Facebook (FB) fell sharply at the open today, falling 12% to $33. This can only be good news for Apple(AAPL), as folks will look to go back into something that is actually extremely undervalued at $536. We expect Apple (AAPL) to trade over $560 this week and purchased the $565 calls for .68. We will continue to add as we think Apple (AAPL) we perform almost like a 'flight to safety' trade as the Eurozone mess works itself out.
Sina Corporation (SINA) has been an Optionmillionaires favorite over the past few months.There is nothing that an option trader likes more than a volatile stock, and SINA Corporation (SINA) sure fits the bill. SINA Corporation (SINA) reported earnings after hours, and the stock rose nearly 7%. Folks were expecting a loss, which they got, but revenue was above expectations. With all the bad press as of late, it was almost a relief that SINA Corporation (SINA) expects to still generate revenues with the China censorship crackdown.
It's one of the reasons we think there will be some serious upside upgrades tomorrow. SINA Corporation (SINA) pulled in just over $100 mil in revenues for the past quarter, yet has over 300 million users of its twitter like service. If they are able to just pull in $.50-$1 per user, they will experience some SERIOUS growth. Smart "Growth Companies" sacrifice short term profits, for long term growth. Looks like Sina CEO Charles Chao is continuing to do that, which is great news in our opinion:
Sina CEO Charles Chao said: "China's macroeconomic weakness in the first quarter the Company's brand advertising business growth moderate. We expect the macroeconomic aspects of the resistance will continue until the second quarter, however, we have begun to test the water micro- Bo brand advertising business. this advertising product recommendation engine driven by the map-based social interest, is expected to be in the second half of the year for our brand advertising business real impact. the current the microblogging advertisers preliminary feedback is encouraging, we believe that to continue major investment is necessary for social media and related projects. "
Of course there are the folks looking at the news release tonight seeing this headline:
The market is forward looking, and think this view is very short sighted. With the penetration they have, in a market with few competitors, I think SINA has much more upside then folks are giving her.I guess we will see tomorrow. Here is what we were saying on our watchlist this morning and monday:
SINA – 60 calls before the close for me, think earnings will not be too good, but the outlook and china restrictions will be the key.
SINA – reports this week as well, with RENN. Hard to figure, but I still like SINA. Not sure of the strikes yet and may wait till Tuesday AM.
Happy Trading!!
Disclosure: we hold $57.50 and $60 MAY calls
I think people underestimate the true potential of a growth stock. The endless possibilities and limitless valuations. Growth stocks are an exception to normal market standards. Unfazed by macro economic conditions and gyrations, growth stocks continue to power to new highs. Like I said in previous posts, its only when everyone is on the Bull Bandwagon, that the stock pulls back.
Today's earnings from LinkedIN (LNKD) shows the stock is far from any sort of pullback and is still in the midst of a tremendous growth cycle. It also looks like shorts are starting to realize this, reducing their short postions from 7 million shares in January to 4.3 million in April.
Traders will continue to cite chinks in the armor to induce a sell off and rationalize their losing trade. Maybe its the insiders selling shares? Maybe the 850 PE ratio? Competition?
Of course these are all valid arguments, but not when a company is growing revenues over 100% YOY. LinkedIn (LNKD) earnings today reinforced our belief that the shares are headed to $150+ before summers end.
You heard it here first when the stock was trading at $100, and now you will hear it gain when the stock is at $120.
As for you LinkedIN(LNKD) bears, please let us know when you go long....
Thanks!
When I was a kid, my grandmother always told me don't talk to strangers. Fast forward 20 years, and I still hear her voice as I read countless opinions on LinkedIn (LNKD) and why it will go down from here. Not that I will ever talk to some of those people, and I am sure as heck not going to listen to them. The bearish sentiment by the retail investor gives more credence to my argument that LinkedIn (LNKD) will see $150+ by the end of the summer.
It's only when a growth stock is in the midst of an epic run, that the retail trader starts getting on the bandwagon. And of course they are the ones holding the bag on the way down. It's how this market works, and will never change. Just like the economy, the rich get richer and the poor get poorer.
LinkedIn(LNKD) is currently trading at 101.43 up 3.38% on light volume. Expect the knife to come out on the BEARS, as they are put back into their cave until the fall.
Bad news can pummel a stock into submission. Take a look at the chart for SINA Corporation (SINA) below. We have made some very profitable trades on SINA Corporation (SINA) in the past, and we think it's ready to make another move to the upside.
When SINA moves, it tends to be violent as folks chase a move they fear they are missing. Lets see if SINA starts pulling out of oversold territory today.
We currently hold the $60 and $62.50 April Calls.