Opinions
David Burrows
Twitter, Inc
TWTR-N
WEAK BUY
Aug 16, 2017
$16.160
Stock price when the opinion was issued
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Last week, Elon Musk announced that he will layoff staff because he feels unconfident about the economy, but today he reversed himself. Shares have been bouncing. Musk has a disclosure problem and needs a lawyer to run statements by. Twitter shares sank under 2% today. He loves Elon, but has Elon ennui.
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BUY
There's big potential here, because it doesn't serve small businesses in America which equal 66% of digital ad spending which is going to Facebook and Google instead. This platform serves only large brands, but that's a smaller part of the market. Twitter has been miserable for investors and has seen a revolving door of CEOs. The fair price of the Elon Musk deal is $30/share. Musk will never find out the data he wants about bots because it would break privacy laws. It's at an impasse. Twitter should take the deal, but all this wrangling exposes what a mess there is in management there, and is scaring away large customers.
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COMMENT
Musk pulls out of Twitter deal today It's ridiculous that Musk says that they Twitter board is withholding any information. Also, any buyer should do his due diligence. Let Musk figure this out. At the same time, the board must get this deal done for the sake of the company and its shareholders. The court is smart, will do its job and enforce the law. Musk either litigates this for a long time and ultimately buy a vastly depleted Twitter or negotiate to buy Twitter now at a lower price, but fair to both sides.
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BUY
Musk doesn't have a case. He will lose. Look at the evidence. This was a hostile takevover, after all, so he can't now play hard to get. The judge will award Twitter damages. One way or another, money will go to Twitter. Why should Twitter anything less than the share price Musk had offered? Twitter did nothing wrong; Musk showed bad faith. Whatever happens, Twitter is a buy.
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BUY ON WEAKNESS
He sold it over the summer and didn't get back in, because he expected shares to come back down to $35. It's one of the worst-run social media companies. He doesn't know why Elon Musk didn't negotiate for lower, but accepted the higher price. He hopes Musk cleans house--it's a horrible company. He sold it earlier and missed an opportunity.
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Twitter, Inc. is the best and fastest place to see whats happening and what people are talking about all around the world. From breaking news and entertainment to sports and politics, from big events to everyday interests. If its happening anywhere, its happening first on Twitter. Twitter is where the full story unfolds with all the live commentary and where live events come to life unlike anywhere else. Twitter is available in more than 40 languages around the world. The service can be accessed at Twitter.com, on a variety of mobile devices and via SMS. Social media mentions are up 367% in the past 24h.
Social Media is a force that is going to continue for some time. This has been a really volatile stock because they’ve had a hard time finding the right mix of business to deliver earnings to investors. Years ago it was a momentum stock, but today it is more of a value stock. It has a tremendous number of people that use the service, and you are not paying much for that. They haven’t got the service right yet, but it is a really dominant platform. Technically it made a low in April/16, then rallied and pulled back. It made a higher low in April of this year of around $14. It has pulled back again. There are 2 things that can go right. 1.) They ultimately get the business model right and take advantage of all those users. 2.) Somebody decides to buy the assets and make it more usable. Doesn’t think there is a lot of room to get hurt. Would prefer to focus on Facebook (FB-Q).