Twitter Overvalued, Analyst Warns in Tweet-Length Note
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iStock/Thinkstock(NEW YORK) — Twitter stock has almost tripled since its initial public offering on Nov. 7, but at least one analyst warned in a tweet-like note that it is over priced.
Shares rose nearly 76 percent this month, though the price fell on Friday morning by more than 5 percent to around $69.38. Shares of Twitter closed on Thursday at $73.31. Though the company has not yet turned a profit, its market capitalization makes it worth $38.68 billion.
But Ben Schachter, an analyst for Macquarie, downgraded Twitter, saying that “nothing has fundamentally changed” since he gave it a “neutral” rating on Dec. 11.
His tweet-length research note, re-published by Business Insider, said: “We expect this to be among the shortest downgrade note you’ve ever read, as nothing fundamentally has changed since our Neutral initiation on Dec. 11, except that shares have risen 40%.”
Schacter said shares of Twitter are worth $46.
“We continue to believe that Twitter as a company has a bright future and many opportunities ahead,” he said. “However, as a stock, we believe nothing has changed over the last 15 days to justify the rise in valuation.”
Schachter and Macquarie did not respond to a request for comment.
Santosh Rao, senior analyst and head of research for Greencrest Capital, has warned that the first weeks after any IPO can include unpredictable share prices.
Twitter had sales of $254 million in the six months that ended June 30, up from its $122 million in the first half of 2012. But the social messaging service’s net loss widened to $69 million in the first half of this year, from a net loss of $48 million in the same period a year earlier.
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