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Not Sure If These Guys Are Crazy Or Brilliant (TWTR)
Posted by: Intelligent Speculator (IP Logged)
Date: December 19, 2013 07:16AM

I’ve written several posts about social media stocks and have been bullish about the main companies involved. That being said, I only hold stock of Facebook (FB) mostly because I’ve found the valuation of LinkedIn (LNKD) to be too high.

I also had significant concerns about Twitter (TWTR) when the stock turned public. As you can imagine, that sentiment is only stronger:

I simply cannot see how Twitter will be able to generate enough to justify such a valuation. Even the consensus estimates have Twitter losing $0.21/share this year and $0.06/share in 2014.

While I see tremendous opportunities for companies such as LinkedIn and Facebook to see strong growth, I’m not as convinced that Twitter can also pull it off. Why? Less users, no obvious alternatives to advertising, etc.

Would I Short TWTR?

While I’d never buy TWTR at these prices, I can’t imagine shorting either. Twitter is not only an unbeleivable product but it’s a “trending” stock and i could easily imagine that run going much higher. Clearly, others don’t agree. Look at the number of shares being borrowed:

Are they smart? Crazy?

Stocks Discussed: TWTR, FB, LNKD,
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