He upgraded the rating on Twitter from Sell to Hold, while maintaining a price target of $16. The company has had no major product upgrades to drive Monthly Active Users (MAU) higher in the near term, and its live strategy is unlikely to yield great results.
“We continue to believe the swift manner in which TWTR began shopping itself likely reflects the potential for more disappointing results,” Harper commented.
Since the downgrade on September 28, Twitter’s shares have lost 30 percent, Harper noted. He added that the upgrade now reflected the expectation that “the company will eventually push to get a sale done and investors will keep a floor in the value of the company given the expectation of a bid.”
The three companies that were considered as the most probably bidders, namely most closely considered bids - Alphabet Inc
“Barring a major deterioration in its user base, which we don't think is likely right now, Twitter should be able to entice others to take a look after it reports, but we believe potential acquirers will be constrained by the same issues as others were before,” Harper wrote.
|Oct 2016||Loop Capital||Upgrades||Sell||Hold|
|Oct 2016||Evercore ISI Group||Upgrades||Sell||Hold|
|Sep 2016||Loop Capital||Downgrades||Hold||Sell|
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