 Folks, the topic of today's video is going to be the projected stock price performance of Twitter as we move into the new trading week and we'll project out as to where we believe that Twitter is heading longer term. So the topics that we're going to be talking about on this video are the wise. Why are we talking about Twitter today, Saturday, January the 9th, 2021. Then we're going to segue over into a fundamental analysis of Twitter. We'll take a look at earnings per share rank. It's standing relative to its peers in the same category and industry group. Then we're going to segue over into the Trump effect. What influence has President Trump had on the company over the past four odd years? Then we're going to segue over into the technical analysis of the stock chart of Twitter and I'll give you my thoughts of as to where I believe that the share price may be going short term, long term. Then we're going to talk about the impact of one party rule and whether or not it's going to be favorable towards Twitter and the other social media companies. But before we get started, I want to introduce you to our sponsor, our sponsor being TrendSpider. TrendSpider is the next generation in automated technical analysis. You need to in these days automate your grunt work. We don't have time to use legacy archaic charting software. We need to be able to draw our trend lines with the click of a button. You need to be able to speed up your technical analysis because time is precious. But speeding up the time you spend on your technical analysis, you need to be able to also maintain and improve the accuracy of your technical analysis and reduce costly analytical mistakes. With TrendSpider and their scanning features, you're going to be able to find those winning chart setups and time your trades with precision by using their alerts. You're going to see me use the alerts in this commentary. Act now. Take advantage of our 35% discount using that link below. They have a seven day free trial offer. Frankly, I believe in TrendSpider so much I've included it in our silver and gold lever memberships so you could either join and buy their product directly through TrendSpider using the link below. A seven day free trial offer or if you want to sign up become a member of the contrarian trader where you engage with me one to one either in the live streams where we review your symbols or while we engage in the forum and you get TrendSpider for free in the version of TrendSpider that I'll be using is the exact same version that you get free as a member. So TrendSpider act now use that link below 35% off. So let's get to it. What I want to avoid in this commentary is I want to avoid politics. I want to stay purely fact based and I want to talk about the impact that Jack Dorsey's decision, Jack Dorsey being the CEO and founder of Twitter, what impact will that have on the share price moving forward? Now on January the eighth after the stock market closed, Twitter permanently bans Trump's account. President Trump had 85 million followers on Twitter. The rationale of as to why Twitter decided to delete the president's account. The social media network says it took the rare action due to the risk of further incitement of violence after a deadly riot on Capitol Hill. I am not here to be judge or jury. These are the facts and that's all we are going to deal with are the facts. So the president's account was deleted. He no longer has access. So the question is, as an analyst, as a trader, I want to know what impact this is going to have on the share price of Twitter moving forward. So let's take a look at their fundamentals and you may be asking, you know, why do the fundamentals have anything to do with the banning of the president from their platform? Well the value that we get by taking a look at the fundamentals is that what we're looking at are the fundamentals based upon a time period where the president was posting on Twitter. He had 85 million followers. So I would argue that with 85 million followers, he attracted a large number of people to the platform who may have not ordinarily have come to the platform. That's my anecdotal opinion. We're going to become a little bit more fact based as we move forward in this commentary once we get to the Trump effect, which is coming up. So to begin with, Twitter is in the internet content group. Within that group, Twitter is ranked number 16 out of 16 members of that group. So it's at the lower end in terms of fundamentals and technical performance. It has a composite rating of 69, which is fairly weak earnings per share rating. Not strong. This is a rating of 26. The scale is 1 to 99. Relative strength of the share price, fairly strong. This is a measure of the share price over a 12 month moving period. It scores a 76. The group strength scores a B plus, meaning the internet content group. Its accumulation distribution is a B. So that implies that the share price remains net net over the past 13 weeks under accumulation. Now it's annual ROE, ROE is return on equity. That is the efficiency of the management of the company, and it scores a 24%. That's a very, very good number. But unfortunately, that's about as positive as I can get on Twitter because when you take a look at its earnings per share last quarter, it was 12% respectable. The however is, is that its three year EPS growth is 0%. Its three year sales growth rate, 14%, not impressive, not for a growth stock. And Twitter will be reporting earnings on February the 9th, 2021. Now the thing to remember about that earnings date is this. The earnings that they'll announce is as of the end of business, December the 31st, 2020. It will not include any positive or adverse impact on Twitter's earnings in Q1 of 2021. The however there is that their forward looking guidance will have to be amended, positive, negative, neutral. They will have to address this during their conference call. So have no doubt. Over the night, 2021 is going to be a very, very volatile day for Twitter