If there’s any company on Wall Street’s hit list, it’s Twitter Inc (NYSE:TWTR). This is an organization that absolutely needs a positive break. With each passing day, however, that appears more and more unlikely for TWTR stock.
Whether you’re a technical trader or a fundamental investor, the stats on Twitter stock are undeniably horrid. The critical dilemma is that Twitter does not offer a useful platform unless you’re a celebrity, journalist or social media guru.
Unlike Facebook Inc (NASDAQ:FB), which is a platform for everybody, regular folks have no incentive to tweet into the void.
Still, Twitter stock has a contrarian argument. Those that use it, use it well. It’s widely integrated into popular culture and serves as an effective marketing tool for businesses. Most importantly, with TWTR stock down firmly into the “teens,” could a contrarian play work here?
Twitter’s Ubiquity Is Underrated
For all the criticisms dished out against Twitter — and I’m guilty as charged — we don’t appreciate just how important the company has become. To my knowledge, every news outlet has a Twitter account, allowing them to deliver content directly to their viewership. It’s the same for any institution of importance. In fact, it’s weird if an entity doesn’t have an account.
Because of its prevalence, it was only a matter of time before Twitter Inc would become the news. On Thursday, the social media company filed a federal suit against the U.S. Department of Homeland Security. The complaint alleges that Twitter Inc received an unlawful summons regarding information that would expose a vocal critic of President Trump.
Although the impacted parties are declining to comment, the suit comes at a time of heated debates over immigration. Due to the Trump administration’s crackdown on illegal aliens, the political vitriol has reached unprecedented levels. From some perspectives, Twitter is regarded as a hero for standing up to a “tyrannical” administration. That said, the impact to TWTR stock was actually negative, with shares falling 1% on the day.
The greater issue is that the lawsuit affirms the importance and relevance of Twitter, and by extension, TWTR stock. If nobody cared about TWTR, the Feds would not have filed a summons. Doing so would simply turn a candle into a forest fire.
In reality, we know that Twitter molds and shapes the young minds of the international community. It’s more powerful than a nuclear warhead. For better or for worse, that’s the reason why the Trump administration stepped in.