Tomahawk, WI 12/24/2013 (BasicsMedia) – Twitter Inc (NYSE:TWTR)’s stock is surging impressively and this is good for momentum investors. The stock breached $60 per share on Friday, attaining a new high in its ongoing price gain streak. Just this month alone, the stock is up more than 44 percent. The company now has a market cap of about $33.32 billion.

Amid this seemingly unstoppable Twitter Inc stock rise, analysts are issuing warning shots. They don’t the company worth it is priced and this is now making the picture complex for many investors.

Stoppage is coming

Like rain, Twitter Inc (NYSE:TWTR) is going to stop somewhere and where it stops, it could even start unwinding. This is why some analysts are not worried to price the stock at $30, which is just half of its Friday’s closing value.

The surge in the stock price is seen as a play of moment investors and like they do, they won’t last in the stock and this is what will hurt the stock. The point at which the stocks price is expected to correct is when the company releases its first earnings as a listed company and this is coming next year.

If Twitter Inc (NYSE:TWTR) reports in-line with the estimates, the stock could gap down. But if it manages to post above estimates, the stock could soar even further.

Factors in play

Besides the play of momentum traders, it can also been seen that the small number of the stock of Twitter Inc (NYSE:TWTR) in circulation is also raising the appetite of investors to hold it. When the company launched last month, it only made 70 million shares available to the public. This short supply is driving up demand and thus the stock price is continuing to rise.

Yet another factor of significant that has resulted in high stock prices for this social network company is its ad revenue potential. Most everyone who watches the market agrees that mobile ad is going to be the mainstream ad source of Internet companies like Twitter Inc.

So when Twitter Inc (NYSE:TWTR) acquired MoPub just when it was about to get listed on New York Stock Exchange, it was all clear that the management was making the right decision. And when that right decision was confirmed last week, it is easy to see why traders are betting high on the stock.

Perhaps in a sneak preview we can look at MoPub financial profile as issued by the parent company Twitter Inc (NYSE:TWTR). First, MoPub is a mobile ad selling up that can sell ads even off Twitter. The startup posted $2.7 million revenue in 2012 before it was acquired by the microblogging company.

This year, it brought in $6.5 million in the first two quarters of the fiscal. Then revenue gapped up to $5.6 million in the third quarter alone. However, up until now, only the company’s trajectory is pleasing because it is still a loss-making company. Its losses in 2012 were $8.1 million and $5.5 million in 2013.

So basically, Twitter Inc (NYSE:TWTR)’s is doing something to boost its ad revenue earning, more so on mobile platform and this is something that investors have loved in the company. However, the reality remains that the company has to boost its subscriber numbers and up its game in brand ad revenue. This is an area that it’s rival Facebook Inc (NASDAQ:FB) has now put its main focus.

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