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Twitter IPO interesting at right price

Thursday, 12 Sep 2013 | 5:33 PM ET
At certain value, Twitter IPO 'not that interesting'
Shares of Twitter, which filed for an initial public offering, could be interesting, but only at the right level, Dan Niles of Alpha One Capital says.

Shares of Twitter, which filed for an initial public offering, could be interesting at the right price, Alpha One Capital Partners Chief Investment Officer Dan Niles said Thursday.

"At a certain value, it's not that interesting," he said. "I mean, Facebook, I don't think I need to remind people what happened there with that IPO.

"But Twitter's in a different space in the sense that when Facebook went public, they had no mobile revenue. Twitter, the estimation this year that I've seen is they did about $250 million in revenues last year, over $500 million this year, but more than half of it is going to be driven by smartphones and tablets."

(Read more: Tech 'winners will continue to run')

On CNBC's "Fast Money," Niles said that Facebook was one of his top holdings because of its mobile business.

What a Twitter IPO means for the tech trade
Twitter files for an IPO and the "Fast Money" traders break down the move. Dan Niles, Alpha One Capital Partners, explains what their submission of an S-1 means for the social media site and the impact it may have on others.

"This is another play into the same theme," he said.

Niles said that revenues were his top concern.

"The No. 1 thing that I'm going to look at – and this really covers Facebook, Google, Amazon, eBay,Yahoo, so it's the same thing I look at for all of them – is what amount of money are they able to generate," he said.

(Read more: Why Wall Street's wrong about Apple: Analyst)

"If you look at Google, their cost per click is down year over year for seven quarters in a row. The move to mobile is killing them because they can get about half as much money on mobile just because you have smaller surface area to put those ads, relative to desktop, whereas with Facebook, they're ramping and they're doing innovative ads on the mobile platform. Their cost per ad is actually going up.

(Read more: Twitter is going public, and its stock ticker symbol is...)

"That's the No. 1 thing I'm going to be looking at with Twitter is how those two things interplay because it's great if you have a lot of volume, but if your pricing is collapsing, that's a real issue."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On Sept. 12, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long GM; Karen Finerman is long DIS; Karen Finerman is long MDY PUTS; Dan Nathan is long NFLX; Dan Nathan is long GE; Dan Nathan is long IBM; Dan Nathan is long TSLA; Dan Nathan is long VIX; Dan Nathan is long CAT; Dan Nathan is long MSFT; Dan Nathan is long FXI; Dan Nathan is long ZNGA; Dan Nathan is long WFM ; Dan Nathan is long XCO; Jon Najarian is long AAPL; Jon Najarian is long FB; Jon Najarian is long MSFT; Jon Najarian is long LULU; Jon Najarian is long GRPN; Jon Najarian is long P; Jon Najarian is long ORLY; Jon Najarian is long SYK; Jon Najarian is long MGM; Jon Najarian is long WYNN; Jon Najarian is long MAR; Jon Najarian is long CERN; Jon Najarian is long COP; Jon Najarian is long FIO; Jon Najarian is long GPS; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long C; Anthony Scaramucci is long GS; Anthony Scaramucci is long FB; Anthony Scaramucci is long DIS; Anthony Scaramucci is long GOOG.

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