Twitter (TWTR) fell on Friday after the company's shares received a downgrade from analysts at UBS, who see the social media platform coming to “a bit of a crossroads” in terms of balancing its popular network and offerings with the cost of keeping it safe and secure.
Twitter stock was down about 1% in morning trading after UBS analyst Eric Sheridan downgraded the shares to neutral from buy, writing in a note to clients that continued investments into safety and security and ad technology are likely to cap valuation levels.
Sheridan also trimmed his price target to $35 from $37.
In his note, Sheridan said he and his team are expecting Twitter to have a banner year on the ad front, thanks to large-scale events including the 2020 Olympic games, European football championships and the U.S. presidential election.
However, the company still needs to invest not only in ensuring the safety and security of its platform from bugs, hackers and other threats, but also in its advertising technology, which needs to be better primed to deliver on management’s long-term goals.
During a presentation at the 2020 Consumer Electronics Show in Las Vegas earlier this month, Twitter revealed that it was testing a new feature that will allow users control over who can reply to their tweets - or block replies completely.
Shares of Twitter were down 0.73%, or 25 cents a share, at $33.94 in morning trading on Friday. The stock has fallen almost 14% over the past three months through Thursday.