Is this the End for TWTR Stock?
There was a Steve Jobs-esque feeling in the air when Jack Dorsey returned to Twitter, Inc. (NYSE:TWTR). A wayward founder comes back to save his company from ruin? Are we talking about Twitter stock or Apple Inc. (NASDAQ:AAPL) stock? Jobs or Dorsey?
The story is eerily similar. In both cases, the founder is running another company when he gets the call. Jobs was running Pixar and Dorsey had Square Inc. Both decided to run two companies instead of giving one up. We know how Jobs was able to manage the task, but Dorsey has yet to live up to expectations.
Everything hinges on his performance.
Can he reenergize Twitter in the same way that Jobs reformed Apple? He’s often named Jobs as one of his role models, so I’m fairly certain he’ll try.
The expectations for Twitter stock are so low right now that it really wouldn’t take much for the share price to make huge gains. Users were in an uproar a few weeks ago. There were rumors that the social media platform was going to start prioritizing tweets based on an internal algorithm rather than showing them chronologically.
That kind of reaction did nothing to convince investors that Dorsey could bring in more subscribers. And really, that’s all they’re looking for. A sudden bump in subscriber growth (or the promise of a bump in subscriber growth) and investors could turn bullish.
But how can Twitter lure in more users? Oddly enough, the answer might come from Mark Zuckerberg. Yes, that Mark Zuckerberg. The CEO of Facebook, Inc. (NASDAQ:FB) was recently asked what he would do in Jack Dorsey’s position. After thinking about it for a second, he gave Twitter a little advice using Instagram as an example.
“Giving people tools to be able to share what they care about, and follow those things, I think it has contributed to a large degree in the growth of Instagram,” said Zuckerberg. “And I think it has historically to the growth of Twitter, too. And I think that there’s probably more that they can do there.”1
Instagram went from 20 million subscribers when Facebook acquired it to nearly 400 million today. It’s officially bigger than Twitter, so maybe Zuckerberg has a point.
He thinks Dorsey should focus on engagement. Luckily, that’s exactly what Dorsey is doing. He’s turned Periscope into a livestream channel so that Twitter celebrities can broadcast videos directly to their followers. He’s made it possible to share GIFs straight through the platform. These moves could work.
That being said, there’s no way to tell if Twitter can recover. I love using the service and Jack Dorsey is a proven winner, but there are things outside his control. Keeping to the sidelines might be the best play on TWTR stock right now.