Twitter’s survival in the coming days could depend on Donald Trump (or celebrities like him), says an analyst. According to James Cakmak, an analyst with Monness, Crespi & Hardt, the micro-blogging firm needs to think of its platform as a “media destination” instead of a social network.
Must benefit from celebrities
Twitter Chief Executive Jack Dorsey is making efforts to monetize the social media platform and make it easily understandable for new users. To attain such goals, apart from thinking of itself as a “media destination,” it should also recognize the value of public figures such as Trump, the analyst believes. Trump has nearly 6 million followers on Twitter. His tweets frequently become part of debates and political discourse, and therefore, the company needs to benefit from the momentum of this Republican presidential candidate.
“He has single-handedly kept Twitter in the news flow every single day. We contend Twitter should find a way to take advantage of this opportunity to serve as a new traffic vehicle,” Cakmak notes.
To increase its audience, Twitter will have to place itself in the middle of debates and other live events. Cakmak believes that engaging with public figures in an unfiltered way is one of the most valuable parts of Twitter, and Trump’s viral tweets underscore it.
Twitter can bring in an even wider audience by making use of other celebrities, for which it will need to allow greater incorporation of Twitter-owned platforms such as Vine, the analyst stated.
Twitter a Buy, but challenging
Overall, Cakmak said that the micro-blogging firm needs to move away from emphasizing on being a social platform and needs to improve the experience for logged-out users so that they are able to see top tweets just like on the homepage of a news site, and make tweeting secondary to consuming news on the platform.
Cakmak has a Buy rating on the stock and a $35 target price. According to Cakmak, this is the most “challenging” Buy rating he has ever covered because the company is surrounded by a lot of negativity.
“If Twitter can improve the product and deliver a more cohesive messaging of its utility, then the tides can turn,” the analyst said.
Owing to the ongoing struggle, the company’s stock has lost 37% in the past three months. But on Monday, the stock gained as much as 10% on news of a possible buyout.
