Apple, 21st Century Fox, Twitter: Morning Musings

NEW YORK (Real Money Pro) -- Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings. David Katz of Matrix Asset Management stood in for Kass on Thursday, June 11.



A Little Color on the Apple Watch

Originally published at 12:48 P.M. EDT on Thursday, June 11, 2015

One of the many questions about Apple  (AAPL) stock over the short to intermediate term is the future of the Apple Watch. The following are brief thoughts on the watch, with two links from techies who are weighing in on the product from the end-user perspective.

The first is a clip from well-known tech blogger Marques Brownlee, who likes the technology but says it's not a must-have product.

As an additional bonus, I have included a tutorial from my daughter's You Tube Channel, Nothing ButTech88, which walks potential users through all aspects of the Apple Watch's features. Interestingly, this 20-minute spot demonstrates most all of the features of the watch and brings a user fully up to speed on its usage. She provides a consumer perspective from the teenage to mid-20s demographic. In my daughter's case she is more upbeat than the first blogger, and while she agrees that it's not a must-have product, she feels that once the user becomes accustomed to using it, they will get spoiled by it and not want to ever go without it

My take: From a technology perspective, the Apple Watch is as strong a product as the iPhone or iPad. It is tremendously easy to use and most will be expert in the majority of the functions within a few days. But the screen is small and is tougher for us middle-aged folks to read and type on. I love my iPhone and iPad, but I don't expect to be getting the Apple Watch for myself.

Best guess, in its current form the Apple Watch will be a great niche technology, but I don't expect it to be a mass market hit like many of Apple's other blockbuster products.


Murdoch Elevating Son at Fox?

Originally published at 2:11 P.M. EDT on Thursday, June 11, 2015

It Looks Like Rupert Murdoch Will Be Elevating His Son James to the CEO of 21stCentury Fox ( FOXA).

Bloomberg is reporting that an unidentified person familiar with the matter is confirming that Rupert Murdoch is preparing to step down as CEO of 21st Century Fox and turn the reigns over to his son, James.

As chairman, founder and major stockholder, Rupert will still be calling the shots at Fox for the foreseeable future. It is also rumored that his other son, Lachlan, will be Co-executive Chairman. Currently, both sons are Co-COO's.

I think that this is just the natural course of business to transition the company from Rupert to his sons. I would expect 21st Century Fox to continue with its long-term strategy to be a leading consolidator in the global media industry. Fox made an unsuccessful attempt to acquire Time Warner in the past year. I would expect a run at another firm eventually.

While FOXA is a valuable and well run franchise at 19.3x 2015 earnings, we think it's about fairly valued.

One name that I find interesting is Viacom (VIAB) This is also a firm with an aging founder, Sumner Redstone, but without a clear family transition plan. In his case, I think there is a possibility that the company could be sold by Sumner Redstone, or his family, at some point. Their size puts them at a competitive disadvantage to the likes of a 21stCentury Fox, Comcast, Disney or Time Warner in the emerging mega-media landscape.

With or without a sale, we think VIAB stock is way too cheap at 11.7x 2015 earnings and we continue to increase our position here.



If I Were King of Twitter

Originally published at 12:27 P.M. EDT on Friday , June 12, 2015

In a post on Twitter  (TWTR) this morning I highlighted the company's challenges that the company needs to address:

  • How to scale Twitter into less of a niche product and more of a mainstream product.
  • Expanding the base of monthly average users.
  • Improving monetization by attracting large-scale advertisers.
  • Creating a more-appealing product for the masses in a rapidly changing backdrop.
  • Better defining to consumers what the company's event-driven platform stands for.

If I was the CEO of Twitter here are 10 things I would immediately address:

1. Ease of Use and Simplify Navigation -- Shorten the learning curve experience and improve organization by creating a button/tab/channel for a user to immediately establish a broad and representative list of engagements and "follows." Buttons/tab/channel should be "sorted" for political news and opinion, sports (you name the category), investment and economic news, technology, entertainment, etc. Organizing popular content is basic and easy to implement.

2. A More Focused Experience Is Necessary

3. Be More Event Driven -- Create an easy way to know when major events are occurring and ability to access major events. Human content/narration could improve experience measurably.

4. Stop the Haters -- It ruins the Twitter experience.

5. Establish More Partnership Relationships -- At all levels.

6. Improve Advertising Relationships -- Twitter can do this by being more proactive with large-scale advertisers.

7. Memorize Chris Sacca's Letter -- And implement most of the suggestions in order to make TWTR "effortless to enjoy, easier for all to participate and make each of us on Twitter feel heard and valuable."

8. Create a Best of Twitter -- Like the cover of The New York Times, New York Post, LA Times, Huff Post, all combined.

9. Improve the Integration and Experience of Periscope

10. Implement an Ability to Archive (in Simple Terms!)

At the time of publication, Kass and/or his funds were long TWTR although holdings can change at any time. David Katz's Matrix is long VIAB.

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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