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Twitter Inc saw its shares fall nearly 6% in yesterday’s trading session, after the critical board meeting did not offer much to boost shaken investor confidence.
Investors were hoping that yesterday’s meeting would result in some concrete plan for a sale or a turnaround. But it appears that management under the leadership of Jack Dorsey has refrained from arriving at a decision just yet and has instead bargained for some more time to “turn things around” so that it can stay independent.
The only update that the company revealed yesterday was regarding its direct messages, which will now have typing indicators, expanded previews for web links and most importantly read receipts. However, these developments are not exciting enough for investors as peers like Facebook and Apple (AAPL - Free Report) have been offering similar features for quite a while. Nonetheless, it does indicate that Twitter is contemplating rolling out a separate messaging app. However, there is no information available now to back these speculations.
The Background
It’s been quite a while that this micro-blogging platform has been struggling to revive growth. In the past one year, the company’s shares have lost over 32% of its value. Apart from a slowdown in user growth and advertising dollars, the most important concern for investors is that even after a decade of operations, Twitter hasn’t raked in profits.
Following the appointment of Dorsey as the CEO (less than a year ago), the company has already taken a number of initiatives to come out of the rut. As of now, the company appears to be cutting down its costs and trying to use its resources optimally. Last month, there were talks regarding the company’s plans to sublease a part of its San Francisco headquarters (nearly 30% of the office space) to alleviate some of its financial woes.
These aside, Twitter has been focusing on expanding its presence in the live streaming space. This is one of the top five priorities for the company this year as stated in the last quarterly earnings call. The other four focus areas include its core service, creators and influencers, safety and developers.
Though Dorsey and team are trying quite hard to get Twitter back on growth track, it seems that investors are losing patience.
Twitter currently has a Zacks Rank #3 (Hold). A better-ranked stock in the tech space is LinkedIn Corporation , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
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Twitter (TWTR) Shares Plunged 6% Yesterday: Here's Why
Twitter Inc saw its shares fall nearly 6% in yesterday’s trading session, after the critical board meeting did not offer much to boost shaken investor confidence.
Investors were hoping that yesterday’s meeting would result in some concrete plan for a sale or a turnaround. But it appears that management under the leadership of Jack Dorsey has refrained from arriving at a decision just yet and has instead bargained for some more time to “turn things around” so that it can stay independent.
The only update that the company revealed yesterday was regarding its direct messages, which will now have typing indicators, expanded previews for web links and most importantly read receipts. However, these developments are not exciting enough for investors as peers like Facebook and Apple (AAPL - Free Report) have been offering similar features for quite a while. Nonetheless, it does indicate that Twitter is contemplating rolling out a separate messaging app. However, there is no information available now to back these speculations.
The Background
It’s been quite a while that this micro-blogging platform has been struggling to revive growth. In the past one year, the company’s shares have lost over 32% of its value. Apart from a slowdown in user growth and advertising dollars, the most important concern for investors is that even after a decade of operations, Twitter hasn’t raked in profits.
Following the appointment of Dorsey as the CEO (less than a year ago), the company has already taken a number of initiatives to come out of the rut. As of now, the company appears to be cutting down its costs and trying to use its resources optimally. Last month, there were talks regarding the company’s plans to sublease a part of its San Francisco headquarters (nearly 30% of the office space) to alleviate some of its financial woes.
These aside, Twitter has been focusing on expanding its presence in the live streaming space. This is one of the top five priorities for the company this year as stated in the last quarterly earnings call. The other four focus areas include its core service, creators and influencers, safety and developers.
Though Dorsey and team are trying quite hard to get Twitter back on growth track, it seems that investors are losing patience.
TWITTER INC Price and Consensus
TWITTER INC Price and Consensus | TWITTER INC Quote
Zacks Rank
Twitter currently has a Zacks Rank #3 (Hold). A better-ranked stock in the tech space is LinkedIn Corporation , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>