Can Live Video Save Twitter Stock (TWTR)?
Twitter Inc (NYSE:TWTR) is trying (once again) to kick-start enthusiasm for its flagship service, this time by adding 360-degree live video streaming. The addition of new bells and whistles is always welcome, but analysts are skeptical about whether the new features can help salvage the remains of Twitter stock (TWTR stock).
Twitter’s ability to make money is directly tied to its relationship with advertisers. If the company can get more eyeballs on more advertisements, revenue growth could pick up, which in turn could send TWTR stock up and to the right. Heck, Twitter might even make a profit some day.
But that’s a big “might.”
Getting more eyeballs on advertisements would imply that Twitter is growing its user base, something that the company has failed to do in recent years. Adding 360-degree video capability to its “Periscope” app could help invigorate some enthusiasm, but probably not enough to save Twitter stock from other headwinds.
For one thing, the new feature isn’t available to all content creators. Only a select group of augmented reality (AR) and virtual reality (VR) gurus will have access to the new gizmo.
Facebook Inc (NASDAQ:FB) is also trying to pair its 360-degree capabilities with live video. Twitter may have beaten it to market, however, there is no guarantee that being first will insulate TWTR stock. Facebook’s user base is five times bigger, not to mention that it has a more successful live video product.
But more to the point, Facebook has the resources and leverage to trounce Twitter in this market.
All it takes is a quick side-by-side analysis to understand why: Facebook makes billions of dollars in profit every year. Twitter burned through $102.9 million in the last three months. Facebook bought Instagram, which is now bigger than Twitter itself. By contrast, Twitter made a bunch of acquisitions that amounted to little more than nothing.
It’s no surprise that Facebook stock has tripled since its initial public offering (IPO) while TWTR stock collapsed by 61%. That is a direct reflection of how successful each company has been.
As a result, it’s difficult to imagine that Twitter stock can rebound off of a few fancy gimmicks. We doubt that this particular trigger could instigate a bullish run on TWTR stock.