Twitter said in 2010 that it aims one day to have 1 billion users. At the time, he had a $30 target price on the stock and recommended selling after they breached the $45 level in their market debut. He downgraded the stock to “sell” immediately after Twitter’s shares jumped on its opening day.
My quibble is with the stock,” said Brian Wieser, Pivotal Research Group analyst, who was among the first to urge clients to retreat. I only have positive things to say about the company.
#Twitter ticker symbol full#
In his downgrade note on December 16, Wells Fargo analyst Peter Stabler said investors were “underestimating the challenges facing the company”.Ī common theme was that Twitter, though innovative, well-run and full of potential, simply did not warrant such a rich valuation, so soon. Macquarie timed its downgrade to perfection. Wells Fargo and SunTrust Robinson kicked off the first round of downgrades on December 16, followed by Atlantic Equities. Starting mid-December, seven brokerages downgraded the stock within a span of three weeks. Schachter, speaking to Reuters on Thursday, recalls a “runaway momentum.”
There was no let-up for the next two months, as the stock scaled fresh highs with little or no news to justify the valuation. It’s a far cry from the enthusiasm that greeted the company when it debuted on the New York Stock Exchange on November 7 and its shares soared 73 percent over the offering price. “Can they become a mainstream company? That’s the open question,” said Ben Schachter, the Macquarie Securities analyst who downgraded Twitter’s stock to “underperform” on December 27 - the day after it peaked. While no one is suggesting Twitter will lose its consumer cachet as happened to companies such as MySpace or Orkut, neither can anyone guarantee that as tastes change newer rivals won’t usurp it. It’s also raised questions over whether it can sustain growth over the long term.
That in turn has fueled doubts that Twitter could one day attract as many users as Facebook Inc’s 1.2 billion, or match its much larger rival’s power as an advertising vehicle. Year-on-year growth in the number of Twitter users has fallen for five straight quarters, and the company said on Tuesday that its 255 million monthly users, on average, appeared to check the service less frequently than a year ago.
The downgrades, and the subsequent swoon by the stock, reflect concern about slowing growth in Twitter’s user base and the company’s ability to reverse the trend. On Wednesday the stock fell as low as $37.24, 50 percent below its peak of $74.73 the day after Christmas, wiping almost $18 billion off Twitter’s market capitalization. Much more accurate calls were made by Wells Fargo, Atlantic Equities and Macquarie Research, whose analysts advised clients to get out of the high-flying stock about the time it peaked in December. The Twitter symbol is displayed at the post where the stock is traded on the floor of the New York Stock Exchange, November 15, 2013.