Citi Thinks the $TWTR Takeover Rumors Are Utter Horseshit

Who wants to buy a company losing hundreds of millions per annum? Apparently no one, according to Mark May at citi.

Mark hates Twitter at these levels and wants you to know the company is worth, at best, $16.

Citi note on Twitter spec:

As a result of Friday’s move, we now believe that the risk-reward skews to the downside for TWTR. While we see some strategic rationale for certain companies to acquire Twitter, the company’s struggles and steep valuation make a deal at a meaningful premium – especially from here – less likely in our view. At the current price of ~$22.50, a potential $26 bid (source: CNBC, unsubstantiated) would represent ~15% upside, but should a bid not materialize we think the stock could retest the lows of late May (~40% downside) given the company’s stagnant user growth, deteriorating financials, and the likelihood of even further downside to consensus forecasts. That said, in the absence of a near term deal, TWTR is likely to continue to trade with some sort of M&A premium. All said, given the fundamental challenges and steep valuation and given the speculative and uncertain nature of M&A, we maintain our Neutral rating.

In other words, Jack Dorsey is a horrible CEO and can only redeem himself by tricking someone into buying his scam. In the event he fails, the downside from current levels are inexorably deleterious.