Why Citron Research Has Turned Around on Twitter



Making Twitter people’s preferred news destination

Notorious short-seller Citron Research has turned bullish on Twitter (TWTR) stock only a few months after claiming that the stock was primed for a decline due to the challenges it predicted for Twitter’s high-margin data licensing business.

In a post on its website earlier this month, Citron said that Twitter stock would soar because of the company’s focus on delivering a personalized experience for its users. Twitter said in June that it was rolling out a host of changes aimed at improving the experience for people looking to keep up to date with breaking news and other live events. In making these changes, the company spoke of the need to simplify the discoverability of content on its site.

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Citron set Twitter’s price target at $52

In its bearish March comment on Twitter, Citron claimed Twitter’s data licensing business was vulnerable to legislative action catalyzed by the Facebook (FB) privacy scandal involving a now-defunct British political consulting company. 

Citron says its earlier privacy concerns about Twitter’s data licensing business are now in the rearview. Citron has a $52 price target on Twitter stock.

Twitter reported revenue that surpassed expectations in the second quarter. Its revenue rose 24% year-over-year to $711 million, beating the consensus estimate of $696.2 million.

Citron bullish on Fitbit as well

Citron is also bullish on Fitbit (FIT), saying the stock could more than double in one year. Fitbit struck a cloud computing partnership with Alphabet’s (GOOGL) Google in April. Citron believes the partnership could result in Google acquiring Fitbit. Google is also Twitter’s cloud provider. Spotify (SPOT) also uses Google’s cloud to run some of its workloads. At one point, Twitter was thought to be a Google takeover target.


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