(This story first appeared on Seeking Alpha (SA) yesterday, and was written by Alessandro Pasetti, the founder of Hedging Beta.)
Summary
- Twitter confirmed it will cut its global workforce, but its long-term strategy remains unclear.
One big problem is that its adjusted operating cash flow isn’t growing fast enough quarter on quarter, so net losses could widen in 2015. - Even assuming a bull-case scenario its valuation remains unappealing based on its current strategy.
- If you plan to add volatility to your portfolio, you’d do well to buy shares of Twitter (NYSE:TWTR), but is the reward worth the risk at $30 a share?
Let’s delve into its latest statements.
Restructuring & Forecasts
Twitter said Tuesday that it plans to cut costs, adding that:
… in connection with the announcement of a restructuring (…), Twitter announced that it expects revenue and adjusted EBITDA for the third quarter of 2015 to be at or above the high end of the previously forecasted ranges of $545m to $560m and $110m to $115m, respectively.
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