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Twitter's valuation isn't based on users - the stock is down ~35% this year despite user growth being 22% and revenue more than doubling. The stock is being tr
by nikcub 12y ago
Twitter's valuation isn't based on users - the stock is down ~35% this year despite user growth being 22% and revenue more than doubling.
The stock is being trashed because they missed earnings.
The S&P report itself said Twitter is experiencing very strong growth and little competitive pressure. It was downgraded because Twitter are investing their cash rather than hoarding it. Bond holders want companies to hold cash. What is good for bond holders is usually different to what is good for stock holders.
The long case on Twitter is that the fundamentals are good, the company is growing like crazy and that the market is undervaluing based on earnings which mostly missed because of one-off employee option and other writedowns as well as reinvestment.
- jacquesm 12y agoIt's really funny that within 12 months of an IPO a company can be scolded for investing their cash rather than hoarding it. Hilarious, really.
- jon-wood 12y ago> The long case on Twitter is that the fundamentals are good. I'm not sure I agree with that statement. They've got a lot of users, many of which love the service, but as a business the fundamentals are far from sound. I'm yet to be convinced that paid advertising is a model that will work on Twitter, and I can't really see any other model beyond persuading people to pay to hide the adverts (which destroys their advertiser base). Twitter started as a hobby side project to communicate between a few friends, not a business, and you can see that in everything they do.