Tags: Twitter | share | price | IPO

Money Manager: Twitter 'Absolutely Beyond Ridiculous'

Monday, 30 Dec 2013 11:37 AM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Twitter shares stand 131 percent above their Nov. 6 initial public offering (IPO) level, even though there has been no major market-moving news about the company since then.

The move has led many experts to cry bubble. While Twitter's revenue is growing at a triple-digit percentage pace, it has no profits.

"I just haven't seen something like this in a long time," stock analyst Robert Peck of SunTrust Robinson Humphrey tells The New York Times.

Editor’s Note:
Obama’s Budget Takes Aim at Retired Americans

He established a price target of $50 for Twitter shares before its IPO, which carried a price of $26 per share. He lowered his rating to hold two weeks ago when the stock hit $59. It traded at $60.60 Monday morning, falling another 5 percent after Friday's 13 percent plunge.

"They don't have earnings. They don't have free cash flow," Peck notes.

Twitter's market value equals one-third that of its more established rival Facebook, even as Facebook has five times more users and 10 times more revenue, The Time reports.

"You're starting to hear it: 'it's a new world order.' Apparently the sun is going to rise in the west because of Twitter," Timothy Connolly, a New York City money manager, tells the paper. "It's absolutely beyond ridiculous."

Analyst Scott Kessler of S&P Capital IQ expresses skepticism about Twitter too.

"At the end of the day, we have thought and we continue to think the valuation is just initially stretched," he tells CNBC. "It's excessive. It appears now that we've approached some kind of mania. When that happens, you just kind of have to wait and see what happens."

Editor’s Note: Obama’s Budget Takes Aim at Retired Americans

Related Stories:

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink

 
Email:
Retype Email:
Country
Zip Code:
 
Follow Newsmax
Facebook
Google Plus
You May Also Like

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved