DRJ's Blog

July 24, 2014

As we posted to OptionMONSTER last evening prior to earnings and as I said on CNBC's Fast Money with Melissa Lee, we noted large out-the-money purchases in Facebook as a reason we should be long into its quarterly report. Today I note FB trades through $78 and our long stock, calls and short puts will make this a FANTASTIC day! 

Here are the specifics of FB's fabulous quarterly results: 

Facebook EPS were blowout by nearly every metric. 

  • Reported profit of $0.42 vs $0.33

  • Revenue $2.91 billion vs $2.80 billion 

  • Monthly active users (MAUs) 1.32 billion, +14% year/year

  • Daily active users (DAUs) 829 million, +19% year/year 

  • Mobile MAUs 1.07 billion, +31% year/year

  • Payments and fees rev $234M vs $237M qtr/qtr

  • Advertising rev $2.68B, +67% year/year

  • Mobile advertising rev 62% of ad rev v 41% year/year 

I am long stock and calls and short puts in $FB as our HeatSeeker picked up unusual call activity at the September 80 call strike. The buyer has the upside, then nearly $10 above where Facebook was trading, until the 3rd Friday in September. 

That's not just a quick pop for EPS folks, that's a longer-term bullish bet.

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