Posts Tagged ‘Twitter’

Twitter and Corporate Censorship

January 13, 2021

Yesterday, January 12, 2021, Forbes magazine published a guest commentary by veteran stock analyst Jim Collins on its website that criticized Twitter CEO Jack Dorsey’s unilateral decision to de-platform President Trump, while urging users to dump the social media platform and short sell its stock.

Today, the article has been pulled down, sort of, under the fig leaf that it violated Forbes’ terms of service. If you click on the article URL below the piece will still come up (as of this writing), only to fade to near-white in seconds as an editor’s note stating that the page is no longer active fades into view.

This leads us to wonder how the piece got posted in the first place, considering Collins makes no bones about his opinion of Dorsey, “I think that Twitter CEO Jack Dorsey is a pathological liar as well as a horrible human being, so I don’t  believe Twitter’s user numbers at all.”

You also have to wonder why the article still exists on Forbes’ website? You can still make it out behind the editor’s note. Why not just pull it and be done with it.

Fortunately, we were able to save a copy of Jim Collin’s verboten article, which you can read below, before the corporate censors could erase it. Read it for yourselves and come to your own conclusions, which is the last thing the Media companies want you to do.

While we have no dealings with the stock market, we think Jim Collins closes his piece with sound advice for everyone: “Only you and I can fight that war and destroy Twitter’s base.  So, delete your account, and short the stock.  Making money while doing the right thing feels extra good…doesn’t it?”

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https://www.forbes.com/sites/jimcollins/2021/01/11/twitter-is-the-worst-company-on-planet-earth–heres-how-to-bet-against-the-stock-and-deactivate-your-account/?sh=19ed2d305ba3

Twitter Is The Worst Company On Planet Earth. Here’s How To Bet Against The Stock—and Deactivate Your Account

Jim Collins 10:49am EST

It is rare a that a public company stretches so far into the realm of abhorrent behavior, but Twitter’s TWTR -2.4% actions last week revulsed me more than Union Carbide’s Bhopal, Boeing’s BA +0.8% repeated failures with the 787 Max, J&J’s JILL +5.5% Tylenol scandal and really any other corporate action I have seen in my lifetime.

For a social media platform to censor a world leader—while still giving a voice to preachers of hate like Louis Farrakhan Iran’s Ayatollah Khamenei and even O.J. Simpson—isn’t just wrong from a free speech perspective, it’s actually terrible business.  So, Twitter has shown little to no sequential growth in its user base of late (details below) but it is still valued like its Big Tech growth-y brethren.  Twitter is not growing, it is shrinking, if measured versus the growth rate of the global economy, and that reduction will accelerate dramatically now that Twitter has offended every Conservative in America with its action to ban President Trump. Only fools in Congress and Big Tech apologists would think that Section 230 of the Communications Decency Act should apply to Twitter.  It is a publisher, not a platform.  Full stop.

So, first and foremost, here is how to deactivate your Twitter account.  I used this excellent article from the Today show last week to kill my account.  It took me more than half an hour, and making it difficult to leave is a classic Big Tech strategy for bolstering user numbers, but eventually I succeeded.  It was worth it.  I will never use that platform again.  

But I do stocks, not activism, and even if a new type of conscious capitalism is my investment strategy for 2021, I still need to make some money. Twitter shares are plunging 7% in pre-market trading Monday, and the market will soon realize that this platform is going to shrink dramatically.  Even on a good day, Twitter is a cesspool of hate speech, lies (including investment advice) and a “trending” algorithm that seems to have a remarkably consistent left-wing bias. I will not be the last person to cancel it. 

I have never interacted with an ad on Twitter (or Facebook) and I would never spend a dime with a company that tried to reach me through a private social media channel. I don’t do “cancel culture” but I believe Twitter will become radioactive for advertisers, as half the US is revolted by what they have done, and that’s not good for business. 

Twitter’s self-reported user base grew at a whopping 1% sequentially in 3Q20, with 1% growth internationally and 0% in the U.S.  The comparisons were much better on a year-on-year basis (+29% overall) but remember that 2020 was an extraordinary year for news flow.  But Twitter is not news.  I think that Twitter CEO Jack Dorsey is a pathological liar as well as a horrible human being, so I don’t  believe Twitter’s user numbers at all.  The mDAU metric that Twitter now uses reflects, and clearly they will keep changing metrics until they find one that looks decent.  This is a classic Big Tech maneuver.  

