Twitter cut to sell at Morgan Stanley; off 4% premarket

With the competition for online advertising revenue intensifying, TV ad budgets are more likely to go to YouTube and Facebook first, rather than smaller platforms like Twitter (TWTR), says Morgan Stanley, downgrading the stock to Sell.

The price target of $33, notes the team, would have the stock trading at 14x revenue and 84x 2015 estimated EBITDA.

"Where we could be wrong": Near-term estimates may be conservative, says the team, meaning revisions following late January/early February Q4 results could provide a near-term boost to the stock.

Shares -4.1% premarket

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Comments (4)
  • Quoth the Raven
    , contributor
    Comments (2063) | Send Message
    It's like I've got a sixth - or maybe even a seventh - sense:
    6 Jan 2014, 08:04 AM Reply Like
  • alext1379
    , contributor
    Comments (811) | Send Message
    Timing seems a bit odd. We know its overvalued but there should be a big runup to the Jan 18th expiry from $75 to $100 strikes.


    They even mention there's short term potential for a boost. I think they're doing a Goldman Sachs/Tesla job where they want to buy in cheaper to ride the run.
    6 Jan 2014, 09:45 AM Reply Like
  • 81george
    , contributor
    Comments (299) | Send Message
    I just called MS and warned them that if their analyst's rating turns out to be bogus I will be closing my account with them and trust me they don't want that :) They were swearing TWTR is a bubble with no substance to justify the current price.
    6 Jan 2014, 10:29 AM Reply Like
  • toosmarttofail
    , contributor
    Comments (699) | Send Message
    TWIT is a legitimate $15-20 stock. I raised my target from $10 due to a very subtle but significant change in their site.


    It used to be if someone blocked you on TWIT, you couldn't reply to their tweets. This allowed peopel to crush any dissenting opinions, which warped both free speech and the flow of information. Now they allow you to reply to those who block y9ou, which means those who want to go out there and interact with the public can't cherry-pick what the public says. Facebook doesn't operate this way at all, so TWIT should eventually outlastw FB.


    The problem TWIT has is that internet usres are selfish and greedy. They are like l9ocusts, and will eat your bandwidth alive without feeling the need to support sponsors. When TWIT falls, they just go to the next target and pick it clean, as when they moved off of MySpace.


    TWIT also has use as an instant, emergency communications vehicle for governments, media, institutions, and celebrities alike. Without uestion iit has value. It just doesn't have this ridiculous value. MySpace found its niche as a music platform and is still worth about $50 million. I can see TWIT at $10 eventually but not higher, though as a trading stock it could go to $200 before the roof caves in.


    Enjoy the ride, but get off the elevator if you make a profit. For long-term investing I like ACTC and their cure for blindness, but that's just me. Also stem companies in general.
    6 Jan 2014, 10:38 AM Reply Like
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