Thursday, February 23, 2017

The Tale of Two Social Media Stocks

Well it doesn't look good for shares of Twitter(TWTR) lately. The company has failed to find a suitor, and user growth has slowed. Dramatically.  Currently Twitter is valued at $11.3 billion as the stock has seen a 69% decline in value since October 2014. It's not the best performance comparison chart I've seen in awhile



Meanwhile shares of Facebook(FB) have climbed an additional 72% on top of an already stellar run the last few years. It seems whatever can be done right at Facebook is being done right! Facebook is currently valued at $393 billion making it one of the top 10 largest companies in the world by market cap. Additionally the company has had zero problems showing double digit increases in DAU & MAU metrics.

The contrarian inside me says now would be the right time to go short Facebook and buy Twitter for a spread trade. It seems Twitter can't get anymore unloved than it is now, and Facebook is just loved by everyone.

Visit StockCharts.com to see more great charts.

Full Disclosure: Long FB shares and short via March 125/130 call spread.

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