Twitter's stock continues recent slide, closes 3.5 per cent lower
In this Feb. 2, 2013, file photo, a smartphone display shows the Twitter logo in Berlin, Germany. (AP / Soeren Stache)
The Associated Press
Published Wednesday, January 8, 2014 8:31AM EST
Last Updated Wednesday, January 8, 2014 6:39PM EST
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.
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.
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.
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.
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