Hot money, net neutrality, and pot stock valuations
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There’s no doubt that a lot of hot money continues to slosh around these markets, even as the momentum trade has faded in the last few weeks.
Stocks like Netflix continues to get pounded on no news, though I suppose the headlines about how Apple’s trying to bribe Comcast to treat Apple’s TV services as unfettered, is contributing to Netflix’s downswing here. Clearly, if Netflix is going to have to spend billions trying to get the last mile Internet providers to keep from throttling Netflix’s TV services, it’s going to hurt long-term earnings for the company. Not only that, but Netflix certainly doesn’t have the capital that an Apple, Microsoft and Google have to pay for such a scam.
Why do I call pay-for content streams a scam and write “for Internet content providers is bad for freedom, for the economy, and for you”?
The last mile is regulated as a protected monopoly, both telcos like Verizon and AT&T and cablecos like Comcast and Time Warner, and therefore, they have NO right to profit off that mandated control. If they want to run their companies completely open to competition and unfettered access to their last mile pipes, that’s one thing. As it stands now, the cablecos and telcos want to have their cake and eat it too, and I call that the Death of Net Neutrality.
My old pal, RobertMarcin, a wise social commentator and even better investor disagrees with me, writing that you “Get what you pay for.” What do you think? Leave a comment below or come join the discussion at Scutify.
Meanwhile, speaking of hot money, the buzz around the Candy Crush maker IPO was too much for the market to handle, especially as the aforementioned momentum trade has faded into this offering. That said, I LOVE seeing KING, another app company go public, for BILLIONS of $! Scutify.com’s comps continue to lift our valuation higher. And that said, I wouldn’t touch $KING on its IPO with a 10 foot pole.
Hot money continues to try to hype up the crappy fuel cell and marijuana penny stocks too. I keep getting attacked and/or questioned for bashing highflying, hyped-up penny and OTC stocks for being doomed and wildly overvalued. Just today, someone today told me that Growlife PHOT is headed to $1. That would make Growlife worth more than $2 billion. Let’s put that into perspective using one of my personal favorite plays into the legalized marijuana revolution, Lindsay.
$LNN is just over $1 billion right now, paying a steady 1.3% dividend and growing steadily too, even without the benefits that it will see from increased demand for its water pipes and services in the out years as the legalized marijuana trend continues. Growlife, at its current quote is already worth more than Lindsay, and would need to grow its revenues 70x to equal Lindsay’s existing revenues from this year. Put another way, I’ve received more in dividends from Lindsay over the last year than the total amount of sales that Growlife was able to generate last year.All that will spell big losses for $PHOT‘s shareholders as that reality plays out.
Please don’t bother asking me about any other of these hyped up OTC penny stocks from the current favorite “industries” for the scammers, including eCigs, weed, fuel-cells, or whatever. Just stick with real stocks and real companies. But please do let me know what you think about net neutrality and the ramifications of its death in a comment below or at Scutify.
