TWTR Stock: Twitter, Inc. Has Fallen 55% Since April; Time to Bail?
Have Some Faith in Dorsey!
Twitter, Inc. (NYSE:TWTR) is closing in on its all-time lows and the market is pointing fingers to the company skipper, Jack Dorsey. Is it time to bail on TWTR stock? Definitely not.
Now, Dorsey has his feet stuck in two boats—Twitter and the recently IPO-ed payments processing company, Square, Inc. (NYSE:SQ), which is why he has been facing a lot of criticism. But before I turn to discussing Dorsey’s latest efforts, I must begin by explaining why I believe his dual CEO-ship shouldn’t be the reason to give up on him—or Twitter—just yet.
Indeed, running a multibillion-dollar company is not an easy feat and running two companies at the same time is an even tougher row to hoe. Yet, I can think of two great CEOs of this age who managed to pull it off just fine. One may not see Jack Dorsey on the same echelon as Steve Jobs and Elon Musk, but he’s certainly making an effort to work his way to that level.
After Dick Costolo’s departure, Dorsey was the best option the company could find. After all, having the founder as a CEO has its upsides. History is filled with examples of successful companies run by founders-turned-CEOs that have outdone non-founder CEOs.
Take, for instance, Facebook, Inc. (NASDAQ:FB), which dominates the social media space today. Under its founder, Mark Zuckerberg, as CEO, the company has grown from a small social networking web site to a full-blown Internet services company. But Zuckerberg was still inexperienced when his company first went public. He learned the tricks of the trade by surrounding himself with smart people from the industry.
Dorsey is currently serving only half of his day at Twitter, while the other half is being served at Square. Certainly, as an essentially part-time CEO, he’s relying more on his executive team than a full-time CEO would have to. Twitter’s current c-suite, which comprises of executives with prior backgrounds in the news and broadcasting industry or with technology companies like Google, is in no way incapable. But a fresh brain or two might just speed things up for the company. I believe a reshuffling in the c-suite could help bring Twitter back to the main stage.
The New “Promoted” Twitter
Twitter has long faced the problem of slipping user growth. The company’s monthly active user (MAU) numbers are appalling compared to rival Facebook’s. But currently, there are two new features that Dorsey has introduced to the platform that I’m very bullish about for the next year, though more specifically the next quarter: “Promoted Tweets” and “Promoted Moments.”
In order for the platform to keep generating money, the company had to effectively monetize its users. The problem, however, was that many visited the platform in the logged-out mode, thus reading and following the happenings on Twitter, but never logging in or registering. Hence, Twitter was unable to make money from these ghost visitors.
With Promoted Tweets, the company is, for the first time, reaching out to logged-out or unregistered users. Twitter has now found a way to make ad dollars on these users who will be receiving ads even in the logged-out mode or with no actual account.
Likewise, the company introduced a second feature in the latest quarter called Promoted Moments, under which Twitter is using video advertising to drive ad dollars on the platform. Video ads are a completely new feature on the platform. Facebook launched video ads earlier this year and Twitter has quickly caught up on the idea.
Dorsey has been, at the same time, tweaking some of the social media platform’s minor features to create a better overall experience for users. For instance, photos would previously appear cropped out and embedded in tweets. Now, photos appear popped-out in a more visually attractive layout. Likewise, the reverse-chronological order of the newsfeed is being replaced with a curated feed based on relevancy. The company is also planning to give up on the 140-character limit.
The Bottom Line on TWTR Stock
All of these efforts spell good news for the dying platform that was starting to lose its cool factor to the more hip social media platforms like Instagram and Snapchat. All of Jack Dorsey’s latest moves are very promising. By the end of the coming quarter, we’ll see a clearer picture, especially when the two latest features start bearing fruit.
The bottom line: I’m not giving up on TWTR stock.
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