Has Perception Changed?

A few weeks back I wrote a piece about negative perception surrounding Facebook and how it would turn at one point. After today’s major sell off in the broader markets and Facebook not giving back a substantial amount of its prior weeks gains,one can infer that perception has changed for the better. A month ago on a day like today, social media would have been destroyed, taken out back and shot. One could not look to hold for the long term because days of down 10% were the norm. With the market selling off like today,social media like Facebook, Zynga, Yelp, and many others would have taken the assault to the face. Today the perception of social media looks to have changed, because a dramatic sell off is far from the case.

This change of heart by the market may be due to the hope of good earnings or more likely the fact that the worst is behind these companies. The worst has occurred, the leader of the social media industry has come to the forefront and flopped completely. We have all recently witnessed the recovery from its near death experience. Does this mean its all clear sailing? No, that is far from the case, though as obvious through its recent positive trading, enthusiasm for Facebook has lifted the stock.

As we look forward to Zynga unleashed conference tomorrow we see that the social media industry has turned a corner. They (social media as a collective) are taking the next steps to allowing mobile to be a giant. As I recently mentioned in I See The Future, the future sits upon mobile, so this move lines up nicely for both Facebook and Zynga. Being that a large portion of both Zynga and Facebook’s profits come from these social games, that will now be easily accessed by mobile devices, they are now playing the wall street game.

So the “perception,” as I put it sometime ago has in fact changed and it looks as though social media is now playing the Wall Street game. As the social giants have won the social game it is now time for social media to prevail at the game of Wall Street.


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Facebook Gambling?

Who is to say that poker cannot revolutionize Facebook’s profits? With all the talk of Wall Street being unhappy with Facebook’s mobile monetization, no one has thought for a moment that maybe mobile monetization isn’t even the key. Great companies are built around many revenue sources, so that is why I see Facebook taking a multifold approach to revenues. One could only imagine how popular gambling could be once again, if it involved real money, and your Facebook friends. Those tech all stars that sit upon their billions out in silicone valley are much smarter than we ever thought. The next big thing is unquestionably online gambling, with or without the United States. Who is the global company set up to own this space? Why no other than the social media giant, Facebook.

As investors and traders we sit around all day, thinking, dreaming, trying to figure out what is next. While reading news and more news and more spewing of so called analyst, I pieced two and two together. Facebook will be the king, queen, and full fledged court of online Gambling. Yes, Gambling has been done online before. Yes, it was very profitable for those involved, though many had to give that money back to the U.S. government (suckers). The reality presents itself as this: if online gambling is legalized, Facebook is set to make a killing.

Fulora, leader of Facebook’s general monetization product developments recently said, “we hope to simplify the purchase experience, give you more flexibility and make it easier to reach a global audience of Facebook users who want a way to pay for you apps and games in their local currency.” I don’t know how you read that, but someone with half a brain can see there is much more than meets the eye. Why would Facebook have such a desire to move from their credit system to one focused solely on cash from all nations around the world?


The topic of gambling has consumed those that are bullish on Zynga. Now I believe it is time for Facebook believers to get behind the train on online gambling. In my opinion the adult version of gaming is gambling. As we have seen the growth in the older age demographic on Facebook it is fairly obvious that a move towards online gambling will capture the attention of many of its users. Gambling has long been considered a social activity and what better way to gamble and be social then via Facebook.

With the recent news out of Facebook changing their purchasing system to focus on local currency and the success as of late of Zynga Poker, the future seems to be lining up nicely. We have all read the news stories and heard the tales of the profits made from online gambling. Most of these success stories were not done with the power and knowledge of a company like Facebook, nor on the massive level of Facebook. Social and gambling are on the brink of colliding and Facebook has aligned itself perfectly for success.

Many of you will attempt to say that facebook is a family oriented company, they would never delve into gambling. Though the truth of the matter is that being a family oriented company means offering something for every memeber of the family. Facebook’s move to allow Zynga Poker means that Facebook sees the future already. Zuck is smart enough to know that daddy may love gambling, and that his 15 year old son should not have access to it. The prowess of Facebook allows for an access to a large market of gamblers (and potential gamblers) and the capacity to maintain a family atmosphere.

Yes, I think this bodes well for Zynga. Though overall the real winner here is Facebook, being that they have access to the many users and information about these respective individuals.

Photo by Melissa Gray

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I See The Future

Do you know what they told Henry Ford when he said he wanted to make an automobile? They said you sir are ridiculous. Who would ever quit riding their horse to ride around in something so unreliable as a car. Comical isn’t it? A horse was thought to be more reliable than a car, and the rest is history. Do you know what they said about the internet many a moons ago? They said al gore had created another fad and it would fall by the wayside. Well we sit here today reading financial news via the internet, many of you while driving in your vehicle, so we now know both the above mentioned counterpoints to be a falsity. So I sit here once again upon my blogger throne, not suggesting, but informing you, that I know the future.

