May 5, 2014

Doug Kass says dont buy social media stocks

Despite the recent drop in the Nasdaq, Facebook (FB) still possesses a $140 billion market cap. Twitter's capitalization exceeds $24 billion. 

LinkedIn (LNKD) trades at a market cap of more than $19 billion and a cool 750x earnings. Salesforce (CRM), which has been an awful stock, still has a $32 billion market cap (with financial statements that belong in the clouds because they are so damn confusing). 

Tesla (TSLA), down $60 from its high, is still priced as if gasoline won't have a commercial use in five years. 

Zillow (Z), although its commercials are touching, is priced at 20x sales, and last time I checked, it sells advertising and subscriptions. 

Then there is Yelp YELP, a collection of restaurant (and other) reviews, clocking in at 20x revenue.

Bottom line: Avoid the whole social media space and cover your ears when talking heads, people in flip flops with MBAs and those walking into traffic on their smartphones tell you otherwise.


via http://www.thestreet.com/story/12694181/1/economy-not-in-recession-short-in-may-and-go-away-best-of-kass.html

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