Some thoughts on Tech and a quick turn on Snap

Let’s start with Snap. When I bought the market cap was around 19.4bn dollars. A few days later this had risen to 25 bn after some promising user data was announced. The business is unprofitable and will remain so for a time, so I thought it best to take a profit at 18.03. That gave me a very quick return of 28%. I will watch and wait for any sign of testing of new support levels as I may buy back on a correction.

The enormous valuation on Snap got me looking at some other media valuations, and was surprised to see that Roku is valued at “only” 12.57 bn at present.

The tech boom is centred on US markets, because these have the largest concentration of tech stocks on the planet. Compare and contrast with the U.K.- where the decent tech companies like Arm Holdings ( now owned by SoftBank) are no longer investment options. The standard of analysis in the U.K. is also appalling – wise to assume either short pants or not up to the job – they can copy stuff about Amazon, Microsoft, and Alphabet from the companies own website information to investors, or plagiarise US analyst reports.

As readers will know I have a small holding in Bango, where the share price has been all over the place this year. The price has improved recently- giving a market cap of £92.7m (USD 115m). The best way to describe the business is that their audiences double revenues from the 5% of cellphone users who deliver 80% of app developer revenues, and they have contracts with all the major players who provide the apps to download. They were followed by an analyst at Cenkos – the company’s broker – who produced a forecast in March that was clearly wrong – or so thought Investors Chronicle ( U.K. Barron’s equivalent). But we had to wait until updated figures were available in July for action – Cenkos were sacked and later withdrew their forecast, and a new broker appointed .My problem with this is that if an institution was given a new mandate to manage – including a Bango holding – between March and July – they would have relied on Cenkos research and institutional salespeople to decide whether to retain or sell, thus creating a false market in the shares.

Although it will not make huge profits anytime soon, Bango has also moved into profitability this year, and the business seems to be growing at a fast pace. As it is a small holding and a small market cap I will let it run.

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