Twitter Inc (NYSE:TWTR) may have been the talk of Wall Street when investors blew its share price up at its initial public offering, but investors are generally starting to join with analysts in adopting more bearish views, according to an investor poll conducted by Bloomberg.
Investors think Twitter will fall for six months
Here is the question Bloomberg posed to investors:
At this year's Sohn Investment Conference, Dan Sundheim, the founder and CIO of D1 Capital Partners, spoke with John Collison, the co-founder of Stripe. Q1 2021 hedge fund letters, conferences and more D1 manages $20 billion. Of this, $10 billion is invested in fast-growing private businesses such as Stripe. Stripe is currently valued at around Read More
“Twitter priced its IPO at $26 per share and the stock closed at $44.90 the first day. Six months from now, what do you expect to be its stock price?”
The provided answers were: “Less than $44.90 per share;” “close to $44.90 per share;” “more than $44.90 per share;” or “have no idea.”
Sixty-eight percent of investors who responded to the poll believed that Twitter Inc (NYSE:TWTR)’s shares would be lower than $44.90 each six months from now. Only 8% felt like they would be close to that price, while only 12% felt like they would be higher than it. And 12% had no idea what Twitter shares would be worth.
Twitter shares have been burning up the charts
Shares of Twitter skyrocketed 73% on the day the company debuted on the New York Stock Exchange. The company went public at $26 per share on Nov. 7, and currently it is still trading at a level which makes it more expensive than peers. Investors have keep the micro-blogging site’s valuation high amidst promises of rapid growth. However, Twitter Inc (NYSE:TWTR) continues to lose money as it rolls out new products and expands into international markets.
Shares of Twitter fell more than 2% in trading on Friday but remains up 59% since its IPO. Thursday’s closing price put a value of 21 times the company’s estimated 2014 sales, making it more expensive than Facebook Inc (NASDAQ:FB), which is profitable and has five times the number of users Twitter has. Facebook trades at just 11 times its sales projection.