In dollars, though, Twitter generated $936 million (million, not billion, this is a small company) in revenues in the third quarter and produced a very low (for Big Tech) 6% operating margin and 3% net margin. So, after a whopping $1 billion loss in Q2, Twitter recovered to make $28 million in the third quarter.  Wow!  That’s just…irrelevant.

With negative free cash flow of $74 million in Q3,  but $7.6 billion of cash and securities on the balance sheet, Twitter is worth more than zero, but extraordinarily less than the $51.48 per share the market was according TWTR stock Friday.  Yes, we have completely forgotten how to value stocks.  Twitter is not the only one but it is the easy one. 

With earnings power of less than $1 billion (TWTR reported net income of $1.469 billion in 2019 and will be nowhere near that in 2020) I think this is a steady-state stock.  No growth, no dividend, and no free cash flow to speak of.  That doesn’t deserve even a market multiple, but since it’s tech, let’s give TWTR the insane 25x real earnings power that the S&P 500 is granted.  So, add about $5 billion cash (net of debt,) a real cash earnings power of about $750 annually and use the 800 million shares outstanding as of 9/30 and you get a fair value for Twitter of just below $30 per share. But Twitter’s user base has shrunk dramatically in the past week, I believe, and so $30 is really more of a best-case scenario on earnings power that won’t exist with a smaller user base.  

So, let’s say someone thought TWTR’s fair value was in the high-$20s and would pay $20 for TWTR, to imply an attractive return, and use that as our share price target,  That implies a decline of more than 50% from current levels.  How long will it take to get there?  Not long in my opinion.  Plus, when trading options, you have to take into account the overreaction that always occurs with an inflective event.  Do I think Twitter shares will trade below $20, at least temporarily at some point between now and the end of March?  Hell, yeah.

So, when searching for that perfect option contract, always look for one with a decent amount of  contracts outstanding (which implies a more efficiently-priced contract) and a relatively low implied volatility, I see March 19th 2021 TWTR $25 puts quoted at $0.13 this morning, and, man, I gotta get me some of that.  Pre-market quotes are notoriously unreliable for deep-out-of-the-money options contracts, so let the market open and let it trade a little before you buy,  That’s what I will do today for my personal account and for my most risk-aware clients.  

So, that’s how to make money betting against Twitter.  The new conscious capitalism of 2021 entails fighting Big Tech censorship and the monopolistic power that those companies wield.  Not only is Jack Dorsey at Twitter a revolting human stain (as proven by this Congressional testimony and takedown by Senator Ted Cruz) his company isn’t that big or growing that fast—and is about to shrink.  I am uncomfortable sometimes with Amazon’s AMZN +0.2% power, but I won’t be unsubscribing from Prime any time soon, and I don’t have the guts to bet against Jeff Bezos’ stock. But Dorsey is not Bezos and TWTR is no AMZN.  

Twitter is a faux-tech outfit with no competitive moat and a customer base filled with—it would seem—idiots.  It’s too small to be considered Big Tech, but the media has given it outsized influence.   Only you and I can fight that war and destroy Twitter’s base.  So, delete your account, and short the stock.  Making money while doing the right thing feels extra good…doesn’t it?

ADL – Anti-Semitic Posts on Twitter

May 13, 2018

A recent report released by the Anti-Defamation League (ADL) claims that the organization tracked some 4.2 million anti-Semitic tweets between January 2017 and January 2018. The Media, both traditional and social, repeated the claims widely, giving an impression that Twitter was a hotbed of anti-Semitism.

As with all matters concerning “hate,” in the Media, a closer look is warranted.

First off, anti-Semitism is a very real and a very dangerous social phenomenon. While even one hateful tweet is one too many, the definition of “hate” is nebulous at best and often tailored to the goals of the people defining it. To fully understand the reality on the ground it is imperative to review the definitions and methodologies used in creating  such reports. Let’s check the facts.

The ADL’s report, Quantifying Hate: A Year of Anti-Semitism on Twitter (no authors are named) claims that a review of English language tweets over 2017, using both computer algorithms and human review, yielded 4.2 million anti-Semitic tweets and re-tweets by 3 million users.

“The current findings are based on a complex Boolean query designed to identify language frequently used by anti-Semites.

The query was broadly written to encompass obvious expressions of anti-Semitism, including classic anti-Semitic stereotypes; code words and symbols sometimes used in an anti-Semitic fashion; and also subtle references to anti-Semitic conspiracy theories.”

The query was indeed “broadly written” and was “designed to detect anti-Semitism in the following categories:

  1. Classic anti-Semitic stereotypes (e.g. references to Jews as greedy; controllers of banks, media, governments and academia; under-miners of culture and racial purity; cursed for killing Jesus; etc.)

