Twitter Inc. (NASDAQ:TWTR) teases with growth, but disappoints on earnings. It teases with TV, but turns out to still be text messaging. Twitter is what it is — a window into celebrity minds and very little else.
Investors are on to Twitter, and over time the gyrations of TWTR stock have slowly settled. It looks volatile in the short-term, a sharp rise after earnings in April, a hard fall after earnings in January.
But, look at the long-term chart going back to its 2013 IPO. Since its early 2014 high of $69 per share, Twitter stock formation is a ski-jump, slowly settling down and taking investor money with it. TWTR closed trade June 13 at $16.97, down 7 cents, and opened for trade June 14 at $17.04, up 8 cents.
When Twitter next reports earnings (July 26), it is expected to lose 12 cents per share on revenue of $588 million. Compare that with revenue of $601.96 million a year ago, then tell me why you like TWTR stock.
Lost in the News Cycle
What attracts reporters to Twitter is the same thing that is taking TWTR down. It is essentially a one-way medium. Trump tweets, as other celebrities tweet, and the rest of us react. We may respond, but our responses go largely unnoticed amid the masses of other users’ replies.
Stars can use Twitter, but you can’t become a star on Twitter. For mini-stars, attempts to grow their fame via TWTR sets off a negative feedback loop, and many report feeling better once they stop using it.
Twitter’s latest moves see it as accepting its fate. The service is placing news headlines across user timelines, cutting to the chase of its role as a news service. A new “Lite” version for the Philippines features instant updates on entertainment pushed to users on slow connections. I’m sure Mindanao really cares what Rihanna is up to.
InvestorPlace analysts are not impressed. Joseph Hargett looked at Twitter stock’s technicals recently and called it “head and shoulders below the rest,” while Ryan Fuhrman bemoaned the “painful waiting game” of investors who still believe in TWTR stock.