I have just posted a YouTube video with a review of the quarterly results of Twitter for the second quarter (Q2) of fiscal 2020. In the video I briefly look at the sales history and the stock price history of the company. Then I take a close look at the change in retained earnings from January 2011 to December 2019. I then add up the operating income numbers and the other income and expense numbers for 2011 to 2019. I then reconcile the change in retained earnings with the cumulative income statement numbers and I see a $1.843 billion difference. It turns out that the $1.843 billion difference is due to a net “benefits from income tax” over the 2011-2019 period. I then review the 2020 Q2 results with an emphasis on the fact that $1.082 billion of the deferred tax asset was written off in the quarter. I then try to value the common stock using conventional methods, and after getting a weak result I talk about why these conventional valuation methods might not be relevant for social media companies.
This video should not be seen to be investment advice. Investment advice from stock analysts is available on Yahoo! finance.
For a link to the video click here.
