Tag Archive | "social networking stocks"

Social Networking Stocks For The Next Wave of Takeovers


By

Time To Consider Which Social Networking Stocks Are The Next Takeover Targets

Social Networking StocksSocial networking stocks have been one of the strongest stock sectors in recent years for a variety of reasons, one of which is the high-profile takeovers of social networking companies by bigger rivals, which have revealed stunning valuations.  For savvy traders and investors looking to profit from acquisitions in the social networking stock sector, it is useful to look at which social networking stocks may be the next takeover targets.  While some of the better known social networking companies, such as Instagram and Tumblr, have already been taken over by behemoths in the sector, there are still plenty of social networking companies that are ripe for takeovers.

Why Takeovers In The Social Networking Sector Should Continue

The reason why takeovers in the social networking sector should continue for many years is because social networking has ushered in a profound change in the way people communicate.  Social networking is not all about friends reconnecting and sharing pictures, it has literally become the primary way many people interact on the Internet, which has profound implications on where and how billions of advertising dollars are spent.  This has companies scrambling to position themselves in the social networking space to be not only access the quickly growing user base, but to also capture the huge advertising revenues.

Top-tier social networking companies, such as Facebook (NASDAQ:  FB) and LinkedIn (NASDAQ:  LNKD), have plenty of subscribers and plenty of cash.  But, they need to maintain their competitive advantage against rivals, which is driving them to pursue strategic takeovers of smaller social networking companies.  Other companies that are tangentially connected to the social networking space have also completed takeovers of social networking companies to expand their presence in the social networking space.  These include companies such as Yahoo (NASDAQ:  YHOO), which took over Tumblr in surprise move during 2013.
Alibaba Group
The huge Chinese e-commerce company Alibaba Group has recently entered the social networking space with the acquisition of 18 percent of the outstanding shares of the Chinese social networking web portal Weibo (the majority owner being Chinese search engine company Sina Corp).  What makes this interesting is that it is another sign that the big Internet players are not done with their investments and outright takeovers of social networking companies.  Alibaba Group is in the process of transitioning to a public company via Initial Public Offering (IPO), which will provide them additional resources to make social networking investments and acquisitions.  Such moves would almost certainly prod other large Internet companies to increase their exposure to the social networking space via investments and acquisitions, which will cause the shares of publicly traded social networking companies to increase in time both due to the new investments and takeovers and anticipation of them.

List Of Publicly Traded Social Networking Stocks That Are Takeover Targets

Social Networking Stocks TakeoversWhich social networking companies will be the next targets of takeovers by larger rivals?  That is very hard to predict; however, traders and investors can position themselves for future takeovers in the social networking sector by buying shares of social networking companies before additional takeover offers are made.

Getting a list together of the potential takeover targets within the social networking sector is the best way to ensure one has a handle on which companies may be worth buying in anticipation of future acquisition news in the red hot sector.  Keep in mind that not all of the companies mentioned below are located in the United States.  In fact, some of the hottest social networking companies and stocks are located in China, which has the world’s largest population; one that is enthusiastic about using Internet-based social media to communicate.

  • Demand Media, Inc. (NYSE:  DMD) provides social media tools via websites such as eHow.com, livestrong.com, and cracked.com
  • Jive Software, Inc. (NASDAQ:  JIVE) provides social business software platforms to businesses, government agencies, and other enterprises for internal social networking
  • Mediabistro Inc. (NASDAQ: MBIS) is an Internet media company that provides social media support services
  • MeetMe, Inc. (AMEX: MEET) is a social networking site that is designed to facilitate people meeting new people online
  • NetEase, Inc. (NASDAQ:  NTES) provides instant messaging, matchmaking, community forums, micro-blogging, blogging, and photo albums in China
  • Renren Inc. (NYSE: RENN) is one of the largest social networking sites in China; it is comparable to Facebook
  • SINA Corporation (NASDAQ: SINA) is a China based Internet search engine that offers social networking services to Chinese language users via Weibo; it is comparable to Twitter
  • Spark Networks, Inc. (NYSE:  LOV) operates relationships websites and social networking services for local event organizing
  • Taomee Holdings Ltd. (NYSE:  TAOM) is a social networking site geared towards Chinese children
  • Tencent Holdings Ltd. (OTC Pink:  TCEHY) operates one of the most popular websites in China, known as QQ.com, which provides the widely popular QQ instant messaging service
  • United Online, Inc. (NASDAQ:  UNTD) provides social networking services and products via the Classmates, StayFriends, and Trombi websites
  • Yandex N.V. (NASDAQ:  YNDX) operates an Internet search engine in Russia and other countries that includes social networking
  • Yelp, Inc. (NYSE:  YELP) while known primarily for its local business reviews, also operates as a social networking site for people sharing opinions about local businesses
  • Youku Tudou Inc. (NYSE:  YOKU) operates a video sharing website in China that is comparable to YouTube

Stay up to date on stock trading ideas by getting on our FREE eMail list!

