Wunderlich, which has given Twitter (TWTR) a $34 PT, is the third firm to give the microblogging leader a bearish rating (either through a coverage launch or downgrade) since shares ripped higher on IPO day (Nov. 7). Five others have assigned Neutral ratings, as the sell-side tries to weigh Twitter's still-massive growth and long-term ad/data monetization potential with a valuation of nearly 40x 2013E sales.
Short-sellers have begun aggressively betting against Twitter, leading to a sharp increase in borrowing costs. Likewise, Twitter's first day of options trading (Friday) ended with a put/call ratio of 2.02:1.
Shares are still up 67% from their $26 IPO price, but down 4% from an opening trade of $45.10.