The future rests on the back of mobile. Mobile in the form of smartphone, games, apps, connectivity, etc. Mobile in reference to the mobility of phone, the mobility of tablets. Every great tech company somehow is correlated to mobile, be it that of Apple, Facebook, Microsoft. Just to name a few. Wherever one looks, mobile surrounds you. Mobile encompasses every aspect of our life. Mobile allows for ease of life, which for those of you who obviously lack vision, means that it is necessary for the future.

Why has Apple been the tech baby of the last decade? They have taken mobile to the next level. They invented the smartphone. By the end of the year they will take it to the next level by making the world between your phone and television one in the same. Microsoft recently announced their launch of the next big tablet. This may be insignificant for many of you, who believe apple cannot be touched, though with an actual quality product by the PC giant Microsoft, the number 2 spot in the tablet world is now up for sale. No matter who stands on the leader pole of the tablet or smartphone industry, one thing remains, the future and dominance of the app world.

The mobile space continues to heat up, as I have said for some time, and with the launch of the the surface tablet, even old tech is decisively saying that the future is in handheld devices (phones and tablets). This means one thing: mobile gaming. We all know the story of Microsoft and Apple. The masses have failed to capture the mobile gaming tale. In the coming months as we will see mobile gamers like Zynga balance social and mobile gaming, pumping gangster rap in an electric powered car headed  forward towards a bright future. The mobile phase has just begun. As we see better monetization and a wider customer base in the coming months Zynga shall eat the shorts for a late night snack.

Don’t get me wrong either, Zynga is not the only soon to be giant to benefit from this continued trend towards mobile and tablets. Companies like Yelp, Facebook, Twitter, LinkedIn, and the list goes on, will benefit handsomely. One of the basic ideals instilled in every trader is to not fight the trend. The trend is smacking you in the face. Mobile, tablets, they are here to stay. The world of apps has just gotten started and those stupid enough to fight the trend will capitulate when its far too late. The results will be disastrous for the shorts and they will not be able to find a building high enough.

Photo by Sam Howzit

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Inspirational Weekend Post

Continuous effort – not strength or intelligence – is the key to unlocking our potential.” -Winston Churchill

We all have goals and ambitions, some bigger than others. It is always good to take a moment and focus on the direction we are headed. With the excitement that is to come in the following weeks it is best to take a Saturday and remember why we do what we do. Maybe you get up at 5 A.M. for your family, for yourself, for your love of trading. Remember why you do what you do, what your long term goals are, and this will ensure that the next challenge that arises you will take in stride. Ensure that you are putting out “continuous effort” and this will guarantee that you are on the path to accomplish your goals. Success is not an overnight event, it is an effect that has many causes from a wide range of times and avenues (as the best traders know, the best trade is not a one day 10 % win but rather that 6 month 100% return) . Take today to clear your head, put that to do list aside, and prepare to conquer your long term goals.

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My Research Note

Analysts just like a vast majority of traders are reactive rather than proactive. This does not bode well for your portfolio or mine. Over the trading day today, Zynga has been beaten, mutilated, with no regard to its true potential. I had thought over the past week that the suffering had come to a halt, that possibly the end was near. Instead, more have capitulated, more have ran, the price has continued to decline on huge volume. Today the masses have left in exodus due to a negative research note. This note merely supported my earlier thesis stated this year, that Zynga was set up to own the mobile space, and profit handsomely from it.

As I have mentioned in my previous research notes (Assuming Social Media and Mobile Are Dead and Looking Past The Facebook IPO At The Future Of Zynga), which may be more vetted then the piece published today, Zynga has set themselves up to capture the whole of mobile. Zynga has taken the door Facebook has opened for them, profited from it, and has now opened the door of mobile. Why in the world would Zynga buy OMGPOP? Well the masses believe it was to throw away a few hundred million. Those with a little common sense can see it was to become a more dominant force in the mobile community. You think that if the Facebook gaming community was declining Zynga wouldn’t know about this, wouldn’t have made plans to profit elsewhere? Really? Contrary to popular belief Zynga desires to be profitable and make money for themselves, as well as shareholders. They have been setting themselves up for quite sometime to capture the mobile platform, along with the Facebook, Google play, internet, and soon to be iTV platform. As the rest of the year plays out, as we see many potential sellers turn into investors due to the dramatic price decline, things will get better, if not great for Zynga.

Of course when many around you, including those in the know, suggest a stock is headed towards $0.00 it is easy to capitulate. It is easy to suggest that death is near and that the company has no future. Well more often than not the right trade is never easy, just ask those who bought Yelp at $15.00 last week. Just ask those who bought Zillow at $20 last year when it was headed towards the abyss. Social media will be profitable, especially with the push from investors to monetize mobile. Facebook will monetize, succeed handsomely, and social media will be a darling once again. If you fear that social media isn’t the future, just buy Apple, oh wait isn’t that tied to mobile? That’s right the tech darling of the industry is betting on mobile as well, so I will continue to bet on mobile, elsewhere, where the returns are greater. Mobile is the future, Zynga has been and will continue to be positioned for this. The social media premium has long left us, but it will return. The growth is obvious in the mobile area and as I said in the past, Zynga is set up to profit from many platforms, many cell manufactures, be that of Google, Apple, or the next big thing.

Zynga is about to pull an OJ.. be prepared.

Photo by Marc van der Chijs

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