Twitter Stock’s Fall Isn’t Over, Analysts Warn. How Much More It Could Tumble

Jul 12, 2022

Twitter Stock’s Fall Isn’t Over, Analysts Warn. How Much More It Could Tumble

Wall Street is trying to consider what will happen next and how much Twitter may be valued on its own now when Elon Musk has decided he would prefer not to buy it.

Despite falling 11.3 percent after the news broke on Monday, Twitter stock still appeared to be valued to account for the potential that a deal may yet be reached at a lower price. Analysts predict that Twitter stock might fall another 30% from here if there is no sale.

Attorneys for Musk stated in a letter made public in a late-Friday-afternoon SEC filing that he is canceling his $54.20-per-share agreement to purchase Twitter (TWTR), claiming that the company violated the terms of their agreement by withholding information about the use of fake accounts on the site. Twitter has stated that it would launch a lawsuit to compel Musk to finalize the transaction.

While much below the offer price on Monday, Twitter's closing share price of $32.65 was likely still substantially above the company's intrinsic worth. The majority of Wall Street analysts appear to believe that Twitter would trade in the $25 to $30 per share region if it were an independent business with no acquisition possibilities.

Remember that 2022 was a bad year for social media stock prices. Twitter's year-to-date fall of 23% is rather low when compared to Pinterest (PINS), Meta (META), and Snap (SNAP), which have all had significant declines of 49, 51, and 70 percent, respectively.

Snap, Pinterest, and Meta are all trading at record-low multiples of future Ebitda, or earnings before interest, taxes, depreciation, and amortization, according to MKM Partners analyst Rohit Kulkarni. He points out that while Twitter is currently trading at over 16 times, it peaked in March 2020 at 12 times and earlier fell to 9 times in April 2016. According to him, the shares would be in the $24 to $26 region if you applied a low-teens multiple of Ebitda to the company. The same conclusion is reached by other analysts.

On the Street, there are varying viewpoints on what will happen next, but they primarily fall into two groups.

A few analysts believe that the price of the deal will be renegotiated.

According to benchmark analyst Mark Zgutowicz, a transaction for $37 would be in the best interests of shareholders and constitute a "decent compromise." "We assume neither side wants a protracted legal dispute, and Twitter's board must take into account the potential damage that any new internal information revealed in litigation may have on its employee and shareholder base. We think Elon Musk eventually wants to manage Twitter, and we think a compromise is the best course of action for everyone.

The "most conceivable option," according to Mizuho analyst James Lee, would be to negotiate a contract at a lower price or a settlement that allows Musk to walk away, avoiding drawn-out legal proceedings.

Others believe Twitter will have to act independently.

The best-case scenario for both parties, according to CFRA analyst Angelo Zinino, would be a settlement or updated offer, but he also believes that Twitter would find it difficult to agree to a price cut that would please Musk.

He thinks that Twitter remaining independent is the most likely outcome. However, Zinino issued a warning that the firm will confront a challenging advertising market in the second half and into 2023. He also sees a possibility that the company may see a significant talent exodus as concerns about the company's future rise. With Musk formally pulling out of the deal, Zinino says, "we believe Twitter's commercial prospects and stock value are in a perilous position." We are concerned about the status of fake accounts and the company's strategic orientation as a stand-alone organization. We also see risks from an unstable advertising market and a weakened employee base.

According to Wedbush analyst Dan Ives, the situation is a "nightmare" for Twitter and will require an "Everest-like" climb up a mountain to overcome the many obstacles that lie ahead. These obstacles include employee attrition, advertising setbacks, and investor concerns about fake account issues.

According to JMP Securities analyst Andrew Boone, given the deteriorating macroeconomic environment and rising staff churn, Musk no longer wants to control Twitter. In a research note, Boone states that he "increasingly" believes that Twitter's future lies in its ability to maintain its independence.

There may be a lot of variations in the conclusions of this situation.

Though none have appeared thus far, and there are no clear purchasers, it is theoretically possible that another bidder may materialize given the stock's recent decline.

It's also conceivable that discussions fall through and end up in drawn-out litigation, in which Musk either prevails and cancels the agreement or loses and is forced to pay the whole amount. It's easy to see never-ending appeals that may go on for ages in any legal scenario.

Subscribe Our Newsletter

Not All Cryptos Are Scarce Like Bitcoin
Not All Cryptos Are Scarce Like Bitcoin

One of the most significant reasons why bitcoin continues to make national headlines is its scarcity. Bitcoin is regaining its reputation as "digital gold" as major advisers such as JPMorgan tout it as an inflation hedge as the US Treasury issues more fiat money.

Crypto
Oil Prices Rise on China Energy Demand Concerns
Oil Prices Rise on China Energy Demand Concerns

Oil prices increased on Tuesday as a global supply shortage of natural gas, power, and coal persisted, while dropping temperatures in China reignited concerns about the world's largest energy consumer's ability to fulfill domestic heating demand.

Stocks
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Constantine

How to Start a White Label Brokerage?
Did you ever wish to own your own trading platform, without the inconvenience of having to code or go through years of development? In today’s fast-paced global finance, starting your own white label brokerage firm is not only feasible — it’s more manageable than ever before. Thanks to white label brokerage solutions, you can plug […]

discover
Comparison of nasdaq and nyse

Otar

NASDAQ vs NYSE​: How Do They Differ?

Learn the key differences between NASDAQ vs NYSE. Explore their listing requirements, trading mechanisms, and ideal investor profiles.

Fintech
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Alexander

    What is a Fair Value Gap? A Guide to Trading Market Imbalances

    What is Fair Value Gap

    Vitaliy

    Triangle Patterns in Trading: Mastering Ascending, Descending & Symmetrical Strategies for Maximum Profit

    Triangle Patterns in Trading: Ascending, Descending & Symmetrical Guide

    Alexander

    What Is COTI? Payments, Token & Price Prediction

    What is a COTI coin

    Constantine

    Best Copy Trading Software in 2025

    Best Copy Trading Software in 2025

    Alex

    What Is an AI Agent? The Future of Finance Explained

    AI Agent Explained

    Constantine

    How to Start a Liquidity Provider Business?

    How to Start a Liquidity Provider Business

    Constantine

    How to Start a White Label Brokerage?

    How to start a white label brokerage

    Constantine

    How to Start a Multi-Asset Brokerage?

    How to Start a Multi-Asset Brokerage

    Hazem

    Crypto Ransomware – How They Happen and How to Avoid Them

    Crypto ransomware explained

    Constantine

    Best Web3 Browsers in 2025

    Best Web3 Browsers

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.