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by alexashka
4066 days ago
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Ok but from my understanding - you get to buy and sell stocks. So when twitter says that instead of earning say 300 million, they a bit less like 280, why is this a big problem? Did they expect the stock to be valued higher and because it has not lived up to that, they're selling it and buying a different stock that will do that? |
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twitter is currently valued at say $35 billion then long term to justify that valuation per what the stock market demands long term they need to consistently generate around 2 billion a year in profit. If they do really well and have say a 25% margin they'd need $8 billion a year in revenue to operate at that level. Current revenue projections are closer to 2 billion and are being scaled back by executives and they're not consistently profitable at all.
There's a big gap between where they need to be to support the current stock price and where they are (and seem to be heading in the near and mid term). That's why the stock is under a lot of negative pressure.