shares. And this data is sourced by investors.com. So now I want to talk about the Trump effect on Twitter and the ripple effect that the decision that Twitter had to ban the president and what has happened thus far. I mentioned early that roughly 60,000 people, some high profile, but one of those folks that is no longer on Twitter, but was not banned. He opted to delete his own account was none other than Rush Limbaugh, who had 600,000 followers. Other high profile folks that were deleted, General Michael Flynn, Sidney Powell, I believe Linwood, Justin A. Mafiu. This is off of Newsmax and Rasmussen, which is one of the top firms in terms of polling. President Trump's approval ratings have only gone up. They were at 45% before Christmas, immediately post DC protests as the establishment Republicans, the Rhinos and the Democrats call for the removal of the president vis-a-vis 25th amendment. That's the amendment that grants powers to the president's cabinet and vice president to vote to remove the president from office due to being unfit to hold the office. At that point in time, his rating had moved from 45% up to 48% as of Thursday evening prior to the removal from Twitter. His approval rating jumped up to 51%. Those are some serious moves and certainly counterintuitive to what I had expected. Drilling down further as to the impact of President Trump and what it has on Twitter, This is an article off of Fact Tank News in the numbers. I'll post this link and all these links down below in the video description area. This is dated as of July 15, 2019, about one in five adult Twitter users in the US follow Trump. And this data is according to the Pew Research Center Analysis, roughly a third of Republicans on the platform follow the president. The specific number is 31%. And here's a fascinating number. Among those users who follow Trump on the platform, 54%. Remember this is as of July of 2020, 54% approved of his job performance as late as 2018 compared with 24% of adult users who don't follow the president. So one could argue that one of the main reasons that Republicans anyway use Twitter is simply to follow the president to stay up with the news. Now this piece here is kind of interesting in that while considerable shares of adult Twitter users in the US follow Trump and other political figures, it's important to keep in mind that relatively few Americans are on Twitter in the first place and it's roughly 22% of US adults. So if you're a user of Twitter and you follow the president, more likely than not, you're educated, you're passionate, and that you're going to have a fairly strong opinion because you're on the platform to be heard and to stay in close contact with those folks that you're interested in, whether you agree with them or not, so that you can avoid the filter of the news media. Now this article here, what is Trump worth to Twitter? One analyst estimate is $2 billion. This is off of fortune. Again, I'm going to link to all these articles down below so you can take a moment and review them for yourself. And I would really encourage you, please, leave a comment below if you agree, disagree. This article was written on August 17, 2017, so a bit dated, but in a way it's good. The analysis was done by James Kackmack of Monus Crespiid Hart and his conclusion is this, and if I find this really interesting, it's not that the president's defection would touch off a mass exodus, lowering the number of monetizable daily active users. Instead, losing its most prominent user would hit Twitter's intangible value and lead to what it's known as multiple compression. What does that mean? What that means is that the intrinsic value of the company is reduced by the factor of the value that the president bring to the platform. And given these hostile times where the country is so polarized, I kind of think that this may have changed, meaning seeing a mass exodus. And perhaps it won't be massed, but there will be somewhat of an exodus and to support his comment with regard to the 10 intangible value. It's this, there is no better free advertising in the world than the president of the United States. Think about it. Think about all the articles that have been published on any news platform on the internet. How many have links to a tweet from the president of the United States or reply to it or retweet from the president of the United States? Think about it. It's rare when you don't see a tweet. That is now gone. So I think we can conclude from James Kakeman's analysis of the intangible value of having the president on their platform, Twitter's platform. This is not going to be good for Twitter. Think about all the free advertising on high profile platforms that is received. They no longer are going to have that. Moving on to the technical analysis of Twitter. I let off with that last story for a reason because remember it was written back in 2017 in August. And this is a monthly chart of Twitter since that point in time. Now, what I want to do first is share with you a couple of things. Twitter came public in 2013. It hit a high in Q4 2013 of $74.73. We have never seen the immediate post IPO price on Twitter, despite the fact that you've had the president on the platform and he's no longer there. The president was elected in 2016. He took office in January of 17. And since that article was written in August of 2017, the share price has risen, we'll round this off, 275%. Now, frankly, having been a Twitter user for many, many years now, I don't see much change about the platform. Periscope, I believe is new since then. He has changed the number of characters you could put into a tweet. But I'm challenged as to figure out what more in terms of change and value add that Twitter's provided to its customers. One could argue that a good percentage, it's anyone's guess, a good percentage of this 275% has been the high-profile exposure that Twitter has had vis-a-vis President Trump being on that platform. Now, here's where things get a little bit dicey. Even