While the sudden departure of multiple executives is concerning, the negative sentiment surrounding Twitter is out of hand considering the company's other fundamentals, said Scott Kessler, deputy global director of equity research at S&P Capital IQ and SNL. The 412 years calculation performed by CNBC is similar to the calculations used to evaluate Internet companies in the early 2000s. But it's meant to point out the company's strong capitalization and balance sheet, which Kessler said put the company in a stronger position than its stock value seems to indicate.
"I don't think at this point anyone is sitting around and wondering whether or not Twitter is going to be able to sustain its operations," said Kessler. "But they have an opportunity to use some of that cash to expand and enhance their assets and platform and features and functionality to make a more compelling company and offering."
Part of the blame for the negative sentiment is on the company itself, said Kessler. Twitter has encouraged analysts and investors to evaluate its success based on increasing monthly active users, and then failed to deliver much growth in that metric in recent quarters. Other metrics, like revenue growth, paint a more positive picture of the company. S&P Capital sees the company's advertising segment fueling revenue growth of 43 percent in 2016.
Twitter could improve public perception by developing more effective metrics and by showing investors how it plans to develop its product at the Feb. 10 earnings call. In the meantime, the company has become a much more appealing acquisition target for other companies and is likely selling below its true value, said Kessler.
"Unless there is a structural impediment to a rebound, when a stock declines like this it's offering the ability for someone to purchase it at a discount," he said.
CORRECTION: The 412 years calculation was made by CNBC, and other news outlets, not by analyst Scott Kessler.