Shares of Twitter Are Hitting New Lows

Heading south for the winter.

What's Behind the Decline in Twitter Shares?

Shares of Twitter are hitting new lows today, down more than 3 percent to trade below $19 a share.

Wall Street firm Mizuho Securities initiated coverage with a neutral rating and a price target of $21, meaning that a recovery to the days when Twitter traded above $70 isn't expected to happen soon. Here's more from the note:

"We believe that Twitter is a unique online asset which has the pulse on real-time data, expression, and sharing. However, Twitter has failed to communicate its value to the broader user base and has struggled with product execution in the past, all while competition for incremental ad dollars continues to intensify. For us to get more constructive on the stock, we need to see sustained user growth, better product execution, and margin improvement."

Also discouraging to Mizuho was a recent survey it conducted on social media use on mobile devices, which showed deteriorating usage for Twitter.

"In June 2015, our 1,000+ person survey of U.S. mobile users indicated that Twitter was the third most popular social app. In November 2015, our 1,000+ person survey indicated that Twitter declined in the rankings, coming in behind others that included Facebook, Instagram, LinkedIn, and Pinterest. And this was five weeks after Twitter's Moments product launched."

Wall Street, as a whole, remains cautious on Twitter, with the majority of analysts issuing neutral or hold ratings.

Morgan Stanley's Brian Nowak issued updated coverage on Twitter this week and now has a price target of $18 for the next 12 months, one of the lowest on the street. 

"Despite any potential benefit from 'Moments' or Twitter's [fourth quarter] TV ad campaign, engagement–time spent [per] user – is still falling [more than 20 percent year-on-year]," he said.