Updated from 4:24 p.m. to include additional information on eBay.
SAN FRANCISCO (TheStreet) – Digital River (DRIV) plunged by more than 20% after it gave Microsoft (MSFT) more time to consider whether to continue using its Web site hosting and development service. Twitter (TWTR) , meanwhile, fell sharply after representatives from the L2 research firm projected the social media will see year over year declines, while eBay (EBAY) jumped after an analyst upgrade.
Digital River fell 22.7% to close at $19.71, after the company disclosed it had given Microsoft an additional 18 days to decide whether it wants to continue its distribution agreement with the Minnetonka, Minn., company. Microsoft now has until Dec. 19 to make its decision, rather than its previous Dec. 1 deadline.
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Under the agreement, Digital River develops, hosts and manages Microsoft's online store that sells both software and hardware.
One thing investors may want to keep in mind that as the year comes to a close, customers will often play hardball with vendors in order to extract the best deal possible leading into the New Year. Vendors, meanwhile, want to record as many sales as possible before the financial books close at the end of the year. Digital River has had a Microsoft Operations Digital Distribution Agreement with the Redmond giant since Sept. 1, 2006.
Twitter fell 5.7% to close at $36.29.
The San Francisco company took a hit after research firm L2 issued comments on an analysts call that sized up the various social media sites. In Twitter's case, L2 says the company is expected to "decline in value year over year," noted a report in Investor's Business Daily.
L2 representatives issued their comments during a conference call put on by RBC Capital Markets for analysts. Twitter was not alone in this forecast, however. Pinterest was also lumped in with that analysis.
Instagram has grown by roughly 250 million users since 2012, but Pinterest has roughly stayed the same at 60 million users, observed L2.
Shares of eBay rose 0.53% to close at $55.10, on a day with the broader markets fell into the red.
The Silicon Valley e-commerce giant got a lift after Stifel Nicolaus analysts upgraded their recommendation to a "buy" from a "hold." In giving the company a thumbs up, Stifel Nicolaus said it believed eBay's eventual spin off of its PayPal division will aid both companies in growing their respective operating profits faster than their revenue, while also investing in growth.
eBay expects to spin-off PayPal in the next nine months.
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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.
TheStreet Ratings team rates DIGITAL RIVER INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DIGITAL RIVER INC (DRIV) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."
You can view the full analysis from the report here: DRIV Ratings Report