“Preparing the final draft on the recent decline of Twitter stock #TradeJoker #Thirst4Fun and #HowBitterIsTwitter.” read my last tweet.

Friends, the point I am trying to make is that every startup business, hobby even a relationship or event is on social media but these platforms constantly need modification and innovation to keep their user base attracted and growing. The blue bird is an endangered species now and will become extinct if she doesn’t get to fly. 

In 2006, Jack Dorsey and Evan Williams laid an egg on a tree in San Francisco which later hatched into a little blue bird (not the Avatar humanoid species kind) and named their brain child Twitter. It was not a social networking site like Facebook, it was all about users putting real-time data feeds on the platform. In last ten years, its users have tweeted close to a billion real-time tweets about not just sports and entertainment but also about current affairs and natural calamities and most importantly aimed to spread awareness regarding several social causes. This uniqueness made Twitter grow its user base and attracted major brands to market their products and services. Tears in your eyes? Aww!!! but that is all I can say about Twitter and right now my Facebook status says Trade Joker is bored of ranting about Twitter.

Last week, a little birdy (pun not intended) told me that Marc Andreessen, along with the private equity group Silverlake, would be buying. Yes, the same party bought Skype from eBay and sold it to Microsoft, I was so excited that I tweeted about it, my followers retweeted about it and suddenly the stock shot up 6.5%. That is where Marc’s spokesman broke the grapevine and denied any such rumor. The stock fell down to its original price. Similarly, weeks before, News Corp was rumored to be in talks to buy Twitter which raised the stock value around 14% but only to come down again after the rumor was denied. 

By the end of 2015, Twitter Inc. was down by almost 57% from its yearly high of $53.41 and it extended to 71% last week. Analysts hate the stock and have downgraded the ratings to Sell from Hold. On February 10, Twitter Inc. will disclose the earnings for the fourth quarter. The sales guidance is expected to miss estimates which means #badnews #shortsell #seriously. 

#Problems #Dissapointments #Difficulties #WhyTwitterWhy 

  • Sluggish Growth- Twitter has 320 million users and the rate at which people sign up for Twitter accounts every year is freakishly low. This is because it is so confusing and a newcomer needs a motivational tour to understand the site.
  • Management Issues– 4 is the number of top level executives, who left the company. This calls for a depressing tweet. The senior executives including media chief Katie Starton and SVP of product Kevin Weil departed last week. “Good for you! Katie Kevin.” Now, it might be an ordinary departure in search of better opportunities but what do you think? #pessimism
  • Strategic Failure- Twitter fails to create strategies to survive among its best frenemies Facebook, Google etc. While Facebook and Google continue to research new ways of capturing market and attracting brands for advertisement, the blue bird is still singing in 140 or characters or less.
  • Not the Chosen One- Neville Longbottom, was always there standing next to Harry Potter and so has Louis Litt next to Harvey Specter but it is always going to be Harry and Harvey who will save the day because they are the “Chosen Ones”. The negative sentiment in the market has made Twitter a laughing stock.
  • Difficulty in Monetization- There is a class of Tweeters who have not signed up for an account on Twitter but still manage to check the content. Such people had no access to see promotional Tweets earlier but now they can. Twitter is now in an early phase to cash in on the non-users.
  • Losing Potential Clients- Twitter, because of their small advertising budget and stagnated growth in user base is losing clients because the reach of the advertisement is little as compared to Facebook, Google or Youtube.

#ControversialChanges #RIP #peoplehateit #WhyTwitterWhy

  • Algorithmic Timeline- Twitter is soon expected to come up with an algorithmic timeline. To make it easier for you to understand, basically, they are going to copy Facebook in terms of sorting out the posts on the timeline. According to Buzzfeed, the Twitter timeline will display tweets that users love and are popular, not on the basis of their current reverse chronological order. So, if you tweeted, “I don’t like this change in Twitter” 2 minutes ago then that may not be be the first post on your timeline, instead it will be from last year when you tweeted about Kim Kardashian’s butt and not what you just tweeted. Now if I would want two Facebook accounts, I would create it on Facebook and not on Twitter.
  • Breaking the code 140 – The essence of Twitter was the unique way to express your thoughts in 140 characters or less. Now that limit is planned to extend till 10,000 characters. Now, I don’t know how is that supposed to attract users but hashtags like #RIPtwitter is not what CEO and Co-Founder Jack Dorsey would be expecting.

#Comments from the Joker 

Twitter is available at a discounted price of $15.65 and when you see a stock falling from $70 to $17, it reminds you of Facebook Inc. which had to bear the hate of the investors before it finally structured its advertisements as a timeline and attracted a decent user base of 1.44 billion through multiple innovations. Twitter is sure cheaper than Linked In and Facebook but there is nothing in Twitter which can drive the stock upwards.

It might join Groupon and Zynga club if they don’t take any measures soon. Facebook is already on the verge of coming up with live streaming video on its timeline which was the one thing Snapchat and Twitter were good at.

Twitter was never a social networking site. It was introduced as a real-time public information network. It became a citizen journalist site. Not everyone hates Twitter. ISIS has been using it for a long time now to communicate every time they behead a journalist or attack them. However, Twitter shut down around 125,000 terrorist accounts in the last 2 days, FINALLY. But now Twitter is in the race of attracting brands for their promotions and it has stopped running which is bitter.

The last closing price of Twitter was $15.64 and analysts have maintained the lowest target of $14. The Q4 earnings will come out on Wednesday which will decide the fate of the blue bird. The sales guidance estimates given by Twitter are between $695 million to $710 million, well below the Wall Street expectation of $739.7 million.

Twitter is said to be in the talks of tie ups with Google (Alphabet Inc.) and also there are rumors of Facebook buying Twitter which is a familiar idea. Their top shareholders include Former CEO of Microsoft Steve Ballmer and Saudi Prince Alwaleed Bin Talal. I would mention that Carl Icahn has something to do here but that people have just started liking me and I wouldn’t jeopardize that. I hope Twitter takes this as an opportunity to innovate and open the cage so that the bird can fly to the new heights.

But some questions need answers…

Will Facebook finally crush Twitter?

Will Twitter beat the earning expectations?

Will ISIS sign up on Twitter again or calls for followers via Snapchat…Ahm Ok forget that!

There is only one way to find out… Follow the Trade Joker.

Sources and References: The Telegraph, Tech Trader Daily, CWRU Observer, Learnbonds, New Republic, CNN Money, Investor Place, Amigo Bulls, Investor’s Business Daily.
All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.

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