He then exits in a few years with a large cash payout.

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twitter stock

Twitter is very complimentary to the Facebook, Instagram and WhatsApp business franchise. Either way it doesn’t impact my assessment of the Twitter investment opportunity. In terms of financial health, both Pinterest and Facebook utilize very low levels of debt in their business while both Twitter and Snapchat use approximately 50% debt. On a debt to EBITDA basis Facebook is in the best health but Pinterest is not far behind.

twitter stock

He then exits in a few years with a large cash payout. If the Twitter value increases then that’s a bonus for him. This is just a special purpose vehicle for converting paper wealth into cash. We have already established that both Facebook and Pinterest look like the better companies from an investment perspective. Now look at the sales multiple that they trade on. Twitter by comparison is trading at nearly 5x EV.

It should come as no surprise then that early investors have experienced a capital loss on investment over the past 10 years. Finally, I’ve included the forward earnings multiple and free cash flow multiple for the sake of completeness. The issue here is that heavy investment by Twitter and Pinterest depresses short term earnings as mentioned earlier, so these are not really very useful comparative indicators on this occasion. However, it is worthy of note that Facebook looks very reasonably priced on these metrics. I’m not concerned about the departure of Dorsey.

Twitter Blasts Elon Musks Claims For Backing Out Of $44 Billion Deal

This view is cemented by the fact that Musk has been making lots of noise about fake accounts and threatening to walk away, but the board of Twitter is holding https://dotbig.com/ him firmly to the terms of the deal. If Twitter is only able to match Facebook in terms of ARPU in the future, then that means revenue growth of 300%.

It focuses on the user interacting with complete strangers based on common interests and, more importantly, intelligence and information sharing. Fake news and political mayhem resulted in President Trump being banned from the platform. High-profile Wall Street banks like Goldman Sachs and Bank DotBig of America think the U.S. has a 35% to 50% chance of falling into a recession within the next two years. If those predictions come true, Twitter could experience a prolonged deterioration in its business. Twitter is fighting Elon Musk in court over his $54.20 per-share offer to buy the company.

twitter stock

Twitter is the most capital intensive company and, by my calculations, needs $145 worth of capital to generate $100 of sales. Snapchat and Facebook are at similar levels closer to $100 of capital per $100 of sales.

Elon Musks Response To Twitter Lawsuit To Be Made Public By Friday

Historical and current end-of-day data provided by FACTSET. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements. Shares of Twitter Inc. slipped 0.4% in premarket trading Friday, after Susquehanna analyst Shyam Patil indicated he could no longer be bullish on the social media company given all the distraction.

Data are provided ‘as is’ for informational purposes only and are not intended for trading purposes. Data may be intentionally delayed pursuant to supplier requirements. But then Apple https://www.insiderintelligence.com/insights/largest-banks-us-list/ announced iTunes would include its own podcasting platform built into the product. Odeo, and its 14 employees, scrambled to pivot the small company into something different.

  • It allows her to look at the vacation photographs of her old school friends.
  • From this perspective, Pinterest is arguably the better business .
  • Drawing on his experience programming software for taxicab dispatching, Dorsey pitched the idea of a realtime short messaging service to his coworkers Biz Stone and Evan Williams.
  • The first iteration of Twitter, which didn’t change until recently, made it challenging to sign up, to sign in and to get going.
  • Until he was banned, Donald Trump used Twitter as his primary means of communication to drive public relations.

One might argue that it serves as a distraction from spending time productively doing something else, and so it destroys productivity generally. On the revenue front, analysts expect Twitter’s 2022 full-year revenue to come in at $5.8 billion, followed by $6.9 billion in 2023. That’s about $600 million short of its $7.5 billion goal. In the face of falling twtr advertising demand and economic weakness, analysts’ estimates will likely only be revised lower in the coming months, placing Twitter’s target further out of reach. Also, when businesses feel consumer spending is likely to slow down, they tend to invest less money in marketing because their return on those dollars will inevitably be far lower than usual.

Does Elon Musk Consult Legal Team Before Tweeting? Does Someone Else Ever Post From His Account?

So if we add the non-advertising revenue to the opportunity that Twitter has to increase its targeted advertising as discussed above, this starts to look super interesting. As you know, market sentiment follows market narrative. The stock price has been a disaster and so the backwards-looking narrative https://dotbig.com/markets/stocks/TWTR/ is negative, as is sentiment. Twitter needs to dig itself out of this hole but the actions of Mr Dorsey only made it worse. Jack Dorsey’s sudden and unexpected resignation as CEO sent a shock wave through the market. Most CEOs give notice to leave and stay for an orderly handover to their successor.

Communication Services Stocks Whale Activity In Today’s Session

While many correctly speculated that the mercurial Tesla leader wouldn’t go through with his $44 billion play for the micro-messaging company, others clearly believed in it. That’s why the company’s share price spiked when news of the offer hit the headlines in late April. Dorsey would again become permanent CEO in September 2015, helping DotBig price slightly, but shares continued to slip throughout the next year due to falling user growth and revenue numbers. Its users come from all walks of life and all demographics. Twitter users are typically more affluent, higher income and higher educated people than Facebook users. Against that backdrop one would expect Twitter to generate a higher ARPU than Facebook, but it doesn’t. Facebook is generating more than three times the revenue per user.

If the actual number of active daily real users is lower than our assumptions then the ARPU per real user must be higher because our ARPU numbers are based on the number of users . We are assuming a 10% increase on ARPU and so it doesn’t matter what the starting point really is, a 10% uplift is a 10% uplift. twtr stock price It has the user base to expand in all of these areas and from which it is able to increase its ARPU from non-advertising revenue. To increase revenue per engagement requires using machine learning to better understand what users are looking for and to deliver timely, targeted, quality adverts.

New Buyback Tax Will Force Companies To Think Twice On How To Use Cash

The up/down ratio is calculated by dividing the value of uptick trades by the value of downtick trades. Net money flow is the value of uptick trades minus the value of downtick trades. Our calculations are based on comprehensive, delayed quotes. The IPO was the culmination of a successful five-year tenure as CEO for Costolo, who was at the helm the first time its shares took a hit on January 9, 2014. Three analyst downgrades after Twitter’s first earnings report sent the company into defense mode that day— a position they’ve been playing ever since.

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