What is a fair value for Twitter's shares

Tom McKay

What is a fair value for Twitter's shares? Aswath Damodaran, a professor at New York University, has built a valuation model that assumes Twitter will scoop up around 5.5% of the online ad market by 2023, giving it revenues of $11.2 billion. His model also posits an operating margin of 25% for the company, which seems plausible given that of other internet firms that have grown fast. Based on his analysis, he reckons Twitter's shares are worth $17.84 each. Given the many uncertainties that still dog the company's business model, a price of around $18 a share seems reasonable. So based upon the new range of $23-$25 the shares are now starting to look very expensive. (VIEW LINK)


About this contributor

Tom McKay

Tom McKay

Managing Director and Co-Founder, Livewire

I'm the Managing Director and Co-Founder of Livewire. I'm passionate about collecting and curating the markets most informed insights every day so that our members can discover new investment ideas. If you would like to get in touch - please use...

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