Friday 14 November 2014

NDM 21

Twitter's debt assigned 'junk' status
http://www.bbc.co.uk/news/business-30048344
  • News of the rating sent New York listed Twitter shares tumbling nearly 6%.
  • Twitter reported a disappointing 7% fall in timeline views per user
  • Fourth-quarter revenue might fall short of market expectations of $448.8m
  • Twitter shares gave up most of the 7% gain made on Wednesday after the company announced it was considering creating additional mobile applications beyond its core messaging service and video app
US ratings agency Standard & Poor's has given the debt of social media giant Twitter the rating "junk". S&P said Twitter's $1.8bn (£1.1bn) September debt issue - IOUs sold to investors in return for interest - were worthy of a "speculative" rating of BB-, three notches below investment grade. News of the rating sent New York listed Twitter shares tumbling nearly 6%. The social network's push for acquisitions despite slow earnings growth was behind the low rating.
"The company is investing very aggressively in growth. Depending on the level of business reinvestment, Twitter may not generate positive discretionary cash flow until 2016," S&P said in a note.

In my opinion I think that Twitter is in decline. Just last weed they announced that it was opening an office in Hong Kong despite being banned from operating in mainland China to grow its advertising and sales reach. Strongly suggesting that financially they are not doing so well compared to their predecessors Facebook 

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