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Twitter stock continues to slump after analysts raise questions

Not surprisingly, Twitter’s stock has started to drift back to earth after its explosive IPO debut. As we have written earlier, early analysts raised questions about the number of real active users on Twitter as well as its revenue potential. Well, it looks like the negative or lukewarm analyst reactions are still coming in. The most recent stock research/investment firm assessment of the popular San Francisco-based microblogging service has labeled the stock as a SELL. Not exactly a vote of confidence. What makes the report issued by Wunderlich Securities Inc is the reason given by its analyst, Blake Harper. He says the big issue he sees with Twitter is that its established base might be dampening any further growth in user base because Twitter tends to lean towards the existing base. He might not have said it but Harper doesn’t need to spell it out-Twitter is overrun by techies and hipsters. While this is great for first move advantage and tech evangelism, the whole ethic of ‘for us cool kids’ can leave many people out. Harper recommends that Twitter make its features more accessible to the rest of the population. He has a point, a ‘cool’ factor can only go so far. While the clunky and often arcane features of Twitter might make geeks and techies feel special, these features and interface might not appeal to many people in the general population. And this is what scares analysts. For Twitter to maintain its growth, it has to preach to the unconverted.

If Harper’s name sounds familiar, it is because he made quite a name for himself by correctly rating Yelp a buy, among other solid picks. The man knows what he is doing. Twitter didn’t just point out the negative aspects of Twitter in his report though. He sees hope in the fact that Twitter is increasingly viewed by most of its users on mobile devices. Since mobile will continue to grow in the foreseeable future-this is cause for hope indeed.

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