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Citron's Andrew Left Sees Snap As A 'Much More' Compelling Investment Than Twitter

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Citron's Andrew Left Sees Snap As A 'Much More' Compelling Investment Than Twitter

For the last year, short seller Andrew Left has been uncharacteristically bullish on Snap Inc (NYSE: SNAP). This week, he doubled down on the beleaguered social media platform after Twitter Inc (NYSE: TWTR) revealed mixed third-quarter results.

The Social Reports

Snap exceeded most estimates for revenue, user engagement and average revenue, and earnings before interest, tax, appreciation and amortization (EBITDA).

Twitter reported a modest bottom-line beat and year-over-year growth in monetizable daily active users, but the wins accompanied a steep revenue miss. Management claimed $823.7 million in sales against consensus estimates of $874.1 million.

“Does not look good,” Left told Benzinga. “Snap is so much more of a compelling investment. Twitter platform is chaos and advertisers see it.”

See Also: User Engagement, Ad Growth In Focus As Sell-Side Reacts To Snap's Q3 Earnings

Left’s Take On Media

Less than two years ago, Left had a different take on the rivals’ comparative prospects. In January 2018, Left praised Twitter’s buyout potential and said the company was a better buy than Snap was. Twitter soon proved its value, and Citron moved to the sidelines.

By the end of the year, Left called Twitter “toxic” and came around on Snap. Unfazed by Snap’s “corporate defections,” he suggested the platform would make an interesting integration target for the likes of Amazon.com, Inc. (NASDAQ: AMZN).

“If you look at what it’s trading at per daily active user compared to Facebook, it’s extremely cheap,” Left said on CNBC. “Can somebody just come in there and turn the company around or make a strong partnership?”

At the time, he was inspired by Snap’s ability to maintain what he considered a high valuation amid increasingly negative news.

Within a few months, Left reversed his bearish Twitter position on faith that on-platform politics could revive user engagement. Now, Twitter is old news, and Snap is still in.

At time of publication, Twitter traded down 18% at $31.54 per share, while Snap traded around $13.23 per share.

Latest Ratings for SNAP

DateFirmActionFromTo
Nov 2019UpgradesHoldBuy
Oct 2019MaintainsNeutral
Oct 2019MaintainsOutperform

View More Analyst Ratings for SNAP
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Posted-In: Andrew Left Citron ResearchAnalyst Color Short Sellers Top Stories Exclusives Analyst Ratings Trading Ideas Best of Benzinga

 

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