Twitter shares saw a jump in share price after it was revealed that Citron Research’s Andrew Left believes the stock is due for a big rally.
Andrew Edward Left, an activist short seller, author and editor of the online investment newsletter Citron Research, predicted that Twitter shares will rise because of the company’s initiatives to deliver “personalized content.”
He compared the future of the social media company to Toutiao, a China-based news and information content platform.
“$TWTR has hit a level of relevancy as never before. With privacy concerns in its rear view & execution on all fronts -Citron expects new highs. Tgt price-$52,” Left said on Twitter this month.
“Toutiao: if you don’t know the name, read the story,” Left said.
The parent company of Toutiao is seeking $75 billion valuation round, according to Left, and he says in a report that this should raise the perceived value of Twitter.
Left explained that Toutiao’s “success has largely been attributed to the platform’s ability to deliver personalized content via a simple user interface, something Jack and his Twitter team has been very focused on.”
It was just in March that Left was pessimistic about the stock but he was also bullish on January. In March Left had said, “Citron short Twitter,” Left tweeted. “Near-Term target $25 Of all social media, they are most vulnerable to privacy regulation Wait until Senate finds out what Citron has published.”
In response at the time, Twitter had said, “To be clear – our data licensing business does not sell DMs. Any reports to the contrary are wrong.”
Twitter reported second quarter earnings at the end of July that revealed earnings per share of 17 cents, which was in line with estimates.
Revenue for the quarter was $711 million versus the $696.2 million expected, according to a Thomson Reuters consensus estimate.
Monthly active users (MAUs) was 335 million, coming in behind the 338.5 million expected, according to StreetAccount and FactSet estimate.
After the report, Twitter shares suffered their worst single day tumble since 2014, falling over 20%.
Looking ahead, Twitter also offered guidance that didn’t thrill Wall Street. The company is expected adjusted EBITDA between $215 million and $235 million for the third quarter. The company also expects stock based compensation expenses to be in a range of $300 million to $350 million for the full year. Previouly the range expected was $350 million to $450 million. Capital expenditures will be in a range of $450 million to $500 million, an increase from the previous forecast $375 million to $450 million.