Topic: How To Invest

What is Pat’s commentary for the week of July 5, 2022

Article Excerpt

Prices of many tech stocks have gone way down this year, especially those that are losing money. Investors may have sold due to worries that money-losers will have trouble raising additional funds to keep growing in a time of uncertainty and rising interest rates. Twilio has dropped as well, but it has strong recovery potential. After all, it’s profitable and has positive cash flow, even though it’s spending a very high 30% of its sales on research. Even if interest rates and/or inflation rise, or if the economy stumbles into a recession, Twilio will have cash to continue to finance its rapid growth, and possibly make strategic acquisitions of related tech firms at distressed prices. Twilio gained from growing demand during the pandemic. However, it may go through further volatility for the reminder of the year, or even longer. But its business model, leading-edge technology and growth to date have set it up for long-term success. That’s why we see the stock…

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