Twitter Inc (NYSE:TWTR) stock continued its multi-day dive today, dropping another 5% the second day after the big lockup expiration. Many investors are now considering what they should do with it. Should they buy on the weakness, wait to see what happens next or sell because the company could be going down?
Big tech investor won’t touch Twitter
Morris Mark of Mark Asset Management holds several major technology stocks, including Google Inc (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB) and even Yahoo! Inc. (NASDAQ:YHOO). Speaking to Reuters Newslook (via USA Today), he said he won’t add Twitter Inc (NYSE:TWTR) to his tech holdings. His concerns about Twitter are the same as those of many other major investors.
ARK Invest is known for targeting high-growth technology companies, with one of its most recent additions being DraftKings. In an interview with Maverick's Lee Ainslie at the Robinhood Investors Conference this week, Cathie Wood of ARK Invest discussed the firm's process and updated its views on some positions, including Tesla. Q1 2021 hedge fund letters, Read More
“It’s got a fairly substantial total valuation, when you look at that,” he said. “It hasn’t shown, and maybe it will start to show, the user growth, you know, that would, all things be equal, impress us, and I look at this stuff and use this stuff for what it is. It’s hard to use.”
Twitter bulls focus on the money, not the users
Analysts who rate Twitter Inc (NYSE:TWTR) as a Buy say the micro-blogging company is simply underpricing its ad rates and would be able to increase its revenue by raising the rates. They also believe Twitter is in a good position to take a good chunk of mobile ad revenue and note that the company still has plenty of room for international growth.
Robert Peck of SunTrust Robinson Humphrey has a Hold rating on Twitter Inc (NYSE:TWTR) with a $50 price target, but he actually likes the company. Nonetheless, he still sees the importance of user growth.
“We actually did a report with some third-party analysis and said, a lot of the newest users coming on weren’t active,” he told Reuters. “It’s almost the old 80 / 20 rule, that 80% of the tweets are being created by 20% of the active users. So I think the real question here is, how do you accelerate that 255 million? How do you be more mass market? The euphemism is your mom. Is your mom on Twitter? Probably not. But is your mom on Facebook? Probably, because she wants to see pictures of the kids, the grandkids, etc.”