×

Twitter needs 'adult supervision,' says NYU finance professor

With compressed life cycles, technology companies risk perishing just as fast as they rise. This makes deft managerial navigation even more critical than at, say, an infrastructure company, with a relatively longer life cycle.

Enter Twitter.

"Twitter is a poster child for a company in need of adult supervision and I don't believe that [CEO] Jack Dorsey can run one company effectively, let alone two," said Aswath Damodaran, finance professor at New York University Stern School of Business. Botching up their sale prospects, he says, is further evidence of Dorsey's inefficiencies as a leader.



Damodaran made one Twitter mistake of his own, though. He bought Twitter at $26 hoping for a turnaround with new management and Dorsey back in charge. But watching weaker performances across quarters burned his hopes and he sold the stock for a loss at $22.

It's the gap in price versus fundamentals that's to blame for Twitter's floundering sale attempts, according to Roger McNamee, co-founder of Elevation Partners. Investors mistakenly paired Facebook and Twitter when Twitter clearly doesn't belong in the same group.

"Buying Twitter will be dilutive to almost everyone who's looking to it," said McNamee, who can still imagine a deal done for vanity. Any price tag or more than $5 billion is a tough sell, he said.

Twitter's current market capitalization stands at around $12.8 billion.



The best hope for Twitter investors would be to have an ambitious CEO to buy it, said Damodaran. "And that's why I think Salesforce is a good match for Twitter," he said, referring to Salesforce Chief Executive Marc Benioff.

"As a stand-alone company Twitter is worth $18-$20," he said.