Twitter (TWTR) Has Declined 13% Since IPO
As with most IPOs, Twitter had an initial boost, but has since dropped. Just today, Twitter dropped nearly 5%. It is following the trend of Facebook and LinkedIn IPOs quite nicely. Just look at the chart below:
Twitter Isn’t Profitable
Leaving the fact that IPOs are never a good idea aside, let’s look at Twitter from a financial perspective. In its recent filing with the SEC, Twitter reported total revenue of about $317 million while its expenses were nearly $400 million, resulting in a loss of about $80 million. Double Roller argues that if Twitter’s YTD revenue (not including any expenses) were extrapolated to include all of 2013, Twitter’s P/E ratio would be a whopping 32, 2.5x Apple’s. Factor in expenses and this number would be much higher.
Where Do You Think Twitter Is Headed?
Do you think Twitter is going to continue to plummet? Do you think it will strike a surprising recovery? Let us know in the comments!
The author of this article has a put option on the stock described above.
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