Analysts think Twitter 'not worth the hype': Report
The micro blogging site's opening price of 45.10 dollars a share, 73 percent higher than its IPO price.
Washington: Few analysts believe that Twitter, which is soaring in market debut, is not worth the hype.
Twitter's five lead underwriters evaluated the company, right after the end of the 'quiet period', a Securities and Exchange Commission-mandated one-month silence after a company's initial public offering.
Analyst Justin Post of Bank of America Merrill Lynch gave a 'sell' rating, indicating that the stock is not worth its price, 40.92 dollars at the time of the report, 44.95 dollars at Friday's close).
According to the New York Post, one week after the company went public, Scott Kessler, an analyst at S and P Capital IQ, initiated coverage of Twitter with a 'sell' recommendation.
Kessler said that there were plenty of reasons to doubt Twitter, adding that one of the reasons being that the 7-year-old company has yet to turn a profit.
The micro blogging site's opening price of 45.10 dollars a share, 73 percent higher than its IPO price, valued the company at 31 billion dollars, the report said.
Kessler said that unlike Twitter, which has faced a lot of uncertainties, Facebook has overcome significant challenges they've seen over the past year or two, it added.
According to the report, Rob Enderle of Enderle Group, a technology analysis company, said that Twitter is even more dependent on mobile than Facebook. It lives and dies in the mobile arena.
He added that the end result of advertising on mobile is a bigger problem for Twitter.
Twitter reported 232 million active users at the time of its public offering - nearly one billion less of Facebook's user base of 1.26 billion, the report added.