Twitter stocks fall post listing, Facebook and LinkedIn expected to perform better

twitterlogoAfter making its debut in Wall street recently on Nov. 7 with a big bang, Twitter shares are now falling like the deck of cards. The shares are down over 7% in comparison to its first day closing price of USD 44.50 per piece. Currently, at the time of writing this story, the stock was trading at USD 41.57.

As per the analysts estimates, the stock will further drop to USD 28 per share by June, as the investors are bit sceptical about the company’s profitability till 2015. On the other hand, on CNBC hedge fund manager expect it to fall 80% in future.

Twitter, which was listed at an initial price of USD 26 per share, saw a high of USD 50 per share in the initial five days of trading. However, since its debut day, the closing price as well as the share volume has fallen significantly.

As depicted in the graph below, the stock completed its launch month at a close of USD 41.57. Wherein the initial trading volume on the first day was 117 Mn shares, daily trading volume have seen a fall of approx. 6 Mn shares too in the period.

This fall can be attributed to the investors concern over the company’s last quarter losses (USD 64.6 Mn in 3Q13) as well as their belief that the issue has been highly overpriced.

In contrast to twitter’s dwindling post listing performance, Linkedin and Facebook stocks were found to perform at a better price in the last month.

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Below is a comparison chart of the three stocks last month performance. At present, wherein the Linkedin shares are trading at positive high of 2%, facebook is trading at a low of 6% but a bit better than TWTR stocks  hovering at a low of 8%.

Although the stock prices of all three seems to have high rate of fluctuation, as per the reports, experts feel that in the medium term business-wise Facebook and LinkedIn will be better-placed than Twitter.

“We expect Twitter’s average annual revenue per user to amount to $2.8 in 2013, which stands significantly below our expectation for Facebook and LinkedIn. While the figure for Facebook is expected to hit $6.5, the same for LinkedIn will reach $8.3. It is evident that Twitter has a long way to go in terms of monetizing its platform.”, as said by analyst firm Trefis in a report.

To share your views, email at meha@wirefootindia.com

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