The experts at S&P assigned a junk level to the Twitter service. The statement affected the company’s shares, which dropped 6%. Examining the public information, the agency officers gave Twitter a “BB-” corporate credit rating even without involving the corporate insiders. Though the company's stable outlook did not save from growth drop. It is interesting to note, that recently the company reported on the glowing prospects as a whole and earnings growth in particular.
After the Financial manager speech, the stock shot up 7%, but it did not last long. The S&P independent rating tamed the market insiders' temper, and gained percentages were lost again. However, the outlook still remains stable for the company. “The corporate credit rating incorporates our assumption of stable growth in revenues and monthly active users, possibility of positive discretionary cash flow in 2016, and ongoing minimal debt leverage. The stable outlook reflects our expectations that Twitter will grow and will not encounter a significant increase in competitive pressure,” the analyst of S&P Andy Liu wrote. The agency expects certain growth rate over the next 2 to 3 years. At the same time, the agency does not expect the company to return shareholder's activities such as share buybacks and dividends. For the rating growth the micro blog service should raise international expansion, launch new products and improve its profitability.