Pivotal Research Analyst Explains His Twitter Downgrade, Says 'It's Not For Everybody'

Twitter Inc TWTR shares were trading in the red on Wednesday following Pivotal Research Group's Brian Wieser's downgrade of the stock from Buy to Hold, while keeping the price target unchanged at $51. In his note, Weiser argued that service offered by Twitter is ‘niche'.

Weiser was on CNBC recently to discuss the reasons behind the downgrade.

Volatility Is All Over The Place

"The stock hit my price target, we upgraded it back in December," Weiser said. "I think it might have been the day of the bottom of the second-half of the year, where it was clearly too cheap, it was clearly being beaten up and now the reverse has happened. This is a valuation call, but at the end of the day valuations are […] when you look at a name like this where the volatility is all over the place."

Not For Everybody

Weiser was asked if he really doesn't like Twitter at all as is evident from his note in which he wrote ‘a core product that only has niche market appeal at maturity'. He replied, "I actually think very positively about the company. I think very positively, much more positively than I think most of the analyst community about the company's capacity to actually execute, and integrate and evolve what their offering is to advertisers."

"I don't think that's been appreciated, certainly not when the stock was on its way down. I do disagree with the company's belief that I guess this is a ubiquitous product, I don't believe it's for everybody, that much is certain."