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Market analysts warn of tech bubble burst after Twitter's IPO frenzy raised share price by 73%

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With the excessive frenzy around Twitter’s IPO debut, market analysts have reportedly warned of a tech bubble burst and telling investors that it was too rich

Shares of the microblogging site touched the 50 dollar mark, starting with 45.10 dollars on the first day of trading before closing to a little less than 44.90 dollar

According to the New York Post, Twitter’s valuation has been boosted to 31 billion dollars when factoring in options and other stock-based compensation, further intensifying the pressure on the company

However, former managing principal with private-equity firm Quadrangle Group, Steve Rattner has warned that Twitter opening at 45 dollars per share means 50 times revenues that could lead to a tech bubble

Doug Kass of hedge-fund shop Seabreeze Partners sent around an email message telling people ‘Time to Sell Twitter’ less than an hour into trading as he had set a price target of 45 dollars a share for Twitter just a few days before the IPO, but that was for over the course of 30 days, not one day

Another analyst from Pivotal Research Group, Brian Wieser downgraded Twitter to a ‘sell’ rating an hour after the stock kicked off trading at a price of 45.10 dollars

Wieser said that the only way to justify the 45 dollar price would be if Twitter could generate more than 6billion dollars in annual revenue by 2018

The microblogging site, haven’t seen profit in its six year long existence, posted revenue of 422 million dollars in the first nine months of this year, while last year it was just 316 million dollars

The report added that the company, trading under the NYSE, having a high share price is great for investors who were able to get in on the IPO, but most mom-and-pop investors usually have to wait until the stock actively trades hands to get in on the action. 

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