Investors apparently are beginning to lose faith in the company. Twitter investors should have seen it coming and finally it has happened. For the first time since 2013, Twitter stocks have fallen below their IPO price [$26]. The stocks decline began after Twitter released their second quarter earnings. Twitter's executives admitted that it was getting harder for the social media network to attract new users. So since Twitter won't be growing in the near future, expect their stocks to drop a little lower.
Yeah, the monetization just does not work. Obviously attracting new users is a big issue, but a bigger problem is just that advertisers are not finding value in advertising on twitter. Google Adwords and Facebook are MUCH better values. The rates Twitter gets now are just going to keep falling as more and more advertisers realize they are not getting a good return on their marketing investment, especially compared to Google Adwords.
Well, I have no investment in twitter, I think Facebook's stocks are dropping also. I think as other social media sites come along that are the "new thing" some of these older sites will go down the tubes. It is just my way of thinking. I may be wrong or right about this. It is all in the wait and see attitude that comes with any stock I think. It is just one of those things.
There are a few issues with management and strategy at the company but fundamentally social media stocks were the darlings of the market earlier in the year and now there's a bit of a wake up call. As soon as we go into a state of "growth scare", those sectors that have benefited from high but tenuous growth assumptions are the ones to get hurt. To me, it's a bit of a trading stock anyway.
I made a small fortune buying it ~ $30 after the lockup expired a while back - I sold it a few months later well above $50. I've made money via puts since then. I recently bought a little bit when it crashed hard again. Still have a put here, gonna see where the small long stock position goes (it's gone down so far).
One of the Fast Money traders at the end of Friday's show said he was taking a small position in Twitter again now that it is wandering around the IPO price once agsin. He's expecting a CEO announcement -- and a bump -- very shortly. May be time for some covered calls for those holding. We shall see. What annoys me is that Twitter is a unique dynamic instant news product, faster and more flexible and more portable than anything else on the 'net, and management keeps screwing the pooch. Messages and live video (Periscope) reach worldwide immediately. Everyone on the net knows what a Tweet is, even those who don't use it. And here it languishes... sigh. As an aside, yesterday someone with a smartphone in the Mobile stadium had Trump's rally on Periscope. Interesting look at the massive crowds from an audience perspective, rather than the AP broadcast feed carried on a number of web sites and YouTube.
Ali Baba is also back down to it´s IP price. I never had faith in AliBaba because it is never going to be able to compete with Amazon in the USA. Even with all that money the infrastructure it takes to build will never catch up to Amazon. I stayed away from Twitter... it just reeked of 1998 all over again. My Benjamin Graham mind will never allow me to invest in a company who hasn´t yet figured out how to monetize or create revenues or profits. Wall St is so fixiated on ´well, they are not growing eye balls at a fast enough rate´.. and failing to miss the bigger picture that their feeble attempt at monetizing their site is failing.
Along with unfavorable earnings there is also some uncertainty around leadership and direction the company will take as as it continues to search for a new CEO. The markets are fickle, it's barely a week later and the markets are back up again on the back of a favorable stock upgrade. I'm still quite interested to see where the stock prices of the likes of Twitter and Facebook might go in a couple of years. Many believed they wouldn't make it this far (I was one of those), but they're holding their own in spite of the issues around intrinsic values for these kinds of companies.
http://www.bidnessetc.com/51524-twitter-inc-twtr-why-the-stock-is-up-today/ Boh Peck at SunTrust upgraded the rating and target today, and there was a pop to > $27. Let's hope the CEO search moves along. I think it would be a mistake to put @jack in the position. An activist investor needs to stir the pot to get this unique product on the move. Giddyup.
Agree - I'd like to see Icahn or another hell raiser grab some shares and make them do something - find a way to make $, put themselves up for auction to others who can likely make it work, or whatever.
