Monday, October 07, 2013

Should You Buy Twitter Stock?


On Thursday, Twitter announced plans to go public with a stock offering in the near future with the ticker symbol TWTR. Friday, a lot of people thought they'd get in early and bought shares of a stock whose ticker symbol is TWTRQ. Unfortunately, that's not Twitter -- it's Tweeter, a home entertainment retailer that filed for bankruptcy in 2007 and was nothing more than a penny stock. But because so many people bought it, Tweeter's stock value rocketed to 15¢/share before the exchange halted trading. True, those who got in early and sold at the peak made a 1,400% gain, but the vast majority -- who thought they were buying Twitter -- are left holding a big bag of nothing.

But the real question is whether you should want Twitter stock in the first place. On my America Weekend show, I asked Chris Hill (host of the The Motley Fool Money Radio Show) whether investors should try to get in on Twitter's IPO, whether its lack of profits should be a concern, and how it will fare compared to the stock of other online phenomena like Facebook, Zynga, and Groupon. Listen, then click here to subscribe to these podcasts via iTunes!