Twitter (TWTR - Free Report) is set to become part of S&P 500 on Jun 7.
Share price of the company rallied to a new 52-week high of $40.16, eventually closing a tad lower at $39.80 on Jun 5, following the news. Notably, shares of Twitter have gained 65.8% year to date, substantially outperforming the industry’s 15.5% rally.
Twitter’s strategy to diversify from a mere micro blogging site to a destination for video and live streaming seems to be working in its favor.
The social media platform recently announced reorganization of its business structure by folding the live video unit into its content partnership team that will make it “easier to put together future deals.”
Variety reported that with the move, the company is adopting a regional management structure instead of the earlier one, which was category (news, sports and live video) based.
Twitter’s Video Push
Twitter has been focusing on "live" to turn around its fortunes. Live streaming has resulted in an increase in user engagement. The company streamed 1,300 live events last quarter and secured 30 new live partnerships.
At the Digital Content Newfronts in New York, Twitter announced more than 30 renewed and new deals for live and original programming.
Walt Disney Co. (DIS - Free Report) will create Twitter-specific live sports, news and entertainment content from across its portfolio. Comcast Corp. (CMCSA - Free Report) networks including NBCUniversal will be sharing live video and clips from NBC News, MSNBC, CNBC and Telemundo.
Moreover, Viacom’s (VIAB - Free Report) Comedy Central, MTV and BET, Hearst Magazines Digital Media, Will Packer Media, BuzzFeed News, and sports leagues including Major League Baseball and Major League Soccer are also included in the deal.
Twitter’s fortunes are now tied to its video initiatives. In the last reported quarter, video ads accounted for the majority of total advertising revenues for the company. Strength in Video Website Cards, Video App Cards, In-Stream pre-roll and mid-roll ads continue to be the key growth drivers.
Moreover, video growth in Japan was attributed to surging international ad revenues, which is currently the key catalyst.
Twitter currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
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