Quantcast

Twitter stock overvalued, company still ‘a long way from profitability,’ Barron’s says

By Reuters
Monday, May 5, 2014 6:22 EDT
google plus icon
Twitter (AFP)
 
  • Print Friendly and PDF
  • Email this page

U.S. micro-blogging company Twitter Inc still looks overpriced even after a 47 percent drop from its late December high of $74, according to an article in the May 5 edition of Barron’s.

Officials at Twitter were not immediately available for comment.

The Barron’s article said Twitter trades at a “big premium” to other Internet stocks based on its price/sales ratio, and its user growth is slowing.

The company “appears to be a long way from profitability, based on conservative accounting that properly treats as an expense its massive stock-based compensation to employees,” the article said.

Shares of Twitter, which ended on Friday at $39.02, could drop toward $30, which would still leave it trading at a premium to Facebook Inc on a price/sales ratio, Barron’s said.

The number of U.S. users at 57 million appears to be plateauing despite efforts to make Twitter more appealing, Barron’s said, warning that “Twitter’s quirky format may make it tough for it to become a mass-market medium like the more user-friendly Facebook.”

Reuters
Reuters
Reuters.com brings you the latest news from around the world, covering breaking news in business, politics, technology, and more.
 
 
 
 
By commenting, you agree to our terms of service
and to abide by our commenting policy.
 
Google+