with the value add of the president being on the platform, we have never, ever been able to take out the IPO highs of 2013. Now that you have the president no longer on the platform, what I need is a catalyst as a potential investor. I need somebody to tell me a story. If you've just gotten rid of whether you like him or hate him, the most high-profile individual on your platform, what is going to keep this stock moving higher? And before we go to the price action of Twitter shares after hours on Friday afternoon, after announcing the ban, I want to point something out to you. As of the 8th of January, we have yet to take out the highs of December. That is generally not a good thing, especially when you have the S&P 500, which is trading at all-time highs. And it's been outperforming Twitter. It looks as though the S&P 500 may continue up higher. I'm using the word may because don't forget, and I'll go into this a little bit more as we wrap up with the one-party rule conversation and the impact that it will have on not just Twitter, but all the social media stocks as well. There will be a fallout. There will be a sympathy effect on Facebook, Google, due to Twitter's decision because they usually act in tandem. Once one bans, they all ban. Now before we go into a real deep dive technical analysis of Twitter moving forward, let's take a look at the price action after hours after they made this announcement. Now the chart that you're looking at now is a chart of Twitter. This is a four-hour chart, four-hour timeframe. And you can see that the share price of Twitter peaked out here on the 16th of December. And ever since then, we've been putting in a rounding top. Things were unwell. We had a double top. We broke down to new lower lows. Now to drill down to the after hours price action, on Friday after the announcement was made, the shares of Twitter traded down as low as 49.50 per share. They closed out the day on Friday at $51.48. So the market has spoken. This was the knee-jerk reaction. Do I know for a fact that the share price will open up down on Monday? No, of course not. But the knee-jerk reaction, which can be wrong, was to the downside. But personally, I believe it to be the right direction for the share price because we know that that intangible value that they could not put on their balance sheet as an asset, nor was it a liability, is now gone. Now this chart here is a monthly chart of Twitter using TrendSpider. The candlestick here does not reflect the lows of the after hours session. You could use this green line here to better the lowest 49.50. Let's make that accurate. Okay, 49.50. So the shares closed here at 49.50 in the after hours trading session. As mentioned earlier, we have yet to take out the December highs we've stalled out here. I will point out that 49.50 is not solid support. So the question that becomes, where is solid support? Let's use the automated trend lines on TrendSpider. Click a button. Now, what this chart is telling me, using the automated trend lines, TrendSpider is telling me that support is down at around $43.74, and that makes sense because you have a volume shelf down here, which would imply that you have buyers below. You also have, you can manually draw trend lines in support as well. You also have back here from July 19 and then in August 19, resistance at $43.44, which we ultimately broke out and above in September of this year, failed to hold it. Big, beautiful reversal bar in November, off to the races, then the stall in January. So what I wanna do here is I wanna create an alert. I wanna know when Twitter hits this support level, because that is the only price point at current. Maybe the weekly chart will influence me some, but as you're proceeding to the new trading week, I don't wanna know about Twitter until we hit support as noted by TrendSpider's automated trend lines. So the note to myself, Twitter, monthly support when this alert fires off, if it fires off, long entry, short-term swing trade, I would not be entering this as an investment and we'll keep this active for 30 days. And if we decide to trade it, I will be sending out alerts to members. We may be trading it short much sooner than many might be expecting. So that alert is set. Let's go down to a weekly chart. Now you can see that we've stalled out here and these are my manually driven support levels. Now when I use the automated trend lines, TrendSpider's picked up that we broke support last week and this does not include the after hours price action. Remember, we hit a low in the after hours of 49.50 down here. So absent the news regarding the president, Twitter was in a lot of trouble last week technically while the S&P 500 was making new all-time highs. So the relative performance of Twitter, absent the news about the president was already very, very poor. Daily chart. Now there's really not much to talk about here on the daily chart because I don't see a great trade setup. Again, this candlestick is not reflective of where it closed in the after hours session. It closed down here at $49.50 the low. We may just may have some support here at $46.63. It will support multiple times in November then again in December. In fact there's a launching pad in December. So significant support below. I want to set up an alert here. I want to know if it breaks through, touches or bounce, I want the whole boat. Now given that I am not looking to necessarily buy the shares at that price point, I did leave myself with a question. Does it bounce or does it break? Additional notes to self, Twitter critical support daily timeframe. I'll get alerted on a 10 minute bar and we'll keep this active for two weeks. Now what if Twitter is able to weather this selling on Monday morning and is able to hold support levels? What else could threaten Twitter besides the fact that the overall stock market is very, very expensive but nobody cares right now until it becomes a topic that everyone cares about. That time will come but the time is not now. So we'll