When Twitter went public in November at $26 many thought that the stock was overvalued but when, over the last few months, its price rose to a 52-week high of $74.73 then settled at around $65, few analysts were able to justify the price.
The problem was that the price just wasn't inline with any of the conventional measures of market value.
So, on Thursday, when the stock price plummeted to close at $50.05 per share, no one with any perspective was at all was surprised. The company's fourth quarter earnings (or lack thereof) report revealed that users weren't as active as hoped for and user growth was lackluster. In short, the opportunities for Twitter to capitalize on its user population has been dissipating and its prospects aren't looking too hot.
This may well be the beginning of the end for Twitter and, in due course, for Facebook. The giants of social networking may be on their way to becoming dinosaurs with, in the long term, only die-hard users picking and tweeting over the remains of their corpses.