Bad month for social media companies
December isn’t proving to be a good month for social media companies. Yesterday, the social media giant Facebook (FB) saw a selling spree ahead of the broader market sell-off (QQQ)(VTI). The stock settled with about 7.3% losses. Reports about Facebook giving access of its users’ personal data to large organizations such as Microsoft (MSFT), Amazon (AMZN), and Netflix (NFLX) hurt investor sentiment. Today, FB’s direct peer Twitter (TWTR) faces an even steeper drop. Let’s take a closer look.
At 1:00 PM ET, Twitter was down 12.6% from its previous day’s closing price. These losses were mainly due to a recent report by Amnesty International noting, “Twitter can be a toxic place for its female users.”
Following the allegations, Citron Research set a price target of $20 for Twitter stock, CNBC reported. The research firm, in a note, called Twitter “the Harvey Weinstein of social media” and mentioned that Twitter “will have to face hard questions from ad buyers who are concerned about social issues.”
It added, “Citron has been following Twitter for years and when we read the just-published piece from Amnesty International, we immediately knew the stock had become uninvestable, and advertisers will soon be forced to take a hard look at all sponsorships with Twitter.”
Citron’s Andrew Left is a well known short seller who recently surprised everyone by changing his negative tone on Tesla (TSLA) to positive. In November, Citron Research recommended a “buy” on NIO with a price target of $12.00. This price target reflected huge 53.1% upside potential from NIO’s Monday closing price of $7.84.