With the action seen in Yelp and Zillow over the past swing, my attention continues to be on social and mobile plays. The sector is certainly attracting risk capital again. I’m already positioned in P, YELP, and Z. YELP and Z will continue to perform well, and I’ll look to ratchet up my YELP position to 10% on the next pullback. I’d love to get some low twenty one dollar pricing, but will assess the buyer appetite on the next pullback and trade accordingly. Zillow is still a messy chart in my view and will continue to be a 4-5% position until I get a clearer picture of the flow.
Pandora I am big in ~15%, with my cost basis right here at 10.54, and I’m playing for the break. The potential energy in price is big after a long consolidation and the break either direction could see significant price discovery. So don’t get cute and add to a losing long. Cut it sub $10 on a closing basis.
Mostly I want to turn your attention to Zynga. I don’t like this company. It’s run by derelict Silicon Valley coconuts. They make little games that distract and numb the populous. The stock trades so very shittaly. So utterly lame is ZNGA in fact, I’m considering buying it. Why you may ask? Mean reversion.
With the social-mobile hot pocket coming back on line, and gambler money jonezing for picks, Zynga fits the speculative bill. It’s beaten, deserted, and five bucks and change. That means noobs can play. That means it can get wiry.
I’m willing to risk down to $4.36, so right now the drawdown is ~20%. Therefore a 5% position would risk 1% of my portfolio. I don’t like the trade that much. So price needs to come down a tad more. I may or may not get my position, but I’d like to get a 5% position, and risk 75 basis points, so I’m looking for a $5.00-$5.10 entry. I’ll double down and lean on $4.50 should it trade, and bail south of $4.36. All the aforementioned is hypothetical of course until I get my initial entry.
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