From: "Ens, Amanda" <I To: "jeffrey E." <[email protected]>, " Subject: Buy FB puts before earnings Date: Thu, 13 Apr 2017 13:23:40 +0000 Attachments: 1Q_Intemet.pdf Inline-Images: image003.jpg We generally view single stock implied vol as underpricing earnings this season. FB in particular screens cheap. Our research's 1Clinternet preview includes sentiment rankings, with FB ranked #1 out of 25 internet stocks with highest positive sentiment, driven by its lowest short interest as % of float, 2nd highest yoy revenue growth expectations, and 21% 'TD stock performance. FB reports May 3rd, and we view 5May2017 puts as priced attractively low, given FB's extremely high positive sentiment/long positioning and high rev expectations going into O1 Ws. The 5May2017 ATM put costs 2.8% vs an avg 6% realized daily move over the past 6 earnings. Additionally, 5May2017 expiration captures the April 18th-19th F8 developer conference, an event that has historically been a catalyst for the stock. Buy FB 5May2017 ATM put for 2.8% premium FB vol screens as cheap across the curve; happy to price longer dates as well. Report link Sentiment Ranking Update We are updating our sentiment ranking index on 25 stocks in our Internet coverage universe (as of 4/4/17). We have aggregated six different indicators we think are relevant to gauge sentiment and have generated an overall "sentiment" score for each company. This sentiment analysis is intended to be informative and should not be used to form an investment opinion; for example our model does not factor in valuation or management quality. Of our company coverage universe, we have excluded four game publisher companies as well as two recent IPO's from this analysis as data may not be comparable. Table 6:1Q16 change in sentiment anking Ticker Rank Pre 40 A Score PSC) A FB 1 43 4 +4 WIX 2 •1 4 +2 TREE 3 •1 8 -1 AAIZN 4 49 8 +4 NFLX 5 •2 9 -1 GOOGL 6 NA 9 +1 PCLN 7 +1 9 +2 C