There doesn’t seem to be an end to Twitter Inc (NYSE:TWTR) stock’s downfall. After plunging more than 35% in 2015, Twitter stock is down another 24% year-to-date. Is it over for the once-hot social media company? Not really, but Twitter does have some serious issues to address.
TWTR Stock: Twitter Needs to Do This
As the company admitted last year, it really needs to figure out how to convey the value of Twitter to potential users. On that front, the company should take a look at its many products and features that are yet to realize their full potential.
For instance, Twitter’s Periscope is a great way to watch live broadcasts, but people who don’t use Twitter might not know what Periscope can do. Because of its live streaming nature, Periscope has the potential to be a mass market product. If Twitter can convey the value of Periscope to a broader audience, its user growth could pick up again.
Also, keep in mind that there are probably more content consumers than content creators. And while a lot of people use Twitter to express their views, many of us just use Twitter as a newsfeed. Almost all traditional media outlets have accounts on Twitter, and by being “live,” Twitter is a great platform to get all the news you need.
The “newsy” feel is probably the best selling point of Twitter. Not everyone has an opinion that they want to get out, but most people would still want to keep up with what’s happening around the world. If Twitter makes it clear why the platform is the best way to get a live feed of almost anything, more people would sign up.
The Bottom Line on TWTR Stock
While user growth remains an issue yet to be addressed, it’s not all doom and gloom at Twitter. For instance, monetization has improved quite a bit. In the fourth quarter of 2015, the total number of active advertisers on Twitter increased nearly 90% year-over-year to 130,000 and revenue surged 48% year-over-year to $710 million despite currency headwinds. (Source: “Twitter Q4 and Fiscal Year 2015 Shareholder Letter,” Shareholder.com, February 10, 2016.)
TWTR stock might look down and out right now, but its business is still sound. When more people realize the value of the site’s service, Twitter stock could become attractive again.