Microblogging site Twitter (NYSE: TWTR) has witnessed massive deactivations in user accounts just days after Tesla founder Elon Musk agreed to buy the company for $44 billion.
According to an NBC news report, the follower count of high-profile names like Barack Obama and Katy Perry has declined 300,000 and 200,000, respectively.
Although Twitter occasionally conducts programs to remove bots and fake accounts, the company has confirmed that the recent decline was organic.
Since the announcement of the takeover news by Elon Musk, users of the platform have been skeptical about Musk’s approach to freedom of speech.
Stock Rating
Recently, BMO Capital analyst Daniel Salmon assigned a Hold rating on the stock. The analyst, however, raised the price target to $54 from $40, which implies upside potential of 10.2% from current levels.
The analyst said, “We are raising our target price to $54 from $40 to reflect the accepted purchase price to take Twitter private.”
Consensus among analysts is a Hold based on three Buys, 26 Holds and two Sells. TWTR’s average price target of $50.80 implies upside potential of 3.6% from current levels. Shares have declined 10.2% over the past year.
Conclusion
With a polarising figure like Musk at the helm, mass deactivations can be a factor of concern for the company. However, the company’s strong brand value and existing user base can allow the company to weather the storm.
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