4 ms·

One is a 12-month price target for the stock, the other is a takeover price (based on the long term) where GS is acting on behalf of the company and its existin

One is a 12-month price target for the stock, the other is a takeover price (based on the long term) where GS is acting on behalf of the company and its existing shareholders. This is really not "gotcha" like ZH try to pretend it is.

m101 4y ago
A short term price target should incorporate long term cashflow expectations
Dylan16807 4y ago
> One is a 12-month price target for the stock, the other is a takeover price (based on the long term) If you expect a certain price in the future, then you should want to buy/sell toward a similar price (minus interest) in the present, shouldn't you? > where GS is acting on behalf of the company and its existing shareholders. That explains wanting some premium. It doesn't explain the difference between 30 and >54.
- fgonzag 4y ago
  You want to buy 100% of the stock (think about what that does to the volume of buy orders). That obviously has a much higher price than the normal market dynamics. Both things can be accurate, the price sticking at $30 on normal trading, and a full takeover requiring a significant premium.
  - jtc331 4y ago
    By any normal measure I’d consider $54 a very significant premium to $30.
  - jansen555 4y ago
- Retric 4y ago
  The most obvious reasons is it’s different people doing the analysis so they should come to different conclusions.
  - pseudo0 4y ago
    Not that Twitter paid GS for the latter opinion, and obviously wants a higher estimated valuation to strengthen their bargaining position? Getting paid by an entity to appraise an asset they own comes with obvious moral hazard.
  - Dylan16807 4y ago
    > The most obvious reasons is it’s different people doing the analysis so they should come to different conclusions. Well, that's the obvious reason it wasn't a typo. But they're trying to measure roughly the same number. It's the opposite of obvious that two competent groups would have such wildly different results.
bitshiftfaced 4y ago
Wouldn't the 12 month price target also be based on the long term? Whether it's today or a year from now, it should tend toward the present value (at that time) of all of its future cash flows.
- JumpCrisscross 4y ago
  > Wouldn't the 12 month price target also be based on the long term? No. There is a control/takeover/acquisition premium [1]. Owning a whole company is more valuable than owning part of one since you can control it without consideration for minority interests. [1] https://www.investopedia.com/terms/a/acquisitionpremium.asp https://www.investopedia.com/terms/a/acquisitionpremium.asp
  - version_five 4y ago
    That explains why Musk may want to pay more. It doesn't relate to the options of the current shareholders.
    - deleted 4y ago
      [deleted]
  - bitshiftfaced 4y ago
    That doesn't actually contradict the claim that the 12 month price target is still based on expected long term returns.
    - deleted 4y ago
      [deleted]
Meai 4y ago
According to the picture in the tweet they actually have a sell "rating", meaning that they expect the stock to very possibly go down until it hits 30$ and therefore they recommend selling as a primary strategy to deal with current twitter stock. So the tweet in my opinion is correct to call this awkward.

m101 4y ago

A short term price target should incorporate long term cashflow expectations

Dylan16807 4y ago

> One is a 12-month price target for the stock, the other is a takeover price (based on the long term) If you expect a certain price in the future, then you should want to buy/sell toward a similar price (minus interest) in the present, shouldn't you? > where GS is acting on behalf of the company and its existing shareholders. That explains wanting some premium. It doesn't explain the difference between 30 and >54.

fgonzag 4y ago
You want to buy 100% of the stock (think about what that does to the volume of buy orders). That obviously has a much higher price than the normal market dynamics. Both things can be accurate, the price sticking at $30 on normal trading, and a full takeover requiring a significant premium.
- jtc331 4y ago
  By any normal measure I’d consider $54 a very significant premium to $30.
- jansen555 4y ago
Retric 4y ago
The most obvious reasons is it’s different people doing the analysis so they should come to different conclusions.
- pseudo0 4y ago
  Not that Twitter paid GS for the latter opinion, and obviously wants a higher estimated valuation to strengthen their bargaining position? Getting paid by an entity to appraise an asset they own comes with obvious moral hazard.
- Dylan16807 4y ago
  > The most obvious reasons is it’s different people doing the analysis so they should come to different conclusions. Well, that's the obvious reason it wasn't a typo. But they're trying to measure roughly the same number. It's the opposite of obvious that two competent groups would have such wildly different results.

bitshiftfaced 4y ago

Wouldn't the 12 month price target also be based on the long term? Whether it's today or a year from now, it should tend toward the present value (at that time) of all of its future cash flows.

JumpCrisscross 4y ago
> Wouldn't the 12 month price target also be based on the long term? No. There is a control/takeover/acquisition premium [1]. Owning a whole company is more valuable than owning part of one since you can control it without consideration for minority interests. [1] https://www.investopedia.com/terms/a/acquisitionpremium.asp https://www.investopedia.com/terms/a/acquisitionpremium.asp
- version_five 4y ago
  That explains why Musk may want to pay more. It doesn't relate to the options of the current shareholders.
  - deleted 4y ago
    [deleted]
- bitshiftfaced 4y ago
  That doesn't actually contradict the claim that the 12 month price target is still based on expected long term returns.
  - deleted 4y ago
    [deleted]

Meai 4y ago

According to the picture in the tweet they actually have a sell "rating", meaning that they expect the stock to very possibly go down until it hits 30$ and therefore they recommend selling as a primary strategy to deal with current twitter stock. So the tweet in my opinion is correct to call this awkward.