Twitter Inc (NYSE:TWTR) has truly been a spectacle over the last couple of days. Trading volume of the company’s shares exploded the day after Christmas, climbing to 82 million from the previous average daily volume of around 15 million. Investors excitedly drove the price up while analysts watched in shock and horror. Then Friday came—and so did the cautionary analyst notes.

Twitter

Twitter sheds $4 billion in market cap

Shares of Twitter Inc (NYSE:TWTR) fell 13% on Friday nearly erasing the entire week’s gains and dropping more than $5 billion off the company’s market capitalization in just a single trading day. The Wall Street Journal puts Twitter’s market cap into perspective, noting that the company’s valuation of nearly $40 billion at the end of Thursday trading was more than Target Corporation (NYSE:TGT)’s $39.5 billion market cap and Time Warner Cable Inc (NYSE:TWC)’s $37.6 billion market cap.

Trading volume was also high on Friday, surpassing 60 million, but this time it was due to negative interest rather than the positive interest that drove shares on Thursday. And in spite of Friday’s drop, shares of Twitter have still risen more than 150% from the company’s initial public offering price of $26.

Analysts warn investors about Twitter

Research notes from analysts at several firms probably had something to do with Friday’s sell-off of Twitter Inc (NYSE:TWTR) shares. Wunderlich Securities analyst Blake Harper said the company’s stock had “graduated to cult status.” Others, including Macquarie analyst Ben Shachter and SunTrust analyst Robert Peck, warned that nothing had happened in the last few weeks to warrant the run-up in price of Twitter shares. Schacter actually downgraded Twitter to Underperform in his note.

An experiment using Twitter’s services

Forbes contributor Joshua Rogers concluded on Friday that Twitter’s advertising platform doesn’t really work all that well. He did an experiment in an attempt to drive more traffic to his Forbes posts using Twitter, and he said that really didn’t work so well. He noted a .25% click-through rate on his feed with about 1,200 followers. He thinks that as time goes on, advertisers will see a very low return on investment.

It should be noted, however, that his experiment is just for one account. Twitter Inc (NYSE:TWTR) is facing the same disadvantage now that Facebook Inc (NASDAQ:FB) did in the past. Only now are advertisers starting to see returns on their investment as the social network hones its offerings and analytics tools. I’m not saying Twitter advertisers will see the same returns on their investments as Facebook advertisers. I’m simply saying that it’s too early to tell. And also running an experiment on just one account doesn’t necessarily provide enough evidence to suggest that Twitter’s platform doesn’t work at all.