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TWTR: Why Twitter Stock Has Regained Ground

The COO of Twitter resigned last week, and TWTR stock climbed


W’e’re almost halfway through the year, and Twitter (TWTR) has taken it on the chin to say the least. TWTR stock started the year off at around $64 per share, but was battered down to the $30 area in May — not far off the IPO price of $26 per share and far below the first-day closing price of almost $45.

twitter stock twtrThat’s the bad news. The good news, for you optimistic folks out there, is that Twitter stock has at least made a mild recovery in recent weeks. In fact, TWTR has recovered 20% of its value in the last month alone, all while the S&P 500 has chugged to just 4% gains.

So why has Twitter stock climbe higher lately? Well, one catalyst has been that it shed some dead-weight, in the perspective of some investors. And it only seems fitting to let Twitter do the talking:


Yes, the company’s COO Ali Rowghani recently resigned. As Re/code noted, Rowghani had “been charged with goosing Twitter’s consumer offering and also attracting more users to its platform” … “but growth has been lackluster, as has product innovation.”

Twitter has no plans to replace Rowghani at the moment.

What Does It Mean for Twitter Stock?

While shares of TWTR stock jumped on the news, and have continued to tack on some gains in the meantime, the question remains whether the recovery trend will continue.

Ishfaque Faruk over at The Motley Foolfor one, thinks Twitter stock is now a buy — but he doesn’t point to the COO departure as the reason. Instead, he is bullish on margin expansion, altered expectations, revenue-per-user growth and international growth.

However, Dan Burrows of InvestorPlace isn’t so bullish on TWTR. Burrows noted that Twitter stock was being showered with upgrades … but only because it had fallen so far. Plus, he added that TWTR still faced long-term problems like, say … figuring out how to grow.

That problem does relate to the recent COO departure, which everyone from The New York Times to The Washington Post linked to the social media site’s inability to grow. But getting rid of someone who failed to promote growth is hardly the same as figuring out precisely how to succeed on that front.

And even the recent 20% improvement for Twitter stock still leaves shares an ugly 40% off their price at the start of the year.

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

Article printed from InvestorPlace Media,

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