Wunderlich's Blake Harper, who launched coverage on Twitter (TWTR +7.3%) with a Sell on Nov. 18 and reiterated his view on Nov. 29, suspects the microblogging service's "cult status" among investors is contributing to its huge gains. "It appears valuation metrics are irrelevant and that investors are betting aggressively on Twitter being the next great media-technology platform."
Harper also notes 22% of Twitter's float was shorted as of Nov. 29, and that the float consists of just 11% of diluted shares outstanding. "There is $5.2 billion of public investor capital supporting the $46 billion market cap."
Shares are now up 164% from their $26 IPO price.
Yesterday: Twitter soars again; valuation reaches stratospheric levels