Twitter’s growth is slow compared to that of Facebook, and to add to its problems, even Weibo has gotten bigger, according to Benzinga. Twitter’s stock plunged more than 10% last week after it reported another weak quarter in terms of earnings.
Weibo now bigger than Twitter
Twitter, held its IPO in 2013, has been facing stock-related woes and has remained one of the most polarizing investments among analysts. Investors hoped that President Donald Trump’s affinity for the platform would provide it a “Trump bump.” But the company has failed to capitalize on it, raising several questions regarding the value proposition it holds for investors, says Benzinga.
Ironically, a Twitter-like service in China called Weibo, popularly known as the “Chinese Twitter,” is performing exceptionally well. Weibo rallied on Monday, after which the company’s value rose to $11.39 billion. This even eclipsed Twitter’s market capitalization, which is currently at $10.73 billion.
Though Weibo’s current value is higher than that of Twitter, it lags the U.S. firm in annual revenue per monthly user, reflecting even more room for opportunity. In 2015, the Chinese service’s AAR was $1.90, which is far less than that of Twitter and Facebook at $6.50 and $11.30, respectively.
Twitter grappling with issues
Weibo, which is partly owned by Alibaba, is growing its subscriber base and its ability to “wring more cash out of them,” said the Financial Times. There is a unique purpose that each U.S.-based social network tends to serve. Despite that, Weibo has succeeded at merging elements of Twitter, which is banned in China, Instagram and YouTube, notes Benzinga.
Meanwhile, Twitter is facing a long list of issues, of which harassment is among the top. The company is struggling to deal with it, and it even lost some of its celebrity users due to it. On top of this, the company has not been able to find a buyer. Earlier, it was believed that Salesforce and Disney were interested in buying it, but even they weren’t interested.
Even now, Twitter is a significant player in the global social space, but the decline it is going through cannot be simply ignored. The company will have to do something to reverse the trend, or it might reach its end soon.
On Monday, Twitter shares closed up 1.48% at $15.81. Year to date, the stock is down more than 3%, while in the last six months, it is down more than 19%.
