Twitter Inc (TWTR) Shares Bounce Back

Twitter Inc (NYSE:TWTR) closed out 2013 after losing the post-Christmas gains its stock received. However, shares are already rebounding. They rose as much as 6% today after a positive report from an analyst who likes Twitter’s positioning in terms of video advertising dollars.

Twitter well-positioned in video ads

Evercore Partners analyst Ken Sena said that the immediacy which is associated with Twitter Inc (NYSE:TWTR)’s micro-blogging platform is what makes the company so well-positioned to capture dollars from video ads. He also noted that Twitter receives a lot of support from the television industry, particularly because of the “second screen” concept in which Twitter users interact with each other while watching a show on television.

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Sena increased his price target for Twitter Inc (NYSE:TWTR) from $52 to $70 a share, which is right around where the stock is trading right now. He maintained his Overweight rating on the company.

Video ad industry starts booming

The video advertising industry is in its relatively early stages, but it’s already booming. eMarketer estimates that spending on video ads reached $4.15 billion in 2013, which would be a 43.5% increase from 2012. This year, the research firm is estimating another 39.5% increase to $5.79 billion for the industry.

Analysts and Facebook Inc (NASDAQ:FB) investors have also been keeping an eye on the video ad industry, as the social network is expected to benefit even more this year with the launch of auto-play video ads. Facebook launched video ads last year. Sena believes that in addition to Twitter, Facebook and Google Inc (NASDAQ:GOOG) will also benefit from the expected increase in spending on video ads.

Others cautious on Twitter

Sena is nearly the only analyst who remains bullish on Twitter Inc (NYSE:TWTR) right now because of the company’s valuation, particularly in light of the run-up in shares the day after Christmas and, in the broader picture, since the micro-blogging company’s initial public offering in November.