A remarkable rise after IPOThe micro blogging site surged 76% this month and added 182% after issuing its IPO in early November. At present, the company has a market capitalization of $39.9 billion, which is more than that of Target Corp's $39.5 billion and that of Time Warner Cable Inc's $37.6 billion, according to factSet. Both Target and Time Warner posted earnings of $341 million and of $532 million respectively, but Twitter Inc ( TWTR) has yet to post a profitable quarter. The micro blogging site, which is popular amongst celebrities and the entertainment world, has not announced any big development since its IPO issue on November 6 th. Twitter's stock has rallied after issue of its IPO along with some up gradation in its product, including a better mobile app and the addition of photos and videos on the user's main news feed. In order to allure users and enhance its ad effectiveness, Twitter Inc ( TWTR) keeps on adding new tools. Twitter shares have also seen an increase in their trading volumes, which indicates the upside in the stock. Trading volume was more than 5 times the stock's 30-day average trading volume.
Analysts not very optimistic on TwitterMany investors are piling into the stock, which in turn is giving it upward momentum. For instance, Reuben Kressel bought 500 shares earlier this month, when the stock was trading around $52. Kressel said that the analysts were not very optimistic on the stock’s future, which excited him to follow the reverse strategy. “Everybody was against it, and every day it was going up,” said Mr. Kressel.
Investors are optimistic on Twitter Inc ( TWTR) even though the analysts are downbeat with nineteen of the 26 Wall Street analysts assigning a "hold" rating or "sell" rating to the stock, according to Thomson Reuters. According to the analysts, investors are just flowing with the trend believing that other investors would also buy the stock.Blake Harper, one of the research analysts at Wunderlich Securities Inc said “It appears valuation metrics are irrelevant." The analyst came to the conclusion after comparing the stock price with measures such as profit and revenues. -By Aman Jain