Twitter.com Stock Seen As Overrated

By Masimba Biriwasha | Global Editor At Large | December 30 2013 | @ChiefKMasimba

The 140 character-limit micro-blogging platform, Twitter, which launched on the New York Stock Exchange (NYSE) to much aplomb in November has been in the news headlines recently for being overrated with its rise seen as largely a product of speculation.

There are fears among analysts that the company’s shares, currently trading at $60.27, are overpriced. Twitter’s stock has been on an upward trend ever since it went public on November 6 at $26, reaching a high of $74 before taking a huge shed.

“At $45 billion, the company may have the highest market value of any firm that isn’t generating any earnings since the dotcom bubble of 1999-2000,” New York Times quoted Barron’s, an investment advisory publication.

It is estimated that are 230 million active users on Twitter who post an average of 500 million Tweets every day but questions abound over its rating ahead of other tech companies with more robust models.

“Twitter, which has triple-digit revenue growth but no profits is trading at a much higher valuation than proven Internet powerhouses like Facebook and Google. The company has released no major news or financial information since its initial public offering that would shape invest or perceptions about the company,” New York Times reported.

Because Twitter is mobile friendly, there are expectations that it will benefit “from the shift of the Internet use to mobile devices and the migration of television advertising budgets to the Internet.” There is expectation that Twitter’s best days are still ahead; it is regarded as a potential advertising behemoth.

Created in 2006, Twitter is a global real-time communications platform with 400 million monthly visitors to twitter.com.  With that number of users and growing daily, Twitter is sitting on a goldmine, that is, if it can deliver advertising in a way that does not irk its huge user base.

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