TL;DR: CNBC either doesn't know how to value companies, or is using a 50% discount rate. Either of these is concerning.

Disclosure: I'm using data from their 2015 Annual reports[0]

Valuing the stock requires at least 2 subjective metrics to be defined by the investor: The discount rate (similar to what return you could get on the next-best-investment) and the duration you think the firm will operate. This is because the value of the stock represents the present value of all future cash flows the entity will earn over its life.

On their balance sheet [1] they have about 6 bn worth of assets, 2 bn worth of liability and 4 bn worth of equity. They have enough cash and short term investments that if they wanted to, they could pay off all of their liabilities, and be left with property, intellectual assets and other tangible items of value, worth about $4bn. With about 715 million shares outstanding, the value of their company as a whole right now would be about $5.6 per share.[2] But, that's not the whole story - we need to figure out the discounted cash flows.

So first, how long do we expect twitter to last? Well, in their 2015 annual report they had a 143% increase in ad-engagement and a 41% decrease in the cost-per-ad. This tells us that they're getting more and more efficient, and at the very least, still in demand.[3] With about $2bn cash on hand, we can figure that they're in a position to buy out any early-stage competitors in the near future, so can we agree that they can last at least 5 years? Awesome, now which discount value should we use? Well if you're not investing in twitter, perhaps you could get 10% investing in other tech companies. But for the purposes of this example, let's say you're REALLY good, and can grab a 20% return on your investments.

So now we do a net present value calculation. Twitter has had ~2 bn worth of revenue per year. A 20% discount on $2bn every year for the next 5 years is about $6 bn. $6bn divided by 715 million shares = $8.37 per share, plus the $5.6 it's worth today gives us about $14 a share - still 40% more than what CNBC suggests, but a little less than what it's valued at today, although remember that this assumes an outrageous 20% discount rate. A more realistic return would be 10%, which would put us in that $16/share range.

So if anything, I would say Twitter is slightly undervalued. They're operating more efficiently than ever, and have taken huge steps towards making the necessary changes to bring about transformation change. They may fail, of course, but to say that the stock isn't even worth $10 is completely absurd (since to get $10 per share they'd have to use a 50% discount rate and only discount 3 years). At least if you invest in Twitter you can have a reasonable chance at getting your money back within the next few years. Their incredible liquidity and fair valuation is attractive, and the potential upside is not encapsulated in the share price as of now.

[0] viewproxy.com/twitter/2016/

[1] page 65 of Annual report

[2] ycharts.com/companies/TWTR/market_cap

[3] page 44 of Annual report