Twitter CEO Dick Costolo unexpectedly announced his departure about a year ago, handing over responsibility to current CEO and co-founder Jack Dorsey. Costolo’s exit and Dorsey’s entry was cheered by investors who were hoping that Dorsey’s return would help the company, its products and its stock, but this has not happened.
Nothing has improved so far
Since Costolo’s exit, Twitter has broadly remained the same: a company facing user growth issues, plagued by executive departures, and the inability on its part to explain the usefulness of its product to Wall Street. Since the announcement about Costolo’s exit, Twitter’s stock has dropped more than 60%, and its market cap, which stood at $23.5 billion on that day, is now below $10 billion.
Along with the present plight, things do not appear to get better for the micro-blogging firm. Presently, the company is without a head of consumer product and recently reported disappointing financial results. Also there is not much to boast about except for the NFL streaming deal this fall, says Re/code. Adding to this, Dorsey is still sort of running the company part-time. IShares of his other company, Square, have dropped by 30% since the company went public in November.
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Adding further to the wounds are the reports that Snapchat has surpassed the micro-blogging firm in daily usage, and Instagram is getting more advertisements than Twitter.
Twitter facing a sell-off?
Meanwhile, Twitter is again facing a big sell-off, indicates technical charts. On Friday, the stock closed marginally above the key support of $14. Considering the way bears have been gaining control of the stock, it won’t be surprising if the stock hits a new 52-week low in the coming time.
Market watchers are attaching a lot of importance to the $14 level. The stock has taken a u-turn several times this month after hovering around this level. For almost the entire month of May, the stock was around this level before making a bounce to $15, but the rally was short-lived after bears took control back again, bringing the shares back to $14. Therefore, any drop below this support level will open up the possibility of further downside in the stock.
On Friday, Twitter shares closed down 4.01% at $14.02. Year to date, the stock is down almost 37%, while in the last year, it is down almost 61%. The stock has a 52-week high of $38.82 and a 52-week low of $13.73.