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Why Twitter's share price doesn't make sense

It's hard to put a price on Twitter, but one thing is for sure: It's not worth what it's trading at, NYU professor Aswath Damodaran told CNBC's "Halftime Report" on Tuesday.

(Read more: Here's how much Internet stocks have soared )

"Looking at Twitter, everything that's been said so far basically reflects a pricing argument," said Damodaran, a finance professor at NYU's Stern School of Business. "If you are going to invest in Twitter, it's got to be as a trade. There can be no way that you can tell me from a valuation perspective that it's worth what it is trading for."

But it won't necessarily always be that way, he added.

"I would disagree with the statement that growth stocks can never be good investments, because I think there will be a point when Twitter will become a good investment," Damodaran said. "It might not be that far in the future.

"All you need is a couple of bad earnings reports and the same crowd that is in the stock now will be out as quick as can be," he said.

But Victor Anthony, an Internet analyst at Topeka Capital, said he still sees upside in the stock because it is creating value on its platform, which is just starting to monetize.

"Twitter is actually becoming more of a Web platform," Anthony said. "You see a strong ecosystem developing around Twitter with users, advertisers and platform partners. You have the television networks, you even have Comcast joining the fold."

He has a $54 price target and a buy rating on the stock.

(Read more: Comcast rolls out remote control accessed through Twitter )

"So strong network effects, a strong ecosystem developing around them—I think has the same kind of competitive moats that you would see from Facebook and Google ... longer term," Anthony said.

The problem, Damodaran said, is that Internet companies such as Facebook, Google and Twitter are relying on ad revenue. As more join the space, there will be less money in the ad pool to support them.

"I feel like Bill Murray in "Ground Hog Day" because a year and a half ago we were talking about another really interesting social media company with a big user base," he said. Now we are talking about Twitter. I wager in about six months we will be talking about Pinterest and Snapchat using exactly the same terms."

"Somebody has got to be adding up all these projected revenues and telling me where the online advertising market is going to be able to sustain all these companies at the same time," Damodaran said. There are going to be losers in this game. Everyone can't be a winner."

By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson.

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