One indication of how little Twitter actually needs all the cash and short term investments it carries on it balance sheet is the figures the company uses to manage results and budgets:
Twitter’s outlook for the third quarter of 2015 is as follows:
• Revenue is projected to be in the range of $545 million to $560 million.
• Adjusted EBITDA is projected to be in the range of $110 million to $115 million.
• Stock-based compensation expense is projected to be in the range of $190 million to $200 million,
excluding the impact of equity awards that may be granted in connection with potential future
acquisitions.
Management only needs to be modestly frugal enough so that operations do not cause a drop in the case balance. If management cannot do that, it will confirm what Wall St. already believes which is that the executives running Twitter are entirely ineffective.
Twitter has a market cap of $19 billion, which has been halved since its shares were at their 52-week high. The return of $3 billion would not come close to making some of these investors whole, or even coming close to that, but distribution which would cut their losses.
ALSO READ: America’s Hottest Cities
Typically, case distributions are done by companies which have huge balances of excess cash. Twitter’s cash balance cannot be called “excess”, but reducing it can be called a way to press management toward profitability
Top Gaining Stocks
Top Losing Stocks