In the last three days, Twitter Inc. went ahead and deleted more than 70k accounts, which promoted QAnon conspiracy theories. This is another step after the company decided to delete Trump’s account a few days ago.
StockMarketRevolution went through Twitter’s Civic integrity policy to understand the company’s decision. We don’t really understand why the media was that surprised by the new measures. In January 2021, the company announced that it would delete accounts “interfering in elections or other civic processes.”
Source: Twitter
Source: Twitter
The Market Sold Shares – Will Investors Buy The Dip ?
In January, the share price declined from $54 to less than $48. The current market capitalization is $38 billion, with $7 billion in cash and $4 billion in debt. Net sales are expected to reach $5.1 billion in 2022, and EBITDA would be equal to $1.6 billion. Hence, the company trades at 7.4x 2022 sales and more than 20x 2022 EBITDA.
Investors are most likely buying shares of the company right now. 20x 2022 EBITDA appears a bit expensive. However, from 2021, the market expects the operating margin to increase from 2.3% to 9.6%. Twitter is expected to become a profitable company. Hence, we expect many value investors to review the company’s EBITDA expectations, which will most likely increase stock liquidity. With this in mind, perhaps the company represents an opportunity at the current valuation.
Disclosure: We Don’t Own Shares of Twitter
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