Advertisement

Twitter stock continues to slide

Twitter stock continues to slide - image
AP Photo/Richard Drew

NEW YORK – Twitter’s stock price continued a recent decline on Wednesday, closing down 3.5 per cent to $59.29 after an analyst lowered the short messaging service’s rating on concerns that its stock price is too high.

Shares of Twitter Inc. surged 53 per cent in December as investors disregarded the company’s lukewarm early-November initial public offering. But the company’s soaring stock price has given analysts pause, even as they remain upbeat about Twitter’s business model.

Financial news and insights delivered to your email every Saturday.

Youssef Squali of Cantor Fitzgerald sees big things ahead for Twitter, but says the December surge was unwarranted. At least two other analysts have expressed similar concerns in recent weeks. Squali lowered his rating on Twitter’s stock to “Sell” from “Hold” on Wednesday, calling the stock’s price “excessive.” He thinks a fair value for the stock is $32.

READ MORE: Twitter’s next challenge: Keeping its stock in flight, making money

Twitter, Squali says, “remains one of the fastest-growing companies” and one of the few key players among social Internet companies, but considering its current value he prefers Facebook and Google as investments.

Story continues below advertisement

San Francisco-based Twitter went public nine weeks ago with an IPO price of $26. The stock’s current price is still more than double its IPO price but down 14 per cent for the week.

Sponsored content

AdChoices