[coldcode]

Twitter is incapable of ever meeting the Price-Sales multiple of 20X+ until the stock drops closer to reality. The average stock is less than 2X. Apple is around 3X and has never in it's history been greater than 7X. What can Twitter do to multiply their sales by 5X? It's great they make some money but the stock price is unrealistic.

[erikpukinskis]

Apple is a bad comparison because the near-death-experience in the 90s combined with its contrarian attitude has put it in on a very short leash with Wall Street. I mean, aside from its years in the desert Apple has performed as well and as consistently as any tech company over long stretches. And yet it's P/E is consistently a third of Google's or Sony's.

And it literally won the war. They take the lions share of profits in the personal computer market and they have a huge moat. You could argue they will be in trouble when personal computing devices stop changing so quickly and are fully commodified, but I can't imagine that's within the next two decades. Honestly I find it weird their P/E isn't higher.

[snowwrestler]

Twitter is just now figuring out what business they are really in: content distribution. They thought they were a social network, but social networking is just how they source their talent and content.

Their homepage redesign, which just launched, is the first step toward what could be huge growth. Evaluation of the company will shift from active users to passive audience. Twitter ads can reach them both just fine, and there are way more passive watchers than tweeters.