An analyst at one of the banks underwriting Twitter’s high-profile initial public offering is reportedly warning investors that the social network could be mired in red ink through at least 2015 amid slowing revenue growth.
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It remains to be seen if the report will dampen enthusiasm for Twitter’s debut, which is easily the most highly anticipated IPO since Facebook (NASDAQ:FB) 18 months ago.
According to The Wall Street Journal, Bank of America Merrill Lynch (NYSE:BAC) Internet analyst Justin Post held a conference call Monday morning with investors to talk about Twitter.
While BofA sees Twitter’s revenue surging 98% to $628 million this year, that growth is expected to slow to 54% in 2014 and 31% the year after, the Journal reported.
Post also projected Twitter will suffer an adjusted net loss through 2015, though he sees the loss narrowing to $21 million from $56 million this year, the paper said.
BofA declined to comment on the report, citing a policy against commenting externally on individual companies.
While BofA Merrill Lynch sounds at least somewhat cautious on Twitter, a number of other analysts have expressed bullish opinions about the company.
On Monday, Pivotal Research Group initiated coverage of Twitter with a “buy” rating and an end-2014 price target of $29.
BofA is one of the underwriters on Twitter’s IPO along with Goldman Sachs (NYSE:GS), JPMorgan Chase (NYSE:JPM) and Deutsche Bank (NYSE:DB).
Last week, Twitter revealed plans to sell as many as 80.5 million shares priced at $17 to $20 a piece. Under those terms, the IPO would raise up to $1.6 billion and value the San Francisco-based company at as much as $11.1 billion.
Hoping to avoid the confusion that dominated the Facebook IPO on Nasdaq, the New York Stock Exchange confirmed on Monday it held a successful dry run of Twitter’s IPO over the weekend.
Twitter is expected to begin trading on the Big Board as early as November 7 under the ticker symbol “TWTR.”