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Twitter: buy? sell? hold?

Tuesday, May 06, 2014 - 02:29

May 06- Shares of Twitter touched a post-IPO low as the lock-up on insider selling ends, with new stock on the market are shares a buy, a sell, or hold? Analysts and investors weigh in. Conway G. Gittens reports.

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PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Twitter's wings were clipped as early investors got their first chance to sell. The so-called end of the lock-up period could potentially dump up to nearly half a billion shares on the market. And those looking to sell had a hard time finding buyers. Shares slumped to their lowest level since the November IPO, that's the opposite of what happened to Facebook when its lock-up period ended, fueling the debate as to whether Twitter's stock is a buy, sell or hold. According to Thomson Reuters, of the 31 analysts who rate the stock, only 7 rate it a buy, 13 rate it a hold, and 11 a sell. Morris Mark of Mark Asset Management owns tech titans like Google, Apple, Facebook, Yahoo and Softbank, but says he won't touch Twitter. SOUNDBITE: MORRIS MARK, PRESIDENT, MARK ASSET MANAGEMENT (ENGLISH) SAYING: "It has a fairly substantial total valuation and we look at that. It hasn't shown, and maybe it will start to show, the user growth that would all things being equal impress us and I find - you, know I look at this stuff, we use this stuff for what it is, it is hard to use." REPORTER ON CAMERA: CONWAY G. GITTENS, REUTERS (ENGLISH) SAYING: "But analysts who have a "buy" rating are willing to overlook the continued slowdown in monthly active users like you and me, favoring instead something else: rising ad dollars. They say Twitter is underpricing its ad rates and can collect more cash if it raises that fee. No. 2: they say Twitter is positioned to grab a larger portion of mobile ad revenues. And No. 3 Twitter still has a lot of room to grow internationally." Wait a minute says Robert Peck of SunTrust Robinson Humphrey, he likes the stock and has a hold rating and a $50 price target, but he says you can't just overlook subscriber growth and what those subscribers are doing on Twitter. SOUNDBITE: ROBERT PECK, ANALYST, SUNTRUST ROBINSON HUMPHREY (ENGLISH) SAYING: "We actually did a report with some third-party analysis that said a lot of the newer users coming on weren't as active. It's almost the old 80/20 rule, that 80 percent of the tweets are being created by 20 percent of the active users. The real question here is: how do you accelerate that 255 million, how do you get to be more mass market, right? 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 grand kids, etcetera. So how do they get mass market? I think that's one of the biggest challenges the company is working on actively right now." And until Twitter proves it can do that, the stock may have trouble regaining its IPO glory.

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Twitter: buy? sell? hold?

Tuesday, May 06, 2014 - 02:29