We have seen Twitter Inc (NYSE:TWTR) being used very commonly by various local and state governments around the world, as well as hundreds of organizations and celebrities. Twitter Inc’s tweets have a huge appeal, but most of these tweets do not even come from its regular users. Even so, things happening on Twitter Inc have great informative value to the world. Twitter Inc’s arch-rival, Facebook Inc (NASDAQ:FB)’s popularity can be measured by its gigantic user base, but Twitter Inc’s popularity should be measured with its impact on global society. However, stock market analysts analyze companies’ performance, popularity, and its future with a different yardstick. Analyst Brian Wieser was on CNBC after Pivotal Research Group downgraded Twitter Inc, citing its size as the reason.
“You know, we upgraded back in December, I think, might have been the day of the bottom of second half of the year. It was clearly too cheap, it was clearly beaten up. And now the reverse has happened. This is a valuation call but at the end of the day, I think, valuations are the way we look at this. Volatility is all over the place,” Wieser said.
Even though his Pivotal Research Group upgraded Twitter Inc (NYSE:TWTR) at the end of last year, Wieser had gone on record to express that Twitter Inc had only niche market appeal at majority. While Wieser says he actually thinks very positively about Twitter Inc, his disbelief stems from Twitter Inc’s unhappy advertisers. He is not sure that advertisers are happy with what Twitter Inc is offering them.
“Just because something is impactful, does not mean it’s valuable – take a look at the newspaper industry. However, Twitter is not a newspaper – it’s something different. Now, I am separating what users are doing from what advertisers will do. Because, at the end of the day, they make money from advertisers, not from users. […] What is a reasonably likely range – the likelihood – where, I think, user’s base will wind up? They are going to be smaller than Facebook, but large enough to be material. […] It doesn’t necessarily change the value propositions for the advertisers who drive the revenue,” Wieser said.
He disagrees with Twitter Inc’s belief that it is present worldwide. In his words, Twitter Inc is not ubiquitous. With time, Wieser thinks, when Twitter Inc (NYSE:TWTR) is not able to offer much to the advertisers, it is likely that advertisers will turn their back on Twitter Inc to go find a larger audience for their content.
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