Hello SOTGC community,
Last month I wrote an article entitled, “How Can I Buy Twitter Stock?” Now that Twitter’s stock is trading on the New York Stock Exchange (NYSE) under the symbol TWTR, anyone with a self-directed brokerage account or financial advisor can buy shares in the company. But should you buy TWTR, and should you buy it now?
Although I do provide specific investment advice to my clients at Coastwise Capital Group, I cannot provide buy or sell recommendations through an article like this because each of the hundreds of readers has her own individual financial circumstances. What I can do in this article is provide tools for you to conduct your own analysis, just as I do for clients of The Options Lady’s three-month coaching program.
On Thursday, Nov 7, TWTR opened for trading at $45.10, a pop of 73% on its $26 offering price. I’m going to go out on a limb and assume that the vast majority of you reading this article were not able to access any shares at the offering price. So, did you place an order to buy TWTR sometime Thursday? Perhaps you snagged some shares for between $45 and $50 a share. In hindsight, you may have wished you hadn’t.
On just the second day of trading which was yesterday, TWTR closed at only $41.65. Had you bought the day before, you’re staring at paper losses of between 7 and 17 percent! If you haven’t bought yet, you may be wondering if now is a good time to buy. The answer depends upon not only what you think about the company and its prospects, but also where you think the overall stock market is headed. After 33 record-high closes this year, an increasing number of investors believe the stock market has become frothy and is ready for a pullback. There are a lot of opinions on whether Twitter is “undervalued” or “overvalued” and you can Google many articles like this one in Forbes.
I’m expecting options on TWTR to begin trading Nov 15. That will give investors who want to purchase Twitter stock the ability to obtain downside protection should the stock continue declining in price, by using strategies such as the “married put,” “covered call,” or “collar.” Suze Orman explains why she loves covered calls in this video. If you are intrigued by her video, I’m teaching how to trade covered calls during my four week investing basics class called, What Your Financial Advisor Never Taught You. The first class begins Nov 21 and is open to both men and women in San Diego. You can register here.
Laurie Itkin is an investment advisor with Coastwise Capital Group and founder of The Options Lady. She is author of the forthcoming book, Every Woman Should Know Her Options: Invest Your Way to Financial Empowerment. Sign up for her free monthly newsletter at www.theoptionslady.com.