Can Jack Dorsey Save TWTR Stock?
The conventional wisdom holds that Twitter Inc (NYSE:TWTR) is locked in a death spiral. Scores of analysts are turning against the company, issuing a white flag of surrender to the bears who forced TWTR stock to its knees.
While this kind of pandemonium terrifies most people, I find it exhilarating. The fear and panic that grip the market can drive quality firms into the bargain bin, which is where savvy investors can pick them up at steep discounts.
Considering that Twitter is one of the most popular social media sites in the world, I don’t really understand why it attracts so much venom.
Think about it: when was the last time you heard of a service with 300 million users and counting described as a “failed product?” Twitter’s subscriber growth isn’t as strong as
Facebook Inc’s (NASDAQ:FB), but why must all social media companies have to be measured by the same stick?
In my mind, the only thing Twitter lacks is cohesiveness in its product lineup. Luckily, there’s a forgotten gem in the company’s portfolio that could be the silver bullet.
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The Upside for Twitter
So what’s Twitter’s secret weapon? I’ll give you a hint: it has 100 million users a month, is more popular than Tinder and Shazam, and is perfectly workable with Twitter’s existing platform? Still can’t see it?
I’m talking about Vine.
Vine allows users to take extremely short videos and share them with both friends and the public at large. It has remained a phenomenally popular service, with just as many users as Snapchat, yet analysts never factor it into Twitter’s valuation. (Source: “Vine is a sleeping giant (while everyone is focused on Snapchat),” Quartz, August 7, 2015.)
In the world of social media, Vine is to YouTube what Twitter is to Facebook.
What I mean is that Twitter forces its users to distill their thoughts into 140 characters (a limit that is no longer enforced, but is generally used as a rule for ideal length), while Facebook lets users type as much they want. The character limit was Twitter’s defining feature, a simple rule that yielded some of the funniest and most insightful comments on the Internet.
Likewise, Vine caps its video length in seconds, whereas YouTube users can have more than an hour.
Both Vine and Twitter have a constraint that forces people to adapt and innovate. I was skeptical at first, but after spending a few hours on Vine, I can tell you there is some genuine art out there. The platform even has its own celebrities.
The emergence of these “Vine stars” resembles the first generation of YouTube stars. Just to put that into perspective, three YouTube stars just interviewed President Obama at the White House. Such is the power of social media.
What’s my point? To put it bluntly, investors have been so focused on Twitter’s shortcomings that they’ve grown blind to its strengths. There is gold in this company.
TWTR Stock Forecast for 2016
I’m still enormously bullish on Twitter. The return of Jack Dorsey, the firm’s founder, was an incredibly hopeful turn, even if he is splitting his time between Twitter and Square Inc. No one quite knows a firm like its founder.
For me, Twitter simply has to weave its other products into the core service. Why isn’t Vine more synonymous with Twitter? If the brand was more visible and linked with Twitter’s 300 million subscribers, I could easily see a day when sports highlights and movie trailers and commercials all premiere on Vine.
As soon as those kinds of income streams are opened, TWTR stock could absolutely explode. Considering that the share price was $69.00 two years ago, it’s not a stretch to imagine a $50.00 price tag on Twitter stock in the near future.