Nothing Left to the Imagination for Twitter: Ernst

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

Nov. 8 (Bloomberg) -- Daniel Ernst, principal at Hudson Square Research, examines Twitter’s share price and what he sees as the company’s true value as he has a “sell” rating on the stock with a price target of $20. He speaks on Bloomberg Television’s “Market Makers.”

This before about twitter, and when to ask you -- good company, bad stock?

They are a good stock if you got it on the low it listing price.

The traders will tell you that the price of a security is what people are willing to pay for it.

At a certain point in time, it were completely devoid of rational business metrics.

225 next year's forecast is where the bankers are.

There is really nothing left to the imagination, there is no scenario that isn't already baked into the applied growth rate of where these guys can go.

Perhaps, twitter cannot be as big as facebook, it could be, but if it is, his book trades at 38 times adjusted -- facebook trades at 38 times adjusted.

They originally priced between $70 and $20 -- $17 to $20. they need to take a step back.

I am not a shrinking buyer when it comes to price targets.

When it came to apple, the average target was around 300, and sometimes the market miss prices things because they do not understand the story.

There is no way you could tell me you do not get twitter, it is so fully valued it is beyond the imagination.

Where were you on twitter three days ago before it priced?

When we did our first report, we said this looked exceptionally risk -- rich.

A year and a half ago we said the same thing about facebook.

The thing about facebook which was much different than here is that we were relatively alone and saying that laura -- growth is slowing.

There was this sort of second derivative negative in the earnings trajectory that was a set up.

We do not have that here, but i do not imagine a scenario where all of the sudden growth is going to accelerate much more than it is today.

They are already growing, they spoke went from 55% down to 37%, up to four before -- 44%, and back down.

If twitter is going to go from 100% to all of a sudden 200% or three percent, we may be missing something.

If i understand it correctly but this call is mostly on valuation.

What about some of the other things people point to as explanations for a frothy valuation on the twitter share price, like for example, user engagement or the growth in mobile business?

When you buy a stock, you're basically saying i think there is something you are missing that is going to happen near mint form -- midterm that is going to be a growth story.

International is certainly a big opportunity, they have about an 89% discount.

They say they can just close that gap, but facebook was a lot more mature, and they are at a 75% discount.

When they were at this size, with this many users and revenue, they had a three five percent positive operating market, twitter is -11%. there is something different in their cost sector -- cost structure that we do not understand.

The growth of earnings will erode significantly last year -- nexyt year.

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change