Standpoint's Moas Downgrades Twitter Despite Takeover Speculation

The stock is up 28 percent since Moas' recommendation in January and up more than 50 percent since the second-quarter low.

"It is not easy in this type of environment to get a 28 percent gain and 1200 basis points gain versus the S&P in this environment and I don't want to risk having it taken away," Moas wrote in a note.

According to the analyst, the stock will go to high-20s in the event of a deal. If there is no deal, it could fall back and retest the mid -eens low that it touched in the second quarter.

Related Link: Cowen & Co.'s Social Media Analyst Talks About Twitter's "Well Publicized" Woes

"[S]o there is nothing really to get excited about here with a 30 percent upside at the 30 percent downside. I prefer to take this money put it into another name that has 30 percent upside without the downside risk," Moas continued.

The market is speculating Alphabet Inc GOOG GOOGL's Google, Oracle Corporation ORCL, International Business Machines Corp. IBM and salesforce.com, inc. CRM as potential acquirers. Moas noted, "It looks like a crap-shoot to me right now at $22."

Moas continued that Twitter is now trading at a high multiple despite excluding the large cash position on its balance sheet.

"There is a small chance that a bidding war could take place and drive Twitter above $30 but I don't think that that is a likely outcome. The market has already priced in the risk-reward on a deal happening or not happening," Moas added.

At time of writing, shares of Twitter fell 3.14 percent to $21.93. However, by time of publication, the stock was up 0.31 percent at $22.69.

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