leave that out of the equation. What I want to look at is this. Remember this is the same version of Trendspider that I use that is also offered free to my members, silver and gold level. The thing to remember here is that this really goes for those that are short. Let's go all the way back to the IPO date, seasonality. January is the second strongest month going back to 2013 for Twitter. It's usually up 75% of the times. The best month is August, up usually 86% of the times. So this is a plus in Twitter's column but what may hinder Twitter is this. What you're looking at here on the right sidebar is a feature provided by Trendspider called Analyst Estimates Twitter and it really just shows their recommendation and you can see here that of all of the analysts covering Twitter, of which there are 57, only 12 have a buy rating on Twitter. That's not much to begin with but the question I have is not if but when you begin to have these analysts issue hold and sell ratings on Twitter. A hold is akin to a sell and the price should react negatively. So this is a headwind. These 12 analysts are a headwind for Twitter. Now you can argue, Bob, you have 55 analysts out there that are able to issue upgrades on Twitter or reiterate buy ratings on Twitter to defend the shares. To be fair, that's accurate. Is it probable? No. In light of the analytical data I've just provided in terms of the intangible value and the price performance of Twitter since the president took office and used the platform, it's undeniable. And the conclusion that I have to draw here as an analyst is that this was not a decision made on behalf of the shareholders and the only other question I have remaining with regard to Twitter is this. Who is going to be the first law firm that files a class action lawsuit on behalf of shareholders? This is not going to end well for Twitter. And you may be saying, you know, Bob, it's a one-party rule now. The Democrats are in charge. They're going to protect Twitter. They're going to use the platform. Any chance of section 230 being repealed or being amended, that's shot now. Now, before I talk to you about one-party rule and what I think it means for the share price of Twitter, I want to talk to you about the psychology of Washington. And if there's one thing that Washington hates, it's competition. I'll tell you a quick story about the Panic of 1907, Stock Market Panic of 1907. If you ever read Remedicences of a Stock Operator, there's a chapter about the Panic of 1907. I strongly recommend that you read that book. Anyway, J.P. Morgan was the financier at the time. He was the Pimp-Mac Daddy. He was the Jamie Diamond of the time, but far larger. And he personally was able to put together a consortium of other bankers and bailed out Wall Street. That freaked out Washington. And it was only a few years later in 1913 that they created the Federal Reserve. And as you can see here, the blurb of Wikipedia, the following year, Senator Nelson W. Aldrich, a leading Republican, established the and shared a commission to investigate the crisis and propose future solutions leading to the creation of the Federal Reserve. Again, this link will be in the description area below. So why am I talking about this? How is this relevant to present day? Well, Twitter just blocked a sitting president of the United States. The big three tech monopolies, I think it's undeniable, were certainly biased in favor of President-elect Biden. And while President Biden and the other Democrats may be very, very pleased with the fact that the president no longer has as big as a megaphone to speak to the public with, to think that they're not taking heed of the hubris on being nice, the hubris of the tech giants by banning the sitting president of the United States of America is not going to go unnoticed because it can happen to them. These companies may not be a imminent threat, but they are a threat nonetheless. And the best time to take care of your enemy is when you're not their enemy, case in point. Elizabeth Warren is a very liberal senator from the state of Massachusetts. She has posted nothing negative or positive with regard to the banning of the president of the United States on Twitter. She has been a very, very vocal proponent against the tech giants. This is off of Elizabeth Warren's Twitter page. This is as of January the 4th of this year, New York Times. When giant corporations like Google have too much power, it's bad for innovation, bad for consumers and bad for their workers. So if the tech CEOs think that by virtue of the fact that there is a one-party rule that they are no longer in the scope of the politicians in Washington DC, they're sadly mistaken. So to the question of, do I believe that this is going to be a negative or positive for Twitter shares, I think that Twitter is going to go the way of my space. I think that this stock is going to get clubbed over the head. This was a self-inflicted assassination. Their shareholders will file suit because this is corporate malpractice. These shares are going not just lower. They're going a lot lower. So to me, the trade is not if I short Twitter. It's when do I get the opportunity, perhaps on a counter-trend rally, off of a sell-off, we get a lower high on the shares that I open up the short position. I'm not sure yet. Monday's still a ways off and I will be analyzing further and I will be talking to members about when we decide to get short of Twitter and I will be sending out an alert. Folks, please smash that like button, subscribe to the channel, share this video with a friend and leave a comment below. I will get back to you. Join us each Sunday night and Thursday night for our live streams. You can enter your email address below using the link that says 15-minute alert and alert will go out 15 minutes to a half hour prior to it was going live. So you never miss a second. You can also click the bell button on YouTube but you'll get notified after we go live. Everyone have a very profitable trading week. Be well.