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When a firm that co-managed an initial public offering (IPO) cuts its rate on the stock that it recently backed, people notice. That is what happened Monday morning with shares of Twitter Inc. (NYSE: TWTR).

Morgan Stanley (NYSE: MS) has cut the stock’s rating to Underweight — the bank’s equivalent of a Sell rating. The downgrade was based on potential advertising placements among social media players. Both Facebook Inc. (NASDAQ: FB) and Google Inc.’s (NASDAQ: GOOG) YouTube are more likely to generate new ad sales than is Twitter, because both companies offer more choices in digital ad formats.

The Morgan Stanley analyst has a price target of $33 on Twitter stock, about 50% below Monday’s share price even after the drop. He also noted, “In our view, [Twitter’s] success is far from guaranteed at this early stage.”

Twitter’s IPO price was $26, and the stock closed at nearly $45 on its first day of trading in early November. The stock rose to nearly $75 a share in late December.

It is pretty hard to argue with Morgan Stanley’s analysis. Twitter’s user base is far smaller than either Facebook’s or YouTube’s. According to a report from IBM Digital Analytics Benchmark from last week, Facebook’s conversion rate from shopper to browser was very strong. Google’s Product Listing Ads also enjoyed strong support during the holiday shopping season.

Competing for advertising dollars against both Facebook and Google will continue to be an uphill slog for Twitter. The company has plenty of potential, but, as Morgan Stanley said, success at this point is far from guaranteed.

Twitter shares were down about 4.5% in mid-morning trading, at $66.12 in a post-IPO range of $38.80 to $74.73.