Things look bad at Facebook, but they’re even worse at Twitter.
That’ s the bearish call from short seller Andrew Left of Citron Research, who sent Twitter shares tumbling more than 10 % on Tuesday as he raised fresh concerns about data-privacy problems.
In 2017, data licensing declared for $333 million of Twitter’s $2.4 billion in profit — representing an 18 % increment from the prior year, according to securities filings.
That means Twitter could be accessible to the headaches Facebook is getting after revelations that it spilled data on more than 50 million users to Cambridge Analytica, a firm that was linked to Trump’s 2016 presidential campaign.
“Everyone was punishing Facebook,” but “Twitter is going to be the most accessible because they break out how much they make on data,” Left told The Post in a Tuesday interview.
Left added that Twitter shares “five times as expensive as Facebook,” referring to twitter’s price-to-earnings ratio, and predicted that its stock will fall to $25.
Just two months ago, Left was long Twitter trusting it could be a buyout target — something he now sees as less likely.
Twitter shares recently fell as much as 11.4 % to $28.22.
Left, citing a two-month old Project Veritas report, insinuated on Tuesday that some of that data came from private messages shared on the platform — something Twitter firmly denied.
“Twitter is public by its nature. Public Tweets are viewable and searchable by anyone. This is the power of Twitter,” the company said in a tweeted statement on Tuesday.
“To be clear – our data licensing business does not sell private messages. Any reports to the contrary are wrong,” the company added.
Either way, Left noted previous comments from Twitter chief financial officer about data licensing being a “a really high margin business,” and estimates that 80 % of Twitter’s profits are derived from it.
Left’s bearish call comes after Senate Judiciary Chair Chuck Grassley (R-Iowa) on Monday called on the chief executives of Facebook, Twitter and Google to come before the Senate for a hearing on data privacy on April 10.
Facebook shares are dow 16 % since it emerged that data firm Cambridge Analytica improperly obtained data on roughly 50 million users.
Although Twitter shares dropped roughly in tandem with Facebook’s, short interest — which is a measure of negative market sentiment — is at an all time low, while Facebook’s is at a high, Left said.
“If somebody wanted to short Twitter and buy Facebook, it wouldn’t be a bad idea at these levels,” Left said.