Posted in Stock TipsComments Off on Social Networking Stocks For The Next Wave of Takeovers

Are Social Networking Stocks Overvalued?


By

Are Social Networking Stocks Overvalued?  How To Answer The Question

Twitter Stock ValueWith Twitter (NYSE:  TWTR) joining the list of publicly traded social networking stocks, and many of the stocks making monster runs higher during the later part of 2013,  traders and investors are wondering:  are social networking stocks overvalued?  That is a fair question given the lofty valuation that the major social networking stocks trade at.  By just about any valuation metric, the major social networking stocks are at incredibly high valuation levels.  The question that needs to be answered is:  based on projected forward revenue and earnings growth are these stocks overvalued, fairly-valued, or even undervalued?

 

Current Valuations and Future Prospects of the Major Social Networking Stocks

Facebook Valuation
While there are numerous publicly traded social networking stocks, there are in actuality only three major ones, including:  Facebook (NASDAQ:  FB), Twitter (NYSE:  TWTR) and LinkedIn (NASDAQ:  LNKD).  The three major stocks performed differently after their Initial Public Offerings (IPOs) for various reasons; however, they all rallied hard towards the end of 2013, which lifted them up to market capitalizations and valuations that are quite lofty.

Based on 2014 estimated sales and growth, the following is a snapshot of the valuation of the three major social networking stocks.  While Price to Earnings (P/E) is a traditional valuation measure for stocks, since social networking stocks are at such an early stage of development and not very concerned about maximizing earnings, rice to Earnings (P/E) is not a good valuation gauge for these stocks.  Instead, it makes more sense to use Price to Sales (P/S) to develop an understanding of current and future valuations for these stocks.

The 2014 Estimated Sales, Price to Sales (P/S), and Estimated Sales Growth for the three major social networking stocks are as follows:

Facebook – Estimated Sales $10.38 billion, P/S 13.86, Estimated Sales Growth 36.1%

Twitter – Estimated Sales $1.13 billion, P/S 36.00, Estimated Sales Growth 76.5%

LinkedIn – Estimated Sales $2.16 billion, P/S 12.16, Estimated Sales Growth 42.4%

Based on their 2014 Estimated Price to Sales (P/S), Twitter appears to be overvalued compared to its peers in the sector, with a Price to Sales (P/S) that is approximately three times its two major competitors.  This is a valuation warning sign for Twitter investors.  Another negative for Twitter when comparing it to its two major competitors, is unlike Facebook and LinkedIn, Twitter is currently not profitable.  So, not only is Twitter trading at a much higher Price to Sales (P/S) valuation than its peers, but it is also not making money off of its revenues, so its business model can be considered unproven at this point.  The one thing that Twitter has going for it is the company’s Estimated Sales Growth is over 70% for 2014, which is considerably faster than its peers.  However, given its high Price to Sales (P/S) valuation, Twitter would have to maintain 70%+ sales growth for several years to justify such a high Price to Sales (P/S) valuation.

Are Social Networking Stocks Overvalued? | Alternative Stock Investments

If the valuations of the three major social networking stocks give you pause, keep in mind that there are alternative stock investments in the social networking space.  While the prospects for many of the secondary and tertiary social networking companies vary wildly, the whole sector should experience above-average growth for years, which may lift all boats within the sector.  Also, some secondary and tertiary social networking companies may be takeover targets of larger rivals or other companies trying to establish a presence in the space.  For example, in recent years, Facebook took over Instagram and Yahoo took over Tumblr.  For ideas regarding secondary and tertiary social networking stock investments, see Social Networking Investment Ideas.
Global X Social Media Index Exchange Traded Fund SOCL
To invest more broadly in the social networking sector, the Global X Social Media Index Exchange Traded Fund (ETF) (NYSE:  SOCL) provides exposure to the major social networking stocks and many additional social media and networking companies, including foreign social media and networking companies.

 

Are Social Networking Stocks Overvalued | This Risk of Owning Them

There are a number of risks associated with buying the big three social networking stocks at their current lofty valuations.  Of course, the primary risk is that the companies fail to deliver with the revenues and earnings that investors expect, and at some point the stocks have to readjust to lowered revenues and earnings expectations.  Another risk is that the social networking space becomes more fractured and the three major social networking stocks lose market share to competitors, which in turn will impact revenues and earnings going forward and consequently dampen their stock prices.  This is a real concern, as technology changes over time and the younger generations often gravitate to different products than their parents.  This trend is already evident with younger adults and teenagers that tend to prefer smaller social networking sites, such as Snapchat, over larger ones, such as Facebook, due to privacy concerns.

