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Why Twitter Stock Was Slammed Thursday

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

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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.

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