Twitter Inc. (NYSE: TWTR) was last seen giving back at least a portion of Friday’s big share gains. The reason is not that the would-be buyout interest already has died, but from the equivalent of a “Sell” rating issued by Wall Street. Oppenheimer downgraded Twitter to Perform from Outperform and the firm assigned a $17 price target.

What investors need to consider here is what would make Twitter look better ahead to users and to the current or future owners. Should Twitter go with a technology company or should it become part of a media company (or group of media companies like AP)?

Oppenheimer’s downgrade follows an unluckily timed competing downgrade from RBC Capital Markets just hours before the buyout rumors broke on Friday morning.

The ultimate warning from Oppenheimer is that Twitter is or already was fully valued. Oppenheimer’s report showed the belief that Twitter is overvalued compared to its peers and is already discounting a take-out premium. The analysts also warned that any would-be acquirer would have to cash out employee options, and perhaps most importantly that any buyer would need to make large capital investments in an effort to improve the user experience and advertising technology.

Several other factors were cited on Monday’s downgrade outside of valuation. The team noted that engagement is rapidly decreasing and that Twitter actually had no real increase in engagement from the Olympics. Another serious issue mentioned was that social media and media competitors are making more investments in advertising technology. Mobile unique visitor growth is also said to be lagging behind peers like Snapchat and Pinterest.

Oppenheimer’s Jason Helfstein and team said in his team’s downgrade:

We are downgrading Twitter from Perform to Underperform following the 21% increase in the stock Friday on press reports Twitter was nearing a sale. Based on slowing user growth, poor product implementation/execution, decreasing user engagement, inferior advertising technology, platform safety issues, and strong competition, we are establishing a price target of $17, or 13x 2017 estimated EBITDA. We believe a media company is the most likely purchaser and would not pay meaningfully more than the valuation implied by our price target. Last, we see no meaningful increase in engagement from the Olympics or the NFL games, further diminishing the probability of a deal.

Oppenheimer’s valuation metric for the $17 target price is 13 times expected 2017 EBITDA. That does exclude a buyout premium, but the team believes that a media company is the most likely purchaser. It was also pointed out that a media company would not likely want to pay meaningfully more than the valuation implied in that $17.00 price target.

Twitter rose 21% to $22.62 on Friday, and it did that on a whopping 190 million shares. Twitter’s stock was indicated down about 2% at $22.14 on Monday morning’s premarket indications, and the stock was last seen down 3.2% at $21.90 in early afternoon trading.

Twitter has a consensus analyst price target of $16.34 and a 52-week range of $13.73 to $31.87.

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