NEW YORK (TheStreet) -- When a momentum stock loses steam, it often gets crushed. But at some point, the punishment becomes too harsh for the crime. Although Twitter (TWTR) continues to suffer from weak user engagement -- and because it's not Facebook (FB) -- it's tough to ignore how cheap and depressed Twitter shares have become. So if you're an investor who has been waiting for Twitter to become unloved, now's your chance to pounce.
Over the past three months, a period when the broader averages have traded flat, Twitter has fallen some 23%. True, it's still trading at over 50 times fiscal 2016 earnings estimates of 67 cents per share, so it's tough to argue its shares are cheap. However, if you liked Twitter when it was above $50 or even $40 per share several months ago, then you should love it now in the $37 to $38 trading range it occupied Thursday morning.
The narrative on what Twitter is hasn't really changed. Sure, there have been rumblings and speculation that CEO Dick Costolo may step down. And Chris Sacca, one of Twitter's earliest investors, has become increasingly critical about the company's direction, even suggesting that it should be acquired by Google (GOOGL). But what do you expect? When a stock has gotten pummeled like Twitter has of late, people want heads to roll. It's a common reaction -- even if boards don't always bring out the ax. It's a good thing the board of directors at Apple (AAPL), for instance, ignored the pleas to get rid of Tim Cook two years ago.