TWTR vs. FB Stock – A Look Back at Wall Street’s Biggest Rivalry

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The rivalry between Facebook (FB) and Twitter (TWTR) is well on its way to becoming as storied as some of the sports world’s greatest showdowns. In fact, ever since both social media sites took to Wall Street, the competition — and speculation surrounding it — has only heated up more.

FB stock vs. TWTR stock
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That’s especially true during earnings season — the equivalent of a playoff stretch, save the fact that it comes four times a year.

Before we dive into recent quarterly results and their effect on FB and TWTR stock, though, let’s head back to the beginning and take a look at how we got here.

Facebook Stock Stumbles Onto the Market, Twitter Stock Soars

When it comes to hype surrounding their IPOs, Facebook and Twitter are on a pretty level playing field. Investors were eagerly awaiting each stock’s Wall Street debut, with the financial media’s endless chatter about each deal adding to the buzz.

For Facebook, though, that buzz wore off pretty darn quickly. In case you forget, FB stock went public at $38 per share in 2012, and a botched IPO helped sent those shares no where but down. As Tom Taulli summed it up:

“The deal immediately stumbled at the blocks thanks to a glitch heard ’round the world on behalf of the Nasdaq OMX Group (NDAQ). Morgan Stanley (MS) then got involved, unnaturally propping up the stock price to limit the damage … damage we later found out was partially thanks to MS, who apparently didn’t respect an equal flow of information to all investors.

The deal itself was the highest point for FB shares — in just four months, shares broke $18, less than half its initial price.”

For Twitter stock, it was a different story. Shares of TWTR were initially priced at $26 and shot up to $45.10 on the first day.

Site Updates and Buying Sprees

Since going public, both Facebook and Twitter have made tweaks to their sites — and both seems to be moving towards each other. FB recently added trending items and launched a newswire in an attempt to becomes a destination for news, much like Twitter. Meanwhile, Twitter redesigned its profile pages — and the new layout looks quite a bit like those on Facebook.

But even more than site updates, FB and TWTR stock investors have been tuned into acquisitions made by each company. And in this realm, Facebook has been blazing ahead — for better or worse.

This year alone, Facebook acquired ProtoGeo Oy, maker of a mobile app called Moves, along with Oculus and mobile messaging service WhatsApp. And the company hired five people from Ascenta, a company that makes solar-powered drones.

FB stock investors weren’t always so enthusiastic about CEO Mark Zuckerberg’s buying spree, though. And meanwhile, Twitter has only made one big buy since its Wall Street debut: The company bought social data provider Gnip — a move that sent shares of TWTR stock up 11% in one day. That was the biggest gain since the company’s IPO.

FB Earnings Blow Away TWTR

When it comes to recent quarterly earnings, though, Facebook won by a landslide. Shares of Twitter stock tumbled nearly 9% last Wednesday in the wake of earnings, sending shares to their lowest price since going public last year.

What had TWTR stock investors so spooked? Well, despite revenue nearly doubling year-over-year, user growth wasn’t so hot. Monthly active user growth ticked up just 6% for Twitter, while monthly active users fell 8% year-over-year. As Matt Egan of CNNMoney nicely summed it up, “Investors disregarded the stronger-than-expected results, choosing instead to look under the hood.”

Facebook earnings, on the other hand, were sizzling. The company generated $2.5 billion in revenue and adjusted earnings of 34 cents per share, beating analyst estimates of $2.36 billion in revenue and 24 cents per share in profits. Plus, the report showed that mobile ads are increasing in value for the company and actually generate almost 60% of Facebook’s total ad revenue.

Still, it’s not like Facebook won the earnings game by a landslide. Shares of FB stock only moved slightly higher after the report — but that’s certainly better than the nearly double-digit tumble for TWTR. Plus, shares of Facebook stock got a boost after the company announced new mobile-focused features at its F8 conference in San Francisco last week.

So despite the slow start with its botched IPO back in 2012 (and seemingly endless speculation that the social media site had lost its cool), Facebook stock is leading this showdown … for now.

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/05/fb-stock-twtr-stock-rivalry/.

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