And I still hold to the view that fair market value is about 5% to 8% lower than current stock prices.

With this confusion, I expect a volatile market good for opportunistic traders, and that is my mantra through the rest of the year.


Twitter Explains Everything (Part Deux)
Originally published on Thursday, Nov. 7 at 7:36 a.m. EDT.

Good morning, Tweetnam!

Yesterday the media tried to make the case that mo-mo stocks were the source of selling to fund Twitter ( TWTR) IPO purchases.

This is total hogwash, and unfortunately, we have grown accustomed to these sorts of banal observations from the ratings-hungry, obtuse and superficial business media.

Even our own Paul "The" Price "Is Right" wrote:
One theory holds that the $1.8 billion or so going into Twitter must be coming out of other momentum-type shares. Could that be the reason many were down big today?

Only the sellers know for sure. The money to pay for the IPO has to come from somewhere.

Respectfully, that is Silly Town, and the notion is nonsense.

Not only is Twitter only selling about $1.8 billion of new stock but most of the stock is going to institutions with large assets under management that have plenty of available cash reserves so that they need not sell a single share of another stock to fund their Twitter allocation.

Stated simply, selling Netflix ( NFLX), Tesla ( TSLA) or Amazon ( AMZN) to buy Twitter is not the way the game is played.

As I facetiously wrote last night:
Qualcomm's (QCOM) forward chip shipment guidance suffers as companies hold back orders so they can participate in the Twitter IPO.

Whole Foods Market's (WFM) comps also suffer as consumers hold back grocery purchases in order to play the Twitter IPO as well (hat tip Zero Hedge).

Today the media will be all about the trading action of the Twitter offering.

We will hear the following song 40 times today via Bloomberg and CNBC:
He rocks in the tree tops all day long
Hoppin' and a-boppin' and singing his song
All the little birdies on Jaybird Street
Love to hear the robin go tweet tweet tweet!

-- Leon Rene under the pseudonym of Jimmie Thomas (popularized by Bobby Day and Michael Jackson), "Rockin' Robin"

Similar to the Facebook ( FB) IPO fiasco, which was never expected by the media (though it was by us!), we will be inundated with this sideshow to the markets.

Me? I would rather watch/discuss the ECB's decision or the divergence of the lesser averages relative to the DJIA or how the New York Yankees will launch a 2014 comeback.

Anything but Twitter.

At the time of original publication, Kass had no positions in the stocks mentioned.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

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