This stock is literally Rocket Fuel

Description: Rocket Fuel, uses artificial intelligence to help businesses make the best programmatic ad buys on the Internet. “In other words, if you’re an advertiser, its software gives you the biggest bang for your buck,” said Cramer.

Source: cnbc.com

Date: Nov 15, 2013

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Pros will often talk about rockets to describe white hot stocks. But no stock deserves the moniker more than this one.

We’re talking about Rocket Fuel, a company that lived up to its name when it came public back in September.

“It priced at $29, then opened up immediately at $59.95, before closing out its first day at $56.10, a 93% gain,” Cramer explained.

However, this spaceship quickly came back to earth. “Hideous declines followed. The stock dropped to a low of $37 and change last week,” Cramer added.

It appears investors didn’t know what to make of the company, which – incidentally – has absolutely nothing to do with space flight.  READ REST OF STORY 

Questions for discussion:

1.  What is Rocket Fuel and what is their competitive advantage?

2.  Would you invest in this company at this time?  Why or Why not?

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58 thoughts on “This stock is literally Rocket Fuel

  1. Ruzaan du Plooy

    1. What is Rocket Fuel and what is their competitive advantage?

    Rocket Fuel is a company that provides a service utilizing artificial intelligence in order to provide top quality marketing capabilities. Upon hiring this company, they will aid you in finding the appropriate ads and places for your specific company. This is a very useful tool, however seeing as this is a newer company I am unsure of its competitive advantage, as it most certainly is not its reputation. But I suppose it would be their service that sets them apart as well as their use of artificial intelligence, however they will face many competitors which they will hopefully be able to withstand.

    2. Would you invest in this company at this time? Why or Why not?

    Due to the fact that this is a newer company, I would not invest right away. Rocket Fuel is not something I am passionate about, and therefore I am not willing to take any chances. This company will have to prove itself, withstand its competitors within its market, while still thriving to new heights. As an investor, I would also be really hesitant to invest due to their very unstable stock history. At first there was a massive gain of 93%, but then quickly plummeted quite low and continued to rise again. The fluctuation within the stocks for this company is not very reassuring and I would not invest until stocks became more level over time as well as the company had some time to mature and grow.

    Reply
  2. Courtney Williamson

    Rocket Fuel is a program that helps companies determine what ad spots to buy and when to buy them by using Artificial Intelligence robots. It uses Real Time buying to buy ad space. Rocket Fuel has a competitive advantage of predicting what the best places are to place an ad by using Artificial Intelligence and Big Data. A quarter of the company’s revenue was made up from social, mobile, and video business.
    I am not an investor, so it should go without saying, but I would not invest in the Rocket Fuel company because the fluctuating stock prices it has been experiencing. Even though it experienced a 93% gain from the opening price of $29 before closing out its first day, it dropped down to $37 later, and then jumped back up to $57. These varying prices do not sit well with me, and would leave me hesitant to invest. It is stated that “the risk may be worth the reward”, but I would not be confident in my knowledge and understanding of stock markets to be willing to make an investment.

    Reply
  3. Shannon Storey

    Rocket Fuel is a company that uses artificial intelligence in order to provide a service which helps companies to choose the right advertising. It is digital advertising. This system helps to match companies up with the appropriate ad space so that the advertising is pertinent.
    This company is still very new and as such does not have a track record. If you look at the stock price it is up and own quite quickly and is not stable yet. As such I would not be the first in line to purchase stock. That being said, once the company is a little more established, I would consider. The concept is fairly new. It may be difficult to maintain the ability to match quickly and efficiently as people’s tastes and preferences change, depending on the product, on a daily basis. This company also is competing with many established companies such as google and it may prove to be too much for this company.
    That being said this company is claiming a profit and it may just be worth it to watch it and see where it goes. Provided you can enter their market and purchase shares at a relatively low price to start with, it may be worth hanging on until it hits big and the stock rises.

