Twitter Inc (TWTR): Attention Turns To Earnings As Buyout Chatter Dies Down

Twitter Inc (TWTR): Attention Turns To Earnings As Buyout Chatter Dies Down
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Twitter Inc (TWTR) is set to release its next earnings report on Oct. 27, although all the noise lately has been focused on the possibility and the probability of a buyout occurring. Media outlets and analysts alike have been excitedly churning out lists of possible suitors amid the report that the company’s board wanted to have everything tidied up in time for earnings. Perhaps the board wanted to have a shiny proposal with a neat little bow tied on it to present to shareholders, but it doesn’t sound like that will happen.

So instead we’re left with the basics as analysts consider whether the micro-blogging platform will again report lackluster user growth or, even worse, a decline in the number of users.

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What’s next for Twitter Inc (TWTR)?

UBS analyst Eric Sheridan has a Buy rating and $22 price target on Twitter Inc (TWTR). He notes just how highly volatile Twitter shares have been, skyrocketing 34% in nine trading days and then plummeting 32% in the next seven trading days. On one hand, the company could continue going it alone, although he suggests that it should narrow its focus to live event/ broadcast/ real-time capabilities and re-focus its management team while cutting costs and divesting assets.

On the other, it could continue looking into strategic options, including everything from a strategic investor to a go-private deal.

Great risks with Twitter Inc (TWTR)

Pivotal Research analyst Brian Wieser also continues to rate Twitter Inc (TWTR) as a Buy but has adjusted his price target to $26 per share. He still sees it as holding “significant value, but at seemingly greater risk than before.” He hopes that the “wild ride” associated with the potential acquisition is now in the past but acknowledges that performing a turnaround might take longer than he had previously expected. Also he admits that his assumption that Twitter could expand its share of the global digital ad market might have been too optimistic.

However, he does see global growth as being in the company’s future, adding that he is “under the impression” that Twitter’s networks businesses are showing positive trends. He also likes the prospect of new premium video initiatives like the live-streaming deal for NFL Thursday night football games.

Indeed, it could be live-streaming that saves Twitter Inc (TWTR) in the end, but only if the company is able to pull this off flawlessly. A big trend that was observed in the past is the use of a second screen to tweet or use social media while watching TV, with sports events being one of the biggest attractions. As a result, it would make sense to bring live video to Twitter and integrate it with the tweets, but much more work needs to be done here before anything close to success can be suggested.

Twitter Inc (TWTR) upgraded to Hold at Loop Capital

Loop Capital analysts upgraded Twitter Inc (TWTR) stock to Hold from Sell in a report on Wednesday after spending less than a month with a Sell rating on the stock. They downgraded it because of the frenzy that sent the shares surging and upgraded it now because the stock has come back down to earth.

They do see the NFL live-streams as being positive, but they don’t believe the streams will change the trajectory of Twitter Inc (TWTR)’s monthly active user trends. The company did manage 3.1 million viewers for its Thursday Night Football pregame show and game on Oct. 13 for at least three seconds. The game had a reach of 2.7 million people, and the average audience size was 300,000 people, marking a 27% increase from the previous week. Loop Capital analysts term this “modest success” but believe most of the viewers were already Twitter users, meaning that the platform won’t get many new users out of it.

Twitter Inc (TWTR) shares edged upward by as much as 1.49% to $17.07 during regular trading hours on Wednesday.

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