Twitter Inc (NYSE:TWTR) stock continues to make headlines as the market is finally coming to terms with the fact that there may not be a buyer after all for the troubled social media company.
A stagnant user base and lower revenues have limited the growth of Twitter. TWTR stock closed at $19.85 on Friday, which is way below its 52-week high of $31.87.
So, what is the way forward for Twitter stock?
There were reports in the media that the potential suitors may no longer bid for Twitter. The company’s high valuation is cited as one of the main reasons. In the event of no bids, Twitter continues to be an independent company, which means that it has to improve its current business model. The company has to find ways to attract more users and devise strategies to increase its revenues.
This does not seem to be such a bad thing if one does not compare Twitter with Facebook Inc (NASDAQ:FB) or other tech giants. The company has more than 300 million active users. Twitter’s recently launched video streaming service has attracted good number of viewers, and the company has been making efforts to turn itself around since Jack Dorsey joined as CEO last year. The National Football League (NFL) streaming has been attracting high viewership, and TWTR stock had gained earlier on the back of this.
There is no reason to believe that this cannot continue in the future. Twitter Inc’s live video streaming strategy holds great promise. Just last week, CW (Time Warner Inc (TWX :NYSE)) and Ford Motor Company (NYSE:F) had signed deals with Twitter that guaranteed ads on selected videos in CW Twitter accounts. Mike Park, the director of content partnerships and the “Twitter Amplify” program, had stated that video was their number-one ad product right now. (Source: “Twitter gets upfront advertising deal with CW and Ford,” CNBC, October 4, 2016.)
Despite its growth problems, Twitter is a unique platform, not only for live videos, but also for getting fast news from a wide variety of sources. If the company can make it more convenient for people to use the service, and it keeps on working to improve user engagement, Twitter has lot of room to grow, with a huge upside for TWTR stock.
As October 27 approaches, investors look forward to concrete plans to bring high growth back to Twitter. If management can announce a new CEO who could be devoted full-time to the company, it would be icing on the cake. These are the few ways to bring TWTR stock back from its downward spiral.