Shares of Twitter Inc. (NYSE:TWTR) have fluctuated ever since the company first became available for public trading in November of 2013. Shares were available at a mere $26 each back then, but now they're all the way up to $62. They had even hit a high value of $70 just a few days ago.
While Twitter is recognized as one of the most influential social media streams, it seems that a lack of investor confidence may be to blame for the company's roller coaster of stock prices.What's the Deal With Twitter's Stock?
Twitter has always been regarded by investors and users alike as a highly active platform for the rapid broadcasting of messages. Millions of users use Twitter each day on their mobile phones, computers, laptops and tablets.
The initial thought about Twitter is that it should be a gold mine. Revenue should be pouring in to Twitter's pockets from ads, just like it seems so forthcoming with Facebook.
The problem is that Twitter isn't Facebook. This is something that investors have just recently begun to realize over the past few weeks, which coincides with the dramatic drops in stock price that Twitter Inc. has experienced.Twitter's Ad Revenue
Investors began to express doubt in Twitter as soon as it became clear that Twitter's ad platform was nowhere near as effective as Facebook's own, especially not with the recent implementation of highly effective video advertisements on the Facebook ad network.
The seemingly unprofitable nature of Twitter's ad revenue service combined with the San Francisco's evident desire to spend money in bringing more users to the social messaging service resulted in investors feeling uneasy about the company's future.
Couple Twitter's likely drop into the red with the fact that there already exists fierce competition fro the same audience as with Google's YouTube and Facebook, and you'll see how investors pessimism only grew.
This led investors and investment firms to express bearish predictions about the company's future. Forecast values were as low as $20 at one point and as high as $70 at another.
There seems to be no other factors that have led Twitter's value to experience such changes save for this one.What Renewed Investor Confidence?
There's a distinct reason that, despite the recent pessimism about Twitter's future, the company remains predicted to double their total value by the fourth quarter of 2014.
Twitter reassured that their ad service could be effective for businesses, especially when trying to capitalize on live events. They cited specifically that live television was an ideal business that could work well with users on the website, which was due in no small part to the 70 percent of advertising revenue that comes from mobile users.
Further confidence was gained once investors realized that Twitter had begun making changes to engage users better, which includes making things like images and other interactive media more prominent to users.Twitter's Future
Twitter, like many other businesses in the technology sector, remains with an uncertain financial future. It seems as much as a small breeze could be enough to propel Twitter towards financial victory or ruin.
The opinion of investment firms reflects this. Some say that Twitter is a stock to buy after toughing out a bearish prediction, while others say that Twitter will fall flat in the near future.
No one, except perhaps Twitter's directors, know the direction that Twitter is headed.