Big Companies don't fail because they don't have execution skills or management depth to execute the change. They fail because they refuse to change with times. That's why when these companies accept the market reality and change, the market rewards them like crazy. I have seen this trend in US market over and over again so many times that I have started calling this pattern: "Little Things Big Impact".
Let me share one example today just to illustrate this point:
Facebook IPO: Facebook had a disastrous start as a public company. Facebook came with its IPO on May 18, 2012, at a listing price of $38. By August 2012, the stock was down to $19. Why? Because it appeared to the market that company is not making serious efforts on mobile platform. Simple. Also, everybody used to call Facebook a Bubble stock in 2012
Facebook is a bubble and it will burst - Really..The basic definition of bubble is that no one calls it a bubble. That's when it is bubble
— Deepak Singh (@smarket) May 21, 2012
Then, Facebook comes out with earnings report in July 2013...Look at the news flow (Mobile Focus)
It was an exciting news at that time-
Turnaround: Facebook stock jumped 30% yesterday. Market excited with company's mobile strategy. Mobile ads were 41% of total ad revenue
— Deepak Singh (@smarket) July 26, 2013
The stock rallied like crazy to $40 and see what happened after that....4x move in following 4 years
There is a very simple lesson: Even if you board the bus after a massive move, you can still ride a big move. Hence, Never Ignore "Little Things Big Impact". I know I tweet a lot sometimes but the idea is to make a point. It's good I can use this tweet now to tell a story. I look forward to your feedback 🙂
A simple pattern that resulted in Tinplate stock making this move today
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers