NEW YORK (AP) — Shares of Twitter fell in premarket trading Wednesday as another analyst cut his rating on the social media company due to its rising stock price.
Shares of Twitter surged 53 percent in December as investors disregarded a lukewarm welcome from Wall Street after an initial public offering last year. But 2014 has not been good to the stock, which has fallen more than 3 percent so far this year.
Like other analysts, Youssef Squali of Cantor Fitzgerald sees big things ahead for Twitter, but believes the December surge was unwarranted. "Twitter remains one of the few key plays on the social internet, but at the current stock price we prefer Facebook and Google," Squali wrote. He lowered his rating on Twitter to "Sell" from "Hold" Wednesday.
The analyst kept a $32 price target. On Monday Morgan Stanley's Scott Devitt cut the company's rating to "Underweight" from "Equal-Weight," saying that advertisers are more likely to spend their ad dollars on Twitter's larger rivals first. And on Dec. 27 Macquarie Capital's Ben Schachter cut his rating to "Underperform" from "Neutral" due to the major run-up in the stock.
Twitter Inc.'s went public in early November, with an initial public offering price of $26. The stock closed at $61.46 on Tuesday. A representative for Twitter could not be immediately reached for comment.
The shares dropped $2.01, or 3.3 percent, to $59.45 before the market opened Wednesday.