The history of technology stocks is littered with once-dominant companies that at one time commanded sky-high stock prices and valuations, only to see the carpet pulled out from under them, as technology and consumer preferences changed and caused their businesses to decline and their revenues and earnings to dry up.  As hard as it might be to envision right now, there is a real risk that some or all of the big three social networking stocks will someday lose their market share and public appeal to such an extent that their businesses go into permanent decline and their stocks follow suit.  Buyer beware applies to the big three social networking stocks.  As long as an investor is aware of the long-term risks of holding these stocks, they can properly calculate whether the potential long-term rewards outweigh the risks.

Stay up to date on stock trading ideas by getting on our FREE eMail list!

Posted in InvestingComments Off on Are Social Networking Stocks Overvalued?

Social Networking Investment Ideas


By

Social Networking Investment Ideas

Social Networking Investment IdeasWith social networking stocks soaring, as social networking becomes a way of life for billions of people around the world, investors are looking for social networking investment ideas to get involved in the hot social networking sector.  Although many of the top-tier social networking stocks, such as Facebook (NASDAQ:  FB) and LinkedIn (NASDAQ:  LNKD), have made big moves higher and are widely considered by Wall Street analysts to be fully valued, there are a number of lesser known publicly traded social networking stocks that may present good investment value.  Not only do the lesser known publicly traded social networking stocks present the potential for future growth, as interest in social networking grows, they also can be considered potential takeover candidates, as companies look to grow in the high social networking sector.

Although the high-profile Facebook IPO in 2012 got off to a rocky start, Facebook has recovered nicely since its IPO the initial sell-off that followed the IPO, and is now selling well above its IPO price.  Other social networking stocks, such as LinkedIn, have done quite well since their IPOs, and have become darlings of Wall Street that are highly spoken of by analysts and sought after by investors.  Social networking stocks are once again back in focus, with the Twitter (NYSE:  TWTR) IPO offering another top social networking stock investment avenue for investors that are hungry for social networking stocks.

Why Investors Are Excited About Investing In Social Networking Stocks

Twitter Social Networking
The reality of long-term investing is that an investor needs to invest their money in an industry that has future growth potential to see their investment grow over time.  Throwing money at random stock market sectors is not an effective investment strategy, since some sectors grow much more slowly than others, and at times, some sectors do not grow at all.

Investors are excited about investing in social networking stocks and learning more about social networking investment ideas because of the growth that the social networking sector has already experienced and is projected to experience in the future.  Social networking is here to stay, and is going to be a part of everyday life and business for the foreseeable future.  Social networking is still in the relatively early stages of industry development, and many investment opportunities remain, especially in the secondary and tertiary social networking companies that are publicly traded.  For investors that would rather invest in the social networking sector as a whole, instead of trying to pick individual winners, there is an Exchange Traded Fund (ETF) that is available that focuses exclusively on the social networking sector.

List Of Publicly Traded Social Networking Stocks To Play The Facebook IPO

The following is a list that includes many of the publicly traded social networking stocks that are available at the time of this writing.

  • Facebook (NASDAQ:  FB) – Dominant social networking site on the Internet that sets the standard in social networking
  • Google Inc. (NASDAQ: GOOG) – Dominant Internet search engine with an increasingly popular social networking service called Google+
  • Linkedin Corporation (NYSE: LNKD) – Dominant professional career networking site for networking with contacts in business and professional circles
  • Renren Inc. (NYSE: RENN) – Operates one of the largest social networking sites in China
  • SINA Corporation (NASDAQ: SINA) – China based Internet search engine that offers social networking services to Chinese language users
  • MeetMe, Inc. (AMEX: MEET) – Operates a social networking site that is geared towards people looking to meet new people online
  • Mediabistro Inc. (NASDAQ: MBIS) – An Internet media company that provides content, education, and career services to social media, traditional media, and creative professionals through a portfolio of online properties and communities; including AllFacebook.com, which chronicles developments at Facebook and provides unique Facebook services
  • Vringo, Inc. (NASDAQ: VRNG) – A company that provides software applications for mobile social networking applications.
  • FriendFinder Networks Inc. (Pink Sheets: FFNTQ) – An Internet and technology company that provides social networking services and web-based video sharing services
  • Snap Interactive, Inc. (OTCBB: STVI) – An application developer that provides online dating applications for social networking web sites and mobile platforms

social networking investment ideas wide

Publicly traded Exchange Traded Fund (ETF) that focuses on publicly traded social networking stocks:

  • Global X Social Media Index ETF (NYSE:  SOCL) – An ETF that invests in social media companies throughout the world

Things To Look Out For In Social Networking Investment

One thing that makes investing in social networking stocks interesting and potentially lucrative at this point is the fact that the social networking sector is still relatively new, with some notable social networking companies such as Twitter just transitioning to publicly traded companies.  Large social networkings companies have reasons for going public, which investors should understand.  Besides wanting to unlock value for insiders and early investors, large social networking companies are motivated to go public via IPOs so they can easily takeover smaller rivals and build their presence in the social networking marketplace.  Takeovers of public companies are easier to complete if the suitor is also a publicly traded company.

