This Could Send Twitter Stock Soaring
Jack Dorsey is probably working massive hours in his dual role as head of both Twitter Inc (NYSE:TWTR) and Square Inc (NYSE:SQ). Unfortunately, so far, it’s failing. The shares of Twitter are caught in a downward spiral, sucking air as rivals such as Facebook Inc (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOG) dominate.
While Facebook stock traded at a record $120.79 per share on April 28 with a massive market cap of $346 billion, Twitter stock traded at a record low of $13.90 last Tuesday.
Look at the price chart comparing Facebook stock versus Twitter stock. Note the big divergence between Facebook and Twitter since the beginning of 2014. Since April 2015, Facebook has been stellar, while Twitter has steadily declined to a record low.
Chart courtesy of www.StockCharts.com
Facebook has easily dominated the expected face-off between Facebook and Twitter.
It’s a tale of two social stocks currently heading in opposite directions.
While Facebook has enough cash to easily swallow up Twitter, it doesn’t have to. Mark Zuckerberg can afford to play the wait-and-see game as Dorsey struggles for a Plan B or C.
Facebook is growing at a rapid pace and I doubt Twitter will ever challenge it in the social media space. Facebook has more than five times the eyeballs Twitter has and this gap will likely only grow bigger.
The battleground is the billions of dollars available in mobile advertising space, which is currently being dominated by Facebook and Alphabet.
Twitter Needs to Do This
For Twitter, Dorsey will need to differentiate itself from Facebook. He will not win the battle for the critical monthly average users.
What I think Twitter has to do is to move in a different direction, which the company appears to be pursuing.
The company’s $10.0-million deal to live-stream the NFL’s Thursday night football games was a good start. Since its deal, Jack Dorsey has suggested the company has received numerous calls from sports leagues around the world to perhaps broadcast their games via Twitter.
This move could be a viable strategy for Twitter to win eyeballs, advertising dollars, and worldwide recognition as a provider of live events.
Twitter could also broadcast theater performances, movies, and other live programming. This, I feel, is a way for Twitter to survive the next decade and establish its own destiny.