  2. Positive references to or promotion of known anti-Semitic personalities, authors, books, articles, videos and podcasts

  3. References to anti-Semitic conspiracy theories (e.g. Jewish control of the Federal Reserve; the existence of a “Zionist Occupation Government,” etc.)

  4. Holocaust denial

  5. Epithets used for Jews (e.g. “kike”) and against Jews (e.g. “goddamn Jews”)

  6. Code words and anti-Semitic symbols such as the “echo symbol” (“((( )))”)

The current report includes criticism of Israel or Zionism when such criticism makes use of classic anti-Semitic language or conspiracy theories, or when it ascribes evil motivations to significant numbers of Jews. General criticism of Israel or its policies is not counted as anti-Semitism.

That covers a lot of territory, and, as the report’s Table of Contents indicates, includes several topics that may be, at best, tangentially associated with actual anti-Semitism.

ADL TOC

Including references to Harvey Weinstein, George Soros, Zionism and “globalists” will undoubtedly uncover many genuine anti-Semitic references but will also include many legitimate criticisms of cultural and political movements and players.

Let’s dig a little deeper:

  • As of 2017, Twitter had 330 million active users, of which 100 million were active daily
  • Over 500,000,000 tweets are sent every day, or 182 BILLION a year. A 2012 survey estimated that 38% of all tweets were in English, though this percentage has most certainly changed since then. The ADL study limited its sample to English language tweets only.
  • The United States makes up 21% of all Twitter users worldwide. Lacking demographic data later than the 2012 report referenced above, and excluding all tweets from other English speaking countries, (The UK, Canada, Australia, New Zealand, etc.) and tweets in English from other countries, a simple one-for-one extrapolation (21% of users accounting for 21% of tweets) would suggest that Americans sent more than 38 billion tweets in 2017.

    Obviously, not all American tweets were in English, but even 75% of this incredibly low-balled estimate would yield 28 billion tweets, of which the ADL found 4 million to be questionable, or .014%.

  • An ADL press release notes that, whatever the actual number of English tweets studied for 2017, only 55,000 “were manually reviewed for the presence of anti-Semitism.”
  • A 2017 peer-reviewed study estimated that between nine and 15% of all Twitter users were computer generated “bots.”

In short, the methodology used in the ADL’s Twitter report was, at best, “broad,” and at worst, unreliable. The report includes a disclaimer referencing “the rise of ‘QAnon’ conspiracy theories” that illustrates just how broadly the term “anti-Semitism” was interpreted:

“The vast majority of QAnon-inspired conspiracy theories have nothing to do with anti-Semitism. However, a small percentage of tweets referencing QAnon also referred to Israel, Jews, Zionists, Rothschilds … , or George Soros. 

This study’s methodology does not allow us to determine how many of the QAnon tweets containing those terms actually expressed anti-Semitic sentiment, but an impressionistic review revealed some troubling examples.”

“Impressionistic reviews” revealing “some troubling examples” are not the stuff of hard research. It should be noted that the Anti-Defamation League, like the Southern Poverty Law Center (SPLC), is a private “advocacy group,” which by its very definition means that the organization is “advocating” a particular point of view.

Online tax records indicate that the ADL averaged between $50- and $60 million dollars in donations a year between 2011 and 2016, with 2% to 2.5% of that money going to “program services,” such as this anonymous survey, and 40% to 45% going to “Executive compensation, other salaries and wages.”

With tens of millions of dollars in compensation at stake, a strong financial incentive to interpret anti-Semitism as broadly as possible cannot be ignored.

As we noted at the beginning of this post, the Media, in all its forms, gladly repeats the claims of the ADL and SPLC without performing any review. Lurid claims of “hate groups” everywhere and anti-Semitism on the rise make for profitable click bait. The Media also have an undeniable financial incentive for promoting such “reports” without ever asking to see the evidence.

Again, anti-Semitism is a very real thing and must not be tolerated in any way, but lumping criticism of George Soros’ political activities and re-tweets of anonymous QAnon conspiracy theories is not a legitimate method of documenting it.

Research for the report was allegedly performed by two ADL in-house organizations, the ADL’s Center on Extremism and Center on Technology and Society, with no external peer review or oversight.

If the data is good the results ought to be easily replicable independently. Anonymous reports generated by in-house organs simply do not meet basic research standards.

Big claims demand big proof and the ADL needs to show its work. A poorly estimated 4 million suspicious tweets out of tens of billions posted in 2017 is statistically insignificant.

Prove it or remove it.


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