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Thu, Feb. 11, 2:49 PM
- Pac Crest and Topeka have downgraded Twitter (NYSE:TWTR) to neutral ratings after the company offered light Q1 sales guidance and reported flat Q/Q MAU growth to go with a Q4 EPS beat, and a long list of other firms have cut their targets. Shares have once more made new post-IPO lows.
- Pac Crest Evan Wilson calls the Q4 report the "end of the hope trade" related to Jack Dorsey's return, and is skeptical the five-point plan unveiled in Twitter's shareholder letter (.pdf) - it includes fixing confusing elements of Twitter's UI, increasing live video integration, connecting more with influential people/groups, and growing developer ties - will bring in new or lapsed users.
- Topeka's Blake Harper: "Our upgrade to a Buy rating in October was based on the thesis that product upgrades led by the new CEO could accelerate user growth and monetization but it appears it will take more time ... By focusing on live content the company is sticking to its core, which should please its power users but the ability to appeal to a broader audience is still undetermined."
- Oppenheimer also has its doubts: "Given current trends and competition for users, we have limited confidence in the platform's ability to re-accelerate MAUs over the next 12–18 months, pending a better understanding on planned product changes or actual monetization of logged-off users ... In our opinion, MAUs continue to decelerate as product updates are still in their infancy and competition is increasing around media aggregation,"
- SunTrust's Bob Peck (Buy) is a little more upbeat. "We think management articulated a cogent vision for the company that makes us cautiously optimistic. However, if the plan does not materialize in user growth we think there are 3 scenarios that help provide investor support: 1) Costs cuts to align with reduced growth trajectory; 2) ARPU growth alone can support near term expectations; 3) M&A math supports higher valuations."
- Monness Crespi's James Cakmak (Buy) observes Q4 ad data was healthy. Advertiser count rose by 16% Q/Q; ad engagements rose 153%, offsetting a 41% ad price drop (partly due to auto-play video ads), and progress was made in delivering better ad measurement tools to advertisers.
- Unlike Harper, Cakmak thinks emphasizing Twitter's live/real-time nature is a good thing. "If Twitter can reduce on-boarding friction, lower hurdles in how to engage, and get the appropriate messaging around the service, it’s worth giving the benefit of the doubt still, in our view."
- Twitter's Q4 results, guidance/details
Thu, Feb. 11, 9:13 AM
- Gainers: DDD +15%. AG +14%. FSM +13%. TRIP +12%. MUX +11%. AUY +11%. SBGL +11%. GFI +10%. AGI +10%. LC +10%. GG +10%. CDE +9%. EGO +9%. KGC +9%. HMY +9%. IAG +9%. EXPE +8%. ABX +8%. NEM +8%. SLW +8%. SSRI 8%. AU 7%. AEM 7%. HL 7%. NG 7%. CSCO 6%. SKX 5%.
- Losers: FLO -18%. INCY -15%. SFL -13%. MYL -13%. BTU -13%. ZNGA -13%. SNOW -11%. IFF -10%. ELMD -9%. AVP -8%. CS -7%. BCS -7%. SUNE -6%. CIG -5%. TWTR -6%.
Wed, Feb. 10, 4:30 PM
- Though Twitter (NYSE:TWTR) beat Q4 EPS estimates and posted in-line revenue, the company is guiding for Q1 revenue of $595M-$610M, below a $629.3M consensus.
- No full-year revenue guidance has been given. 2016 adjusted EBITDA margin is expected to be in a 25%-27% range vs. a reported 27% for 2015. Capex is expected to total $300M-$425M.
- Also: Q4 monthly active users (MAUs) totaled 320M, flat Q/Q, up 9% Y/Y, and below expectations. Excluding SMS Fast Follower users, MAUs fell by 2M Q/Q (while rising 6% Y/Y) to 305M.
- Twitter will stop including SMS Fast Follower users in its total MAU count in Q1. MAUs excluding SMS Fast Followers are said to have returned to Q3 levels this quarter; Twitter claims "positive impacts from our marketing initiatives" are boosting MAUs.
- Q4 top-line performance: Ad revenue rose 48% Y/Y to $710M, after having grown 60% in Q3. Data licensing/other revenue rose 48% to $70M, after growing 44% in Q3. U.S. revