twitter-ceo

One of the biggest initial public offerings in 2013 came from Twitter. The microblogging network finally went public, it was touted to be the second biggest technology related IPO after Facebook last year. Twitter stock price soared in days that followed after the IPO, ballooning its market capitalization, but it appears that the surge might have been temporary. Once again, Twitter’s share dropped at market opening today down to $60.27 as opposed to the $63.75 closing price on Friday. On Friday alone shares dropped 13 percent, wiping $5 billion in market cap.

A number of analysts have raised questions about the company’s profitability. Yet to make any profit whatsoever, analysts believe that the company won’t be able to turn a profit until 2015. Ben Schachter has already downgraded Twitter stock while Bespoke Investment Group believes that the average price target of the microblogging network’s shares is at $44.27, roughly 35 percent under the current trading price. A major source of revenue is going to be advertising and with its announcement of retargeted ads, Twitter saw the stock reach an all time high on December 26th, which it touched $73.31 and added $15.7 billion in market cap. What is being referred to as the honeymoon period has now ended, and even though Twitter burst on the market with a 74 percent increase in stock price on IPO day, no ones forgetting that it all hinges on profitability.

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