Profile image
By ProactiveInvestors (Reporter)
Contributor profile | More stories
Story Views

Last Hour:
Last 24 Hours:

Twitter takeover looks unlikely – broker

Monday, October 24, 2016 6:25
% of readers think this story is Fact. Add your two cents.

Twitter Inc (NYSE:TWTR) is growing too slowly and there’s no clear cut buyer of the company, that’s the view of broker Wedbush.

The narrative is far more damning than suggested by analyst Michael Pachter’s ‘neutral’ rating, which comes with a US$14 per share target price (current price US$18).

Pachter acknowledges that Twitter is “the place to go” for live broadcast – a point underlined by Twitter’s successful recent NFL Thursday Night Football project – but he says management is too ‘unfocussed and complacent’.

“Until Twitter is focused on attracting new users, driving increased use by its existing users, and demonstrating its value proposition to people who don’t use the service, we expect it to grow very slowly,” he said.

“We think that its service is too complicated and difficult to use for the average Internet user despite multiple changes.

“In our view, there is no clear-cut potential buyer for Twitter.”

Pachter says that takeover speculation has been the main support for Twitter’s share price, yet high profile potential acquirers have walked away.

“As Twitter generates only limited free cash flow, has a bloated cost structure and limited growth trajectory, we continue to see a takeover in the near term as exceedingly unlikely.”

That said, Wedbush expects Twitter to report third quarter revenue at the high end of guidance when it releases its figures later this week – noting that activity on the platform has been driven by the US presidential election, live event streaming and video.

It estimates US$610mln of third quarter revenue, with US$150mln of earnings.

“Our top-line estimate contemplates year-on-year growth of 7%, below last quarter’s 20% and significantly below the levels seen in every quarter of 2015,” the analyst added.

Twitter is due to release its results for the third quarter on Thursday, after the market close.

Story by ProactiveInvestors


We encourage you to Share our Reports, Analyses, Breaking News and Videos. Simply Click your Favorite Social Media Button and Share.

Report abuse


Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories



Top Global

Top Alternative



Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.