Fresh Concerns Take a Toll on Twitter Stock
Twitter Inc (NYSE:TWTR) stock is down about four percent in the current trading session. After gaining in the last few sessions, due to fresh buyout rumors, TWTR stock is going down and is trading around $17.00.
The company has changed the timing of its results announcement, which has raised fresh concerns in the minds of investors.
Speculations are rife that the social media company is planning to lay off hundreds of its employees. Reports came in yesterday that the company might slash its workforce by about eight percent, and that the announcement may come before the company releases its earnings report on Thursday. (Source: “Twitter Planning Hundreds More Job Cuts as Soon as This Week,” Bloomberg, October 25, 2016.)
Investors have not taken well to the news that Twitter has shifted its third-quarter results announcement to pre-market time, as they doubt the motives of this action. The company is expected to announce lower numbers for user growth and revenue, but the move signals that the situation might be worse. This uncertainty does not bode well for Twitter stock.
Most analysts maintain a “hold” rating on TWTR stock as they look forward to muted numbers for user growth and revenue for the quarter. Moreover, Twitter’s live streaming efforts are not likely to bear fruit for some time, and those efforts might not be able to improve results.
Now that all of the potential bidders are out of the scene and it has become clear that Twitter may not see a buyer for some time, the company has to chart an independent course. The only viable plan seems to be to develop into a media company with a focus on video. At a time when a telecom giant like AT&T Inc. (NYSE:T) is considering buying the premium content of Time Warner Inc (NYSE:TWX) to focus on the mobile video space, Twitter has to stay focused on the strength of its platform and exploring its video strategy.
The company’s partnerships for live sports and political events hold promise. Twitter has the advantage of being a real-time news and events platform, and it has to work toward building this strength. If the company can take this strategy forward, along with a change in management that can inspire confidence, TWTR stock is likely to turn around. Any news of renewed takeover interest would be icing on the cake.
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