Twitter's (TWTR) business model is imploding before our very eyes today on Elon Musk's "Red Wedding" day, with massive layoffs, advertisers scrambling and Musk posting the following tweet:
Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.
This is the perfect time for someone to have invaded my consciousness with a come-on to invest in Twitter. Not! But, that is exactly what happened yesterday. I became aware of an app called Titan, which is hawking to retail investors shares in Cathie Wood's ARK Venture Fund (XARKX) , which counts a private stake in Twitter among its largest holdings.
Cathie Wood. Attempting to take advantage of retail investors' gullibility - though none could possibly match hers - and Twitter. Three of my favorite themes all wrapped up in one!
Titan is absolute, unadulterated garbage, and I cannot wait until this article is posted and I can delete the app. The ARK Venture fund that you can buy via Titan is:
- Improperly invested: According to Titan's website, 29.31% of the ARK Venture fund is currently in cash (which makes no sense for a venture fund) and the Twitter stake only accounts for 11.98% of the fund's total value
- Has extraordinarily high fees. According to Titan's website: The ARK Venture Fund has a total expense ratio of 4.22%. This total expense ratio includes a 2.75% management fee, 0.65% in distribution fees, and an additional 0.82% in other operating fees. In contrast, my firm, Excelsior Capital Partners, charges a flat fee of 50 basis points (0.50%) of assets under management.
- Owns a significant chunk in publicly-traded securities (the antithesis of actual venture investing) which, not surprisingly, are the same horribly-performing "hopium" names that populate ARK Innovation ETF (ARKK) .
I did not appoint myself The Sheriff of Wall Street - that was New York State's disgraced former governor Eliot Spitzer - but, dammit, I care about you guys, the Real Money readership. I am just not going to let these people take advantage of you.
They sell you their snake oil-laced schemes and then try to convince you that you are a bad person for holding Exxon Mobil (XOM) - which hit yet another all-time high this morning before pulling back with the rest of the market - because the planet is melting, or something like that. I created my HOAX hydrocarbon stock-powered portfolio last December and benchmarked it against Cathie Wood's leaky ARKK.
As of today - these are the the figures before reinvestment trades, which are only available to my newsletter subscribers at www.excelsiorcapitalpartners.com... obviously HOAX's real returns are higher - these are the performance figures since HOAX's inception on 12.23.21
ARKK - 62.71%.
Feels good. But, really, who wouldn't want to invest with Cathie after such awful performance from her flagship fund? Anyone with a brain, that's who. But bull markets always produce con-artists and grifters, and remember that we are exactly 365 days from the Nasdaq first hitting 16,000. It's below 10,400 as of this writing.
These sad individuals will continue to try to get you to invest in their horrible ideas. I have no doubt that Elon Musk sincerely wants to make Twitter a more positive force for society and a true digital town square. If he does that by alienating key advertisers, though, Twitter's business model is simply not feasible. Consequently, there is no way the company will possibly be able to service the debt it now holds as a private company, under the X Holdings banner.
Don't buy come-ons from organizations like Titan... At the end of the day, we investors are all just voting with our wallets. And, since my Real Money publishing days are Thursday and Friday, I should also remind you to vote your conscience next Tuesday as well. As Ms. Guru left our apartment at 4:30 am this morning (that was the plan, anyway; I was fast asleep) to go help the NYC Board of Elections by explaining the confusing NY State election system to early-voters who speak her native tongue, I was dreaming about how I could similarly help regular investors.
And I woke up to this: just keep people from being scammed. That's all I can do. Stay away from Titan, avoid Cathie Wood like the plague, and keep reading Real Money for brilliant investment ideas. And...Vote!