By Long Short Trader I’ve been bullish twitter for the last 2 years (as others can attest to; go ahead and verify) and am happy to see that it has gone public under favourable market conditions. I find it interesting that 68% of investors believe twitter’s stock price will close lower than $44.90/share within the next 6 months:
— Bloomberg News (@BloombergNews) November 22, 2013David Einhorn: This NJ Deli With One Location And Little Revenue Is Trading At $100M+ Valuation
In his first-quarter letter to investors of Greenlight Capital, David Einhorn lashed out at regulators. He claimed that the market is "fractured and possibly in the process of breaking completely." Q1 2021 hedge fund letters, conferences and more Einhorn claimed that many market participants and policymakers have effectively succeeded in "defunding the regulators." He pointed Read More
Yes, twitter’s valuation is absurd. Yes, the business is (currently) ponzi-financed. Yet investors’ pessimism is real. And rarely is such lop-sided sentiment perfectly correct. Such sentiment is not indicative of euphoria.
Now, the valuation is most definitely reflective of exuberant public and private capital markets. But shorting on valuation alone is as wise as buying on valuation alone. For example, if you short a zero revenue business at $x, it can go to $nx (where n >= 2) before it goes to zero (or not)…
This post is not meant to be a comprehensive analysis of the shares of twitter, but to highlight the lop-sided sentiment against twitter shares.