Takeovers of social networking companies have already begun, with Facebook taking over Instagram and Yahoo taking over Tumblr.  If the stock market remains healthy, it is reasonable to assume that takeovers of social networking companies will continue for years to come, which could cause decent price appreciation in the various social networking stocks that could be considered takeover targets.  Additionally, rapid growth of users and revenues in the social networking sector should contribute to an upward bias in the price of social networking stocks for years to come, which should provide nice returns to social networking investors.

Stay up to date on stock trading ideas by getting on our FREE eMail list!

Posted in Investing, Stock TipsComments Off on Social Networking Investment Ideas

How To Profit From The Facebook IPO Via Social Networking Stocks


How To Profit From The Facebook IPO

profit from the Facebook IPOThere are a number ways to potentially profit from the Facebook IPO.  The Facebook IPO is the most anticipated Initial Public Offering (IPO) in many years.  A large IPO, such as the Facebook IPO, usually causes stocks in the same stock market sector to rally.  A rally in the social networking stocks sector could allow investors to potentially profit from the Facebook IPO in an indirect way.

Due to the expected high demand for Facebook IPO shares by well connected professional investors and investment firms, individual investors are likely to be unable to acquire a pre-IPO allotment of Facebook IPO shares.  However, individual investors are not necessarily shut out from the Facebook IPO entirely.  A number of social networking stocks trade publicly which have the potential to make gains prior to and during the Facebook IPO, which may allow individual investors to profit from the Facebook IPO, as stock market participants bid up the social networking stocks sector.

Profit From The Facebook IPO Via Publicly Traded Social Networking Stocks

The list of publicly traded social networking stocks that could be conduits to profit from the Facebook IPO is fairly long and contains a wide variety of publicly traded stocks that are involved in social networking to some degree.

Publicly traded social networking stocks listed on major stock exchanges that could be conduits to profit from the Facebook IPO include companies such as:  Google Inc. (NASDAQ: GOOG), which is not only the dominant Internet search engine in the United States, but also has a growing social networking site called Google+; Linkedin Corporation (NYSE: LNKD), which is not only known as the premiere career networking site on the Internet, but is also considered part of the world of social networking for networking with contacts in the business and professional realm,  Zynga Inc. (NASDAQ: ZNGA), which is an Internet gaming company that has been closely connected to Facebook;  Quepasa Corporation (AMEX: QPSA), which is known as the “Spanish Language Facebook” since its social networking website is designed to appear to Spanish speaking people; Vringo, Inc. (AMEX: VRNG), which is a company in the business of developing software applications for mobile social networking applications.

Chinese publicly traded social networking stocks listed on major stock exchanges that could be conduits to profit from the Facebook IPO include companies such as:  Renren Inc. (NYSE: RENN), which is a large social networking website in China; SINA Corporation (NASDAQ: SINA), Chinese search engine that offers a social networking website in China.

Publicly traded social networking stocks in the penny stock realm that could be conduits to profit from the Facebook IPO include companies such asSnap Interactive, Inc. (OTCBB: STVI), which develops online dating applications for mobile platforms and social networking web sites; WebMediaBrands, Inc. (NASDAQ: WEBM), which operates websites related to the social networking space, including the popular AllFacebook.com website that provides Facebook updates and services; FriendFinder Networks Inc. (NASDAQ: FFN), provides web-based video sharing services and social networking services through the Internet.

There is also a publicly traded Exchange Traded Fund (ETF) that owns publicly traded social networking stocks which could be a conduit to profit from the Facebook IPO:  The ETF is called the Global X Social Media Index ETF (SOCL).  SOCL has investments in the stocks of social media companies that operate in a number of different market sectors and countries.

Publicly traded social networking stocks, such as those mentioned above, are affected by stock market sentiment and ongoing company developments, which could impede or accelerate a social networking stocks rally that might occur in sympathy with the Facebook IPO.  Buying stocks in the social networking sector is a potential way to profit from the Facebook IPO; however, trading based on a potential stock sector rally in conjunction with a pending IPO is speculative trading, and proper precautions should be taken.

Stay up to date on Profit From The Facebook IPO by getting on our FREE eMail list!

Posted in IPOComments Off on How To Profit From The Facebook IPO Via Social Networking Stocks


Sign Up for Text Message Alerts

By clicking 'Join Now', you agree to our Disclaimer and Privacy Policy. We are 100% Anti-Spam and will never share or sell your information!

Follow Us on

Facebook

Twitter

Google+

Pinterest

Trade With…


© 2020 MJ Capital, LLC | All rights reserved