Tuesday, June 3, 2014
Nothing is Wrong with Twitter Inc. that Price Can't Fix
The difference between a company performance and its stock is no clearer than the action in Twitter (NYSE: TWTR ) following tits IPO. Recently, the company reported that revenue surged over 100% while its stock collapsed 50%. For investors, it should bring to bear that the market routinely disengages from the fundamental analysis and valuation of a company. The company's stock becomes a trading mechanism where traders hope to see the price jump in the next couple of hours or days, regardless of the underlying fundamentals.
Typical with a company's stock that's down 50%, the conversation moves away from the greatness of the company to the weakness of the stock. In reality, Twitter is a great growth story that was out of balance with the stock valuation.
Read the full article here.
Disclosure: Long YELP. Please read the disclaimer page for more details.