Chowdhry: Twitter Will Fall To $15-$18 Within A Year
Shares of Twitter Inc (NYSE: TWTR) rose more than 9 percent on Monday's trading, after the company announced a two-year deal with the National Football League (NFL) to deliver "uniquely packaged" official NFL video and content to users.
Despite the surge, Trip Chowdhry of Global Equities Research warns the market is moving away from the stock, noting that “[n]o management change or product fix is going to help bring the market back to TWTR."
Chowdhry believes Twitter is a replay of tech-bubble stock darlings like CommerceOne and BroadVision, Inc. (NASDAQ: BVSN), two companies that failed “in-spite of having wonderful stories to tell.”
Twitter also seems to be a replay of 3D Systems Corporation (NYSE: DDD) and Stratasys, Ltd. (NASDAQ: SSYS), he said. Both these stocks were broadly liked by analysts in early-2014. However, both fell roughly 70 percent over the past year.
The analyst predicts that, within the next 12 to 18 months, Twitter will suffer the same fate as CommerceOne, Broadvision, 3D Systems and Stratasys. “Life of some companies, including TWTR is extremely short,” he wrote. They experience a quick surge, “followed by a short plateau and then steep decline."
Twitter's business model "cannot work," he continued. “Only a direct business model will work... but in a situation where there are many free alternatives available to celebrities and political figures ...why will Celebrities and Political figures pay to be on TWTR[?]" he asked
Chowdhry recommends reducing Twitter positions on any spike, and sees the stock falling to between $15 and $18 within the next 12 months.
Latest Ratings for TWTR
|Nov 2016||OTR Global||Downgrades||Mixed||Negative|
|Oct 2016||Goldman Sachs||Maintains||Buy|
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