Twitter Inc (NYSE:TWTR) investors are having a better time of it today as the market rebounds from the pressures of Wednesday. At time of writing shares in the social networking company had risen by more than 6%. The reasons behind the surge in value appear to be the recognition of value at a price of $30 per share and a general degree of optimism around the market on Thursday.
Shares in the social network suffered grievously this week at the hands of a nervous market where investor few from highly valued growth stocks. The company’s shares dropped about a quarter of their value in the five days trading through Wednesday evening. Given the pessimism about the company’s future, there’s some wonder about the rise on today’s market. On analyst report may hold the key.
The Electron Global Fund was up 2% for September, bringing its third-quarter return to -1.7% and its year-to-date return to 8.5%. Meanwhile, the MSCI World Utilities Index was down 7.2% for September, 1.7% for the third quarter and 3.3% year to date. The S&P 500 was down 4.8% for September, up 0.2% for the third Read More
Morgan Stanley sees some good in Twitter
Morgan Stanley was not afraid to stand beside Twitter Inc (NYSE:TWTR) stock today, even after the drubbing the company’s value took over the last week. The firm says that it no longer sees any downside to its estimate of the company’s performance over the next twelve months. the analysts remain concerned about the future of growth in the firm’s user base, but manage to justify an Equal Weight rating.
According to the report, the analysts, who were led by Jordan Monaghan, “see TWTR as likely to meet investor financial expectations over the next few quarters.”
The real clincher for the analysts is the massive loss in value the company has suffered so far this year. Every company is worth owning at some price, and Twitter Inc (NYSE:TWTR) may be an aright bet at yesterday’s value, though headwinds are likely to continue for some weeks.
Collapse in Twitter value may be unwarranted
The expiration of an IPO share lock up on Tuesday was blamed for mush of the slide, but that explanation didn’t make all that much sense. The only reason needed to explain the slide is the company’s massive valuation and the nervousness of the equities markets this year, and in the last few days in particular. Twitter has lost about half its value since the beginning of the year, and a good portion of that collapse came inside the last week.
The incredible collapse in the company’s value in the last few weeks appears to be regretted by this morning’s market. Traders on Thursday don’t seem willing to give the shares the rope to reach toward its highs again, but they are supporting a significantly higher price than the stock closed at on Wednesday. There is some feeling that the compression of the last week went too far.
Without any meaningful change in information about Twitter Inc (NYSE:TWTR) business, there’s no telling where the company’s stock price will go in the coming weeks. Growth stock trade with volatility. They react unpredictably to insignificant, and sometimes unrelated, information, and they defy forecasts.
Twitter oracles may be out there by the dozen on Thursday, but the company’s future is not so easily tamed by speculative mathematics. Shareholders in Twitter are taking a long-term gamble or a short-term coin flip. It’s no wonder the firm’s future remains so murky.