Twitter Inc (TWTR) has been a punchline for Wall Street in recent months, but it hasn’t always been a bad investment. We bet on Twitter in late 2014 and were able to pocket 19% profits by owning shares for just three months or so.
So far this year, though, Twitter stock lost even more than that. Shares are down more than 26% year-to-date and more than 67% over the last 12 months.
And the worst part? Those figures are factoring in the stock’s recent bounce. During the last five trading days, Twitter stock is up around 3% as the broader market has been flat.
Two main catalysts deserve the credit for this bullish sentiment: Talk of a MasterCard Inc (MA) agreement and an actual NFL deal.
Let’s take a closer look at each to see if they are substantial enough to really turn the tide for TWTR stock.
TWTR / MasterCard Partnership: Promising But Far-Off
At first glance, whether at the headlines or at Twitter’s stock movement, you might have thought that the social media company struck some kind of awesome deal with MasterCard.
Not exactly.
Instead, a MasterCard exec simply nodded to the potential during a CNBC interview at the Money 2020 fintech conference in Copenhagen earlier this week. He said: “We see companies like Facebook and Twitter occupying a really good space in social media and we are always over in Silicon Valley talking to those companies.”
And indeed, payments is a huge space — and still a growing space. But a one-day pop on the back of mere speculation really just sheds light on how things have gotten for Twitter stock. Investors are grasping at straws here; little potential is baked into the stock’s prospects, so any comes as a positive surprise.
NFL Partnership: Immediate, But Less Promising for Twitter Stock
Twitter did announce something that’s actually more immediate too: It acquired the digital streaming rights to 10 of the 16 NFL Thursday night games for the coming season.
But while NFL rights do have the potential to reinvigorate user growth in theory, this too seems like a long shot for the kind of substantial business rejuvenation that Twitter needs.
Morgan Stanley analyst Brian Nowak got right to the heart of why this isn’t too exciting. As he put it:
“The monetary attractiveness of these digital streaming rights is somewhat muted due to the fact that TWTR will not be able to sell any of the national advertising spots during the games (which are retained by CBS/NBC). As such, TWTR will only be able to sell the local affiliate ad spots…which make up roughly 2-3 minutes of advertising per hour.”
Nowak also added that streamers will not even be required to log into the service for the games. This, much like the MasterCard deal, leaves little concrete evidence of a turnaround.
Twitter stock needs some substantial momentum, but it’s going to take more than what we’ve seen this week.
Both headlines have potential, but the reaction really just speaks to how desperate things have gotten for TWTR stock.
Hilary Kramer is the editor of GameChangers, Breakout Stocks Under $10, High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.
