Twitter (TWTR) Overvalued, Analyst Warns in Tweet-Length Note
Twitter's value has nearly tripled since Nov. 7 offering.
Dec. 27, 2013 — -- Twitter stock (NYSE: TWTR) 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.
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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.
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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.