You know I was a big advocate for YELP, holding it from $21 to $31, back down to $14, then up to $27. Alongside WNR, it has been my biggest winner for 2012. However, recent events in the social media space has given me caution with YELP, specific to lock up periods expiring and out of sync valuations. Without a doubt, YELP is certainly a takeover candidate, but so is everyone else. Aren’t they?
Have a look at some price to sales ratios in the social media space, courtesy of The PPT.
Now let’s sort by market cap.
Notice anything odd?
Fucking YELP, PANW and LNKD are trading at extreme p/s valuations. All three stocks can get cut in half and still be overvalued, when compared to some of the bigger companies in the space. 5x sales seems to be a reasonable place for these stocks to base out. If that’s the case, The FuckBook aka Facebook is heading to $10.
Naturally, we need to give a premium to smaller cap names, due to chances of a buyout. Also, in the case with YELP, it is growing at a 70% clip. I think a “fair” price to sales ratio for YELP, given the compression of valuations in the space, is about 7x sales–matching the valuation of TRIP–another Fly favorite.
In short, I believe YELP is being propped up by hopes and dreams. If anything derails for YELP, if GOOG develops a kick-ass FREE app for Zagat, the stock is heading for the low teens, maybe $12.
Being that I was such a big supporter of the name for so long, I felt it to be an appropriate gesture by me– to offer an explanation– as to why I am no longer invested in YELP or remotely interested.
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good song
I lost big in YELP once, so its off limits for me too.Because “A Man got to know his limitations”.
Many thanks to Le Fly. His recent summaries have saved me from having my faced ripped off.
lnkd and yelp are flying under the radar, as the focus is on fuckbook, groopon, and zynger — their time shall come.
groupon has taken its medicine. Trading at 1.69 with a product that is far from obsolete… it has some room to grow, even if it goes a little lower first
Re the Networkers post: Sold ARUN (In @ $13.17 – Out @ $17.23 for 30% gain) ….
Rather than JBL I redeployed ARUN cash into FN @ $12+
Hi Fly,
Will you be adding to your Marvel?
Thanks
Great call on YELP the first time Mr. Fly. Of late I’ve been trading the blogger V. Kings ideas. MRVL looks great!
PANW isn’t a social media company. They sell enterprise firewalls. If CSCO had any brains they would buy them.
Yes, but they are tethered to growth of industry.
Agree with your valuations…all that shit is both unshortable and unownable.
A new V.King BUY
Check out the V.Kingdom to find out…
HL outperforming today.. I bet the proverbial farm in the majority of my managed accounts under $4. Posted here on the boards.. 2% divi is not bad too boot.. If silver tests $50 again, HL goes to $8 with Lucky Friday coming back online in January..
If silver goes to $50, HL goes to 12.
AMCC is gonna rip tits off …
Applied Micro Circuits Corporation, or AppliedMicro (AMCC), today (7/25) announced the world’s fastest CMOS transmitter ICs for Dense Wavelength Division Multiplexing line-side applications, which support power-efficient, cost-effective deployments in 100-Gigabit per second optical metro, regional and long-haul networks. With line rates up to 31.8Gbps per channel, AppliedMicro’s S28032 DQPSK Mux chips pave the way for wide-scale deployment in 100G DWDM Optical Transport Networks (OTN) as operators increasingly seek higher bandwidth solutions and greater network density.
http://finance.yahoo.com/news/appliedmicro-unveils-world-fastest-cmos-131100202.html
I’m a bit tech savvy, but on behalf of ‘the people’, I must ask; WHAT THE FUCK does all that tech stuff mean?
It means that telcos needing to get a bigger boat (pipeline) have found the answer with AMCC’s new chip that allow’s them to send 100 GBPS over their existing equipment rather than the current 30 GBPS that isn’t getting the job done. The telcos have partnered with AMCC on this endeavor and there is no competitor for their business. Partnerships will be announced soon ….
Read the last page or two of the earnings call for confirmation.
http://seekingalpha.com/article/750241-applied-micro-circuits-ceo-discusses-f1q-2013-results-earnings-call-transcript?source=yahoo
It means if a stocks starts with an x,y, or z then either short it or don’t buy it.
If a stock has the word “chip” or “tech” in it then by all means go buy it.
MRVL…..hmmmmmm………..developing
traitor, i mean trader
MRVL…kicked in the nuts on earnings