A lot of people are rolling their eyes regarding the recent announcement by Goldman Sachs that it is recommending Twitter with a target price of 65 dollars. This is nothing new. Most investment banks roll out recommendations and stock buys to people who are following that particular investment bank. Most recommendations usually don’t get much fan fair. But since this is Twitter that we are talking about, it is getting a lot of attention. Why all the attention? Well, first of all, Twitter isn’t making any money. According to the latest statement from Twitter, it might be a few more quarters before Twitter is in the black. As a result, Twitter needs to live off the money that was raised when it became a public company. Another reason why this Goldman Sachs recommendation is making some heads turn in the tech industry is the small detail that Goldman Sachs was also the underwriter of Twitter. In other words, Goldman Sachs was one of the companies that helped sell Twitter stock, initially, as a public company. It’s a very interesting turn of events because Goldman Sachs has raised its target price by a huge margin. How huge? 41.3%.
Now, Goldman Sachs is saying that Twitter can hit 65 dollars. This is no small act. Whenever an investment bank issues guidance regarding stocks performance, usually a large number of people buying and selling stocks would pay attention and buy and sell based on that guidance. Since, if you need proof, just take a look at Twitter’s performance shortly after the announcement. After the Goldman Sachs guidance came out, Twitter shot up by as much as 4%. This is around 59 dollars. If things continue for Twitter, it can easily hit Goldman Sachs’ target price soon.