forthcoming, oh, we gave them our fire hose. Okay fine, big deal you still haven’t given them everything and you haven’t even given them the right stuff.
And also, this is interesting, I am giving you anecdotal evidence. I have a Twitter ( NYSE: TWTR ) account, @Danfitzpatrick, but on my iPhone, I don’t have Twitter ( NYSE: TWTR ) set up on that. And so if I am looking at an article and there is a Twitter ( NYSE: TWTR ) thing in there I would click on it and I would be taken to the Twitter ( NYSE: TWTR ) app and it is asking me to log in. I don’t remember my stuff and I don’t really care that much about it so I would never log in.
Well, guess what? After a while, I was actually randomly assigned a Twitter ( NYSE: TWTR ) account. It’s like Dan 538279, or whatever, just randomly assigned it. I didn’t sign up for it, it’s just been there forever because I don’t look at Twitter ( NYSE: TWTR ) that much, I couldn’t care less. I tweet for marketing reasons or if I am going to say something that I am going to regret later. But other than that, I’m not a Twitter ( NYSE: TWTR ) guy. I didn’t log in or anything, I didn’t even know my login stuff.
Well then, probably 3 weeks ago or a month ago, when I clicked on that I got a notice that my Twitter ( NYSE: TWTR ) account had been suspended. Because apparently, they think I am a spam bot or a bot or something or other. Fine, I didn’t take offense but I did take notice. Why did they let this go on for so long? Why did they randomly assign my account? What’s up now? What’s different now? What is different now is, that they’ve got people looking at them and the last thing they want is for there to be evidence, it has nothing to do with me, it’s multiplied by millions, but they don’t want evidence their numbers are bullshit.
So this is my point though, in the discovery process, that is all out in the open. If they are telling Musk, if they are telling the court, we want you to enforce the agreement and Musk says, well au contraire mon frere, their numbers are bull and I didn’t know about it and I still don’t even have all the information, and then some of that data gets out to where they’re BS accounts are more than 5 percent, everybody is going to get sued. Everybody is going to get sued, shareholders, you name it.
And so that isn’t going to happen, that isn’t going to happen. The Twitter ( NYSE: TWTR ) board, they are all biased in a certain direction. And so because I don’t want to trigger anybody or give anybody the vapors I won’t say that they’re all leftists, I will just say that it has a certain bias in it that makes the site inherently unusable for half of America.
If you are a celebrity in a blue checker then you definitely feel like everybody cares what you say. Sure, fine, I really care what some airhead on TV or in a movie thinks about pretty much anything other than being on TV or in a movie, but that is what they think. And so I think there is probably more going on than just those people. And I think a lot of the stuff that is going on is, that half the crap on there is not even real.
And so they are not going to pursue this lawsuit. It’s awesome and all that, well, the stock is down 9 percent, why? Because of this mess, because of the high degree of likelihood that Musk is not going to buy this company. Now, whether or not you like Musk is irrelevant to this. It is really about whether or not he is actually going to buy the company. I have got a pretty strong feeling that he is not going to buy the stock at 54.20, whatever. I have got a really strong feeling that he is not going to pay up 63 percent for this stock, that is just not going to happen.
It puts the Twitter ( NYSE: TWTR ) board in an impossible situation. At some point Musk, if he had to, would say, here’s your billion dollars, go pound sand. They will not force him to buy this company. If you think that they will you are nuts. I see these people writing about this, they are very, very confident that the court in Delaware is going to force Musk to buy the company. I would say that you can sell calls at 54.20 all day long and all they are going to do is expire worthless forever. So there’s your trade.
He is not going to be forced to buy the company. When it gets right down to it he is either going to buy the company at a negotiated reduced price, which will also bring in lawsuits because of why? Well, because the only reason it would really be negotiated down would be on the spam bot issue. And therein lies the original problem, disclosure. There are just a lot of things going on here.
But to me, again, my thesis is a one bullet point thing, they are not going to allow this to get into discovery because of the things that will be discovered. And I seriously doubt whether they are going to be able to put some kind of gag order on it.
And so I would stay away from Twitter ( NYSE: TWTR ). The only suggestion I could make if you are really interested, is if you are really interested in trading this stock; what price do we think he will not pay? I don’t think he will pay $45.00, and neither does the option market. The option market doesn’t actually think he will pay $38.00.
And so I would say you can be selling, let’s call it $40.00. You can be selling $40.00 calls all day long, all day long. Every week, every month, you can sell those expirations, you can sell a lower price call, 39.00, 37.00, whatever it is. This stock is not going to go up anytime soon because the only way it would is if Musk says, alright you got me, I will go ahead and pay that price. Other than that, the stock will only be stagnant here or it will go lower. There is too much uncertainty around it, you just don’t want to be there.
If you are an option trader you can do strangles, you can do straddles, you can do broken wing butterflies. You can do all of that and that is one way that you can make a trade on this. By the way, we’ve got Rocky Cleborne on Option Market Mentor who does this type of thing. But other than that way, I would just totally stay away from this stock because you are just gambling. Buy it, you might be a winner, you might be a loser. Short it, you might be a winner, you might be a loser. Those aren’t the kind of odds that I like.
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