Stocks

Evercore Cuts Twitter Inc To Hold Citing Facebook Inc Rivalry

Shares in Twitter are trading up $0.27 at the time of writing at $37.26. The 0.7% increase is due to a mixture of good and bad factors.

The company’s Chief Financial Officer Anthony Noto spoke at Twitter’s annual shareholder meeting yesterday, reiterating his commitment to the company, writes Tiernan Ray for Barron’s.

Twitter DM

Noto and Saca provide positives for Twitter

Noto said that since taking up the position, “each of those 11 months, the conviction that I have about the opportunity that sits in front of us to build value for your shareholders, has only increased, and my enthusiasm of being part of this team on this journey has only increased.”

As well as this positive news from Noto, highly-regarded venture observer Chris Sacca of Lowercase Capital released a poitive note on Twitter. He made some suggestions for the company and then made the positive conclusion that: “Done right, countless users new and old will find Twitter indispensable, use Twitter more, see great ads, buy lots of stuff, and make the company much more money along the way.”

His note was commented on throughout the financial media, and Jim Cramer of CNBC praised Sacca for his insight on Twitter.

Evercore cuts from Twitter ratings from Buy to Hold

Despite this good news for the company, Ken Sena of Evercore ISI decided to cut his rating to Hold from Buy. Sena believes that Twitter is currently on course for a “competitive convergence” with Facebook, and it will not come out a winner.

“What we conclude is that Facebook has developed perhaps the richest mobile news reading experience today, and all of the data we examine in this report, including propriety referral traffic analysis and broader examinations of scale, points to an expanding lead,” Sena said.

According to Sena, Twitter has not proved its ability to successfully monetize its “influence,” and Facebook appears to be putting together a stronger platform.

Sena rates Facebook shares as a Buy, and believes that the company’s ad revenues will be boosted by the release of the “Instant Articles” feature which it released on May 12. The feature allows users to read the news within Facebook, and offers real benefits to publishers who stand to profit from Facebook’s advantages of scale and design.

The analyst also claims that Facebook now rivals Google in terms of the perceptions of advertisers. Data “shows Facebook as responsible for nearly a third of publisher traffic, placing it effectively on par with Google,” writes Sena.