Please ensure Javascript is enabled for purposes of website accessibility

Why Twitter Stock Was Slammed Thursday

By Daniel Sparks - Dec 20, 2018 at 5:02PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Ouch! Twitter just fell more than 11%.

What happened

Shares of social-network Twitter (TWTR 6.35%) fell sharply Thursday, declining as much as 13.4%. By the time the market closed, shares were down more than 11%.

Though a broader market decline on Thursday undoubtedly played a role in the stock's pullback, another factor weighing on shares is Citron Research's decision to lower its price target for Twitter from $25 to $20.

A group of young people using their mobile devices and laptop computers.

Image source: Getty Images.

So what

Citing a study by Amnesty International, which found that more than 7% of tweets toward women were "problematic" or "abusive," Citron Research's Andrew Left said in a note published on Thursday that the social network has "become uninvestable and advertisers will soon be forced to take a hard look at all sponsorships with Twitter." Amnesty International's study highlighted a number of troubling statistics about abuse on the platform.

It's worth noting that Citron shorted Twitter stock in March, giving the stock a "near-term" price target of $25 at the time. 

Now what

While Citron has importantly drawn attention to a notable study from Amnesty International that's worth a closer look, investors should be sure to do their own due diligence on the stock.

Notably, Twitter has been taking action to mitigate abuse on its platform. Indeed, management said in its third-quarter update that the health of its platform is currently Twitter's No. 1 priority. "[T]hat's continued to be a big investment for us," said Twitter CFO Ned Segal in the company's third-quarter earnings call when discussing the company's efforts to improve the health and safety of the social network.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Twitter, Inc. Stock Quote
Twitter, Inc.
TWTR
$39.52 (6.35%) $2.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
344%
 
S&P 500 Returns
120%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.