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Twitter Adds “Buy Now” Button—But Should Investors Want To?

|Includes:Twitter, Inc. (TWTR)

Twitter is getting fancy these days, adding a "Buy Now" button to users tweets, including products with a link to the Fancy shopping portal. Whether e-commerce is going to be an integral part of Twitter's future or if it's just an experiment, it's hard to say. But I've been quite impressed with Twitter since their precipitous drop a couple of months ago.

I like the move. Twitter is in need of more revenue streams, and shareholders expect to see more to come. At this point, users are already used to seeing ads, so the new button probably won't cause any major protests. The news gave Twitter a nice bump in the market, jumping quickly to $42.77 before settling at $42.05, a jump of 2.64%.

It's a far cry from the 52-week high of $74.73, but anyone who thought they deserved to be there is kidding himself. The correction was much needed and hopefully it leads to investors focusing on what makes Twitter valuable rather what doesn't make Twitter valuable (as in the fact that they aren't Facebook).

Dick Costolo also gave shareholders another positive signal when he announced this morning that he would be appointing Goldman Sachs' Anthony Noto as the company's new chief financial officer. Noto, who helped take the company public in November, knows a thing or two about Twitter, and is sure to offer some helpful guidance.

While I hope we don't see Twitter rising to the levels we saw it at in late December/early January, as this would surely mean it's back to being overvalued, I am confident in Twitter's long-term staying power. We've seen a 37.87% upside since the end of May and as long as we keep seeing positive growth in terms of MAUs and diverse revenue sources, Twitter could form into a solid long-term investment.

Disclosure: The author is long TWTR.

Stocks: TWTR