Twitter Sinks After Citron Calls It 'The Harvey Weinstein Of Social Media'

Citron Research’s Andrew Left is known for his colorful language, and he didn’t pull any punches Thursday when he compared Twitter, Inc. TWTR to disgraced Hollywood producer Harvey Weinstein.

Toxic Investment

Left said a new report from human rights group Amnesty International demonstrates Twitter is an abusive environment for its female users, and a “toxic” stock for investors. Amnesty International found that women are subject to abusive language on Twitter every 30 seconds on average, a revelation Left says will force advertisers to take a second look at exposing their brands to the platform.

“Twitter has become the Harvey Weinstein of social media,” Left wrote in his latest report. “The hate on Twitter is real, and the company is not taking proper steps to curb the problem.”

The short seller said advertisers will soon be forced to take action if Twitter doesn’t find a way to censor its content, but any steps Twitter takes toward censorship would certainly negatively impact the platform’s traffic, engagement and user numbers. History has shown Twitter stock is extremely sensitive to changes in all of these key metrics.

Left put a new $20 price target on the stock.

Growing List Of Problems

At the same time Twitter is facing backlash from the left due to abuse of women and other minority groups, President Trump explicitly called out Twitter this week for what he says is “ridiculous” anti-conservative bias. In addition, Left says Twitter is facing an uncertain regulatory future as Washington cracks down on data protection.

Finally, Left said Twitter shares are valued at a much higher earnings multiple than its far-superior competitors Facebook, Inc. FB and Alphabet, Inc. GOOG GOOGL.

“At Facebook or Google valuation, TWTR would be trading at $15 to $18 – despite higher headline risk – while both Facebook and Google are growing faster,” Left wrote in the report.

Change Of Heart

Left’s latest commentary is a stark contrast to comments he made about Twitter back in August, when he said the stock could “hit $52 within 52 weeks.”

Twitter stock traded lower by 9.4 percent Thursday following the bearish commentary. Citron’s $20 price target suggests an additional 33 percent downside from current levels.

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