This Could Bring TWTR Stock Back from the Dead
Jack Dorsey is finally making good on his promise to turn around his brainchild, Twitter, Inc. (NYSE:TWTR). TWTR stock has been suffering tragically at the hands of short sellers, but a rebound might finally be in.
Twitter just recently made the move to monetize hundreds of thousands of its unregistered users. Last week, the company introduced “Promoted Tweets” for its platform in an attempt to increase its advertising base. (Source: “Twitter Widens Its Advertising Net, Tests Promoted Tweets With Logged-Out Users,” TechCrunch, December 10, 2015.)
Twitter receives a good number of traffic in unregistered or logged out users. Compared with its rival Facebook, Inc. (NASDAQ:FB), where visitors have to (read: are basically forced to) sign up or log in to view anything on the site. A Facebook visitor may view a landing page, but navigating through Facebook in the logged out mode is rather difficult, if not completely prevented. Facebook repeatedly prompts unregistered or logged out users to log in or sign up in order to browse through the pages, whereas Twitter does not restrict its visitors in the same way.
The result: many continue to visit the platform without ever registering for its services, making it difficult for the company to reach out to these logged out visitors. With Promoted Tweets, however, that problem will effectively be dealt with.
This feature will also spike advertisers’ interest in the platform, as advertisers will not only be reaching out to the standard “Twitterati,” but they will also be able to target Twitter’s ghost visitors—hence, there’s a wider target market. As of now, this new feature is only being rolled out on the desktop version of the web site, but it is expected to eventually be expanded to mobile, which accounts for the majority of Twitter’s traffic.
In a parallel move, under former CEO Dick Costolo’s leadership, Twitter partnered with Google to reach out to non-Twitter users, whereby the search engine integrates tweets in the first results page for a Google search. This way, Twitter is able to get more eyeballs on the brand name and, eventually, more clicks that convert into sign-ups.
Evidently, the latest move was long overdue. The microblogging social media web site had long faced the problem of sluggish user growth on its undermonetized platform. With a little more than 320 million monthly active users (MAUs), Twitter lags far behind rival Facebook, which boasts a whopping one-and-a-half billion users on its platform. However, Twitter’s current CEO is trying new things to bring the company back from the dead.
Separately, Jack Dorsey has been experimenting with a lot of new features that question the site’s fundamental model. The platform has recently started testing a reverse-chronological newsfeed. Prior to that, we saw the star-shaped “favorite” button be replaced with a heart-shaped “like” button. Rumor has it that the web site might be doing away with the 140-character limit, too, ultimately giving up on its microblogging platform.
The Bottom Line on TWTR Stock
Investors need to watch out for 2016, when the company starts bearing the fruit of all of Jack Dorsey’s latest efforts. To sum it all up, TWTR stock is trading close to its all-time lows and is certainly cheap when you factor in all the promising changes the platform is undergoing. Twitter stock is certainly worth a closer look at this time.