We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Shares of Twitter slumped more than 5% in morning trading Tuesday after well-known short-selling firm Citron Research turned bearish on the social media company, slapping the stock with a price target that would represent a nearly 22% downside from Monday’s close.
Citron previously held a bullish stance on Twitter, but in a new report published this morning, the firm said it had sold its long position and was now shorting the stock in the wake of renewed public awareness of data privacy.
This new skepticism comes after fellow social media company Facebook found itself at the center of an international scandal related to its collection of user data.
Facebook’s scandal was inspired by reports that Cambridge Analytica, a controversial political consulting firm with ties to conservative billionaire Robert Mercer and the 2016 Trump campaign, inappropriately accessed data from up to 50 million Facebook users (also read: What Investors Need to Know About Cambridge Analytica and Facebook).
Facebook shares dropped nearly 15% since the reports first emerged, with the story quickly growing to include overarching questions about internet privacy and the nature of ad-driven tech companies—including Twitter and Alphabet (GOOGL - Free Report) .
“Alongside Facebook and Google, Twitter is now being hauled in by Senate Judiciary Chairman Chuck Grassley (R-Iowa) to a hearing on data privacy on April 10,” Citron said in its new report.
The research firm suggested that the Senate would be particularly interested in learning that Twitter is reportedly on track to generate about $400 million this year by selling user data.
Citron also pointed out that Twitter’s data licensing revenue in 2017 was $333 million, and with the firm assuming 100% margin in this segment, it argued that the sale of user data likely accounted for about 80% of the company’s total profits last year.
Taking a step back from Citron’s report, it does feel safe to say that investors are starting to feel that the status quo is changing for social media companies. If users decide that they are fed up with headlines like those associated with Cambridge Analytica, the business model for brands like Facebook and Twitter might need drastic changes.
Still, analysts as a whole have not turned bearish on Twitter just yet. Over the past 60 days, the company has witnessed 12 positive revisions to its full-year EPS estimates, outpacing the two negative revisions it has seen within that window. Overall, the Zacks Consensus Estimate for Twitter’s full-year earnings has gained 15 cents in this timeframe.
Analysts are now expecting Twitter to report full-year adjusted earnings of 60 cents per share, which would represent year-over-year growth of about 36%.
Nevertheless, analyst sentiment could shift soon if Twitter starts to see regulatory pressure, or pressure from its users to change its practices. Investors should continue to keep a close eye on the developing data privacy storyline that internet companies are just now starting to face.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeneyon Twitter!
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Why Is Twitter (TWTR) Stock Sinking Today?
Shares of Twitter slumped more than 5% in morning trading Tuesday after well-known short-selling firm Citron Research turned bearish on the social media company, slapping the stock with a price target that would represent a nearly 22% downside from Monday’s close.
Citron previously held a bullish stance on Twitter, but in a new report published this morning, the firm said it had sold its long position and was now shorting the stock in the wake of renewed public awareness of data privacy.
This new skepticism comes after fellow social media company Facebook found itself at the center of an international scandal related to its collection of user data.
Facebook’s scandal was inspired by reports that Cambridge Analytica, a controversial political consulting firm with ties to conservative billionaire Robert Mercer and the 2016 Trump campaign, inappropriately accessed data from up to 50 million Facebook users (also read: What Investors Need to Know About Cambridge Analytica and Facebook).
Facebook shares dropped nearly 15% since the reports first emerged, with the story quickly growing to include overarching questions about internet privacy and the nature of ad-driven tech companies—including Twitter and Alphabet (GOOGL - Free Report) .
“Alongside Facebook and Google, Twitter is now being hauled in by Senate Judiciary Chairman Chuck Grassley (R-Iowa) to a hearing on data privacy on April 10,” Citron said in its new report.
The research firm suggested that the Senate would be particularly interested in learning that Twitter is reportedly on track to generate about $400 million this year by selling user data.
Citron also pointed out that Twitter’s data licensing revenue in 2017 was $333 million, and with the firm assuming 100% margin in this segment, it argued that the sale of user data likely accounted for about 80% of the company’s total profits last year.
Taking a step back from Citron’s report, it does feel safe to say that investors are starting to feel that the status quo is changing for social media companies. If users decide that they are fed up with headlines like those associated with Cambridge Analytica, the business model for brands like Facebook and Twitter might need drastic changes.
Still, analysts as a whole have not turned bearish on Twitter just yet. Over the past 60 days, the company has witnessed 12 positive revisions to its full-year EPS estimates, outpacing the two negative revisions it has seen within that window. Overall, the Zacks Consensus Estimate for Twitter’s full-year earnings has gained 15 cents in this timeframe.
Analysts are now expecting Twitter to report full-year adjusted earnings of 60 cents per share, which would represent year-over-year growth of about 36%.
Nevertheless, analyst sentiment could shift soon if Twitter starts to see regulatory pressure, or pressure from its users to change its practices. Investors should continue to keep a close eye on the developing data privacy storyline that internet companies are just now starting to face.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>