Twitter Inc. (NYSE:TWTR) Continues To Surge

Posted by Chris Bell December 26, 2013 0 Comment 1478 views

Twitter Inc. (NYSE:TWTR)’s stock seems to be the biggest investment gift from Santa this holiday season. The stock is creating new highs day after day and this time it touched $70.87 before closing at $69.96, gaining 8.40% during a trading session on Tuesday. The previous closing marks 80% gains from its low of $38.80. While the rival social media giant Facebook Inc. (NASDAQ:FB)’s stock has gained 29.3% during past one month, Twitter’s stock has surged more than 79% during the same period.

However, Facebook Inc. also registered its 52 week high of $58.58 on Tuesday, ahead of Christmas. The stock has more than doubled its value over the past twelve months.

Concern over Price Surge

Ad-streaming remains primary source of revenue for Twitter Inc. (NYSE:TWTR) and here it competes directly with Facebook Inc. (NASDAQ:FB) and Google Inc. (NASDAQ:GOOG) among others. While both the competitors are doing well with their business and have been profiting from ad-streaming, Twitter Inc. is yet to post any profit. Hence the steep surge in its stock price is merely reflecting speculative bet from investors who believe in the future potential of this micro-blogging site.

Equity research analyst at Wunderlich Securities, Blake Harper once again reaffirmed the “sell” rating for the stock of Twitter Inc. with a price objective of $36. Harper said, “It appears valuation metrics are irrelevant and that investors are betting aggressively on Twitter being the next great media-technology platform,” and added, “we don’t believe the current valuation justifies the risk, especially with the company having yet to report a quarter as a public company.”

The Optimism

Twitter Inc. (NYSE:TWTR) is believed to capture larger portions of the mobile and TV advertising market as it seeks to market its offerings through wireless devices and ties with television programming. The micro-blogger also recently announced about targeted ads which could offer marketers to target the most likely audiences for their advertisements and thus generating better business inquiries per clicks.

However only time would be able to answer how much these initiatives will really help Twitter Inc. to garner profit out of this.

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

View all post by Chris Bell Visit author's website

Write Your Comment