It has been an up and down time for Twitter Inc (TWTR) lately, and today’s stock market performance merely exemplified this. The social media site initially rallied 3 percent on city trading during the last 24 hours, but since then its stock returned to almost the same level, but again increasing slightly as trading continued.
Schafer Cullen Capital Q4 Letter: Value Stocks Could Be Set For A Recovery As Earnings Grow
Value stocks have outperformed growth investments in the last three months, setting a trend that could be present for the next few years, that's according to Jim Cullen, the Chairman, and CEO of Schafer Cullen Capital Management. Q4 2020 hedge fund letters, conferences and more According to Cullen's latest "Market Letter," a copy of which Read More
The up and down share price is indicative of the hopes of the social media company at present, with a disappointing revenue report reflecting negatively on the site’s future, but with the company also having plenty of positive indicators to reflect on.
The general feeling and sentiment towards the company’s stock price has been negative since the social media site released a quarterly report in early February which suggested that Twitter would struggle to grow in the future. On the back of this news, Twitter’s share price plummeted in the region of 15 percent, as city investors were skeptical about the ability of the social media site to show significant growth in the short-term.
Short-sellers hammering Twitter
In addition, a raft of city short-sellers have piled on the misery for Twitter since the revenue report, with many betting that the price of the company will fall further as its executive phalanx struggles to find a suitable growth strategy. At present, roughly 20% of Twitter Inc (NYSE:TWTR) share float is currently held by investors who expect its share price to drop in the near future, a much higher figure than for other social media companies. By comparison, a mere 2% of Facebook’s shares are held by short-sellers, while the number is 4% for LinkedIn Corp (NASDAQ:LNKD), 8% for Groupon Inc (NASDAQ:GRPN), 5% for Zynga Inc (NASDAQ:ZNGA) and 9% for Yelp Inc (NASDAQ:YELP).
This all sounds very grim for Twitter, but the news is not all negative.
The percentage is actually edging downwards in recent week as investor sentiment grows less harsh on the social media site. This may be a reflection of the fact that Twitter has simply been attacked too aggressively in the marketplace on the basis of one characteristic of the company’s revenue figures, or it may be based on deeper factors.
Twitter mobile potential
Twitter Inc (NYSE:TWTR) clearly has potential; I don’t think anyone can reasonably deny this. Although pretty much every social media site has struggled to monetarize its user base, the fact that Twitter is so well-known worldwide must give it more hope of beginning to make serious money than most. Additionally, the way that the site operates makes it perfect for mobile, a key growth area, and one that Facebook has exploited with particular zeal.
It is difficult to think of too many bigger household names than Twitter, and the daily news and worldwide media is constantly full of stories about the social media site. Additionally, the media, particularly television channels, love to engage with people via Twitter, and virtually every major public figure in the world uses the social media site and attracts hundreds of thousands if not millions of followers.
If Twitter Inc (NYSE:TWTR) can’t turn that into a money-making company then there is something very wrong indeed.