    Reply
  4. Scott Slomp

    1. What is Rocket Fuel and what is their competitive advantage?
    Rocket Fuel is a software company that uses artificial intelligence to give companies who use advertising the best bang for their buck. If a company were to use Rocket Fuel, they can be assured that their advertisement will be at specific spots where it will be looked at by consumers over and over again. Their competitive advantage is that they use artificial intelligence so that their software is quick and a the top of the line in the world. With being at the top, this looks very good to potential customers who have maybe had trouble in the past and need that extra push to get their product out in the market.

    2. Would you invest in this company at this time? Why or Why not?
    I think i would invest in this company, i am not sure if there is any other software company like this right now, and until a competitor emerges, there stocks can only go up unless they make a really big mistake. Rocket Fuel’s gains have done very well but have also dropped drastically. But as in any stocks, that is bound to happen to some extent.

    Reply
  5. Travis Cote

    Rocket Fuel is a company that uses artificial intelligence to give companies the best advertisements out there. if a company Hires Rocket Fuel then rocket fuel will find the right place and right ads to use for that specific company. This unique way of doing things gives the customer the opportunity to spend more time and resources on other parts and goals of the company itself.

    I would invest in this company for sure, at some point in the future where i would be stable enough financially to do so. I think that a company like this would probably be a good idea for certain businesses and it will probably expand in the future, this will give people the option to spend more time doing what they’re business offers and not spend as much time them selves on getting it known to the public, someone else who has experience and connections in that field can do that.

    Reply
  6. Nic Hutchison

    Rocket Fuel is a company that uses artificial technology for the placement of ads for an Advertising Company. It uses programmatic ad buys with difficult algorithm equations to let the user of the Software to know where the best place and the best time to put their ad up. It takes into their calculation with demographics, big data, and other variables to find a best suited ad destination. “In other words, if you’re an advertiser, its software gives you the biggest bang for your buck,” said Cramer. Their competitive advantage over other companies is the use of there Artifical Inteligence to accurately and quickly calculate these equations. These robots do not make mistakes as humans would make.

    To invest in this company would be a gamble. Especially not knowing too much about this Company currently would affect my investment decision. With such a volatile stock right now, I think it would be unwise to invest at this moment. Also with the chances of new competitors coming into the market, I believe Rock Fuel will have hard times battling to keep its competitive advantage over these new companies.

    Reply
  7. Heather Mack

    1. What is Rocket Fuel and what is their competitive advantage?
    Rocket Fuel is a software company that uses artificial intelligence with their programmatic media-buying platform to help businesses get the “biggest bang for their buck” when buying ads on the internet. It ensures that advertisers make the best programmatic ad buys while purchasing ad space on the internet. Rocket Fuel operates globally, providing their services to customers in North America, Europe, and Japan, and works on marketing programs in industries ranging from luxury cars to retail. Their competitive advantage is their use of Artificial Intelligence. This artificial intelligence helps Rocket Fuel provide their customers with improved marketing ROI within the digital media, web, mobile, video and social channels. This ROI makes them very attractive to potential customers, as this new artificial intelligence technology gives them an edge/competitive advantage over their competitors.

    2. Would you invest in this company at this time? Why or Why not?
    Given the success, and the overall rise in stock prices of this company, I would feel confident in investing in this company at this time, based on statistics alone (if I wasn’t in the financial situation of most students, of course). However, I do not know much about artificial intelligence, or whether this artificial intelligence is a sustainable competitive advantage. How likely is it that another ad consulting company would be able to introduce artificial intelligence into their own media-buying platforms and lessen Rocket Fuel’s competitive advantage? If Artificial Intelligence is a sustainable competitive advantage, then I would feel confident in investing money to Rocket Fuel. However, if it is not sustainable, I image this new way of ad-buying will become the new way for marketing, and though Rocket Fuel will likely continue to do well, they will not necessarily dominate the market.

    Reply

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