Twitter Market Worth Surges To $50 Billion Regardless of Trump Ban, And Shares May Run One other 25%

Top line

Twitter shares hit a seven-year high on Wednesday after the social media giant reported fourth-quarter earnings on Tuesday after a close that beat analysts’ expectations, allaying Wall Street concerns that the The company’s recent booming growth could “implode” as a result of the platform’s decision to ban former President Donald Trump.

Twitter shares soar after the company’s massive fourth-quarter earnings jump.

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Key factors

As of 11:15 a.m. Eastern, Twitter shares rose nearly 9% on Wednesday, hitting their highs in early February and increasing the company’s market cap to $ 51.5 billion – a level not seen since the company’s inception as a publicly traded company more was achieved in January 2014.

In a statement to customers on Wednesday morning, pivot research analyst Michael Levine raised his price target on Twitter shares to $ 77.25. That put the stock 25% above current levels due to a “significant acceleration” in advertising revenue of $ 1.2 billion last quarter. almost 12% more than analysts expected.

The company’s total revenue of approximately $ 1.3 billion also exceeded analyst expectations, up 30% year over year and 10% above average analyst expectations. The earnings per share of 38 cents were almost 25% above the average forecast.

A number of other analysts, coming from companies like MKM Partners, JP Morgan, and KeyBanc, reiterated their buy or overweight ratings on Twitter stock Wednesday, but the company’s average price target of $ 50 (out of 36 analysts who issue such guidance) is still hovering around $ 65 at 30% of current prices.

Piper Sandler analyst Thomas Champion, whose price target is in line with current levels, said the U.S. election helped the company grow its user base in the fourth quarter, which rose 27% year over year to 192 million daily active users, 5 million more than the previous quarter.

tangent

Speaking on CNBC Wednesday morning, Ned Segal, CFO of Twitter, said former President Trump should never return to the platform even if he runs for president again in 2024. Twitter banned Trump from his platform and removed all of his tweets on Jan. 8. two days after rioters stormed the Capitol while lawmakers worked to confirm President Joe Biden’s election victory. The company cited “risk of further incitement to violence” as the reason for the ban, but that did not prevent public figures and even some European government officials from criticizing the move for alleged threats to “freedom of expression”.

Crucial quote

“In both the earnings call and the analyst call-back, we felt that management has led with a boast and confidence that we have not seen in a while,” Levine said on Wednesday. “”[One of] The biggest bear cases we’ve heard on Twitter in months were that post-Trump user growth will implode. “However, once the company goes through the on-site protection constraints that initially spurred user growth in Q2 and Q3, Levine notes that these things are” clearly not happening based on current visibility. “

Big number

$ 14 billion. That’s how much Twitter co-founder and CEO Jack Dorsey is worth, according to Forbes. Although most of his wealth is now tied up in stocks in Fintech Square, which he also co-founded, his net worth still surged nearly $ 100 million as a result of Wednesday’s Twitter rally.

Surprising fact

Twitter stocks are up nearly 80% over the past year.

further reading

Twitter CFO: Trump will never be left behind – even if it runs again in 2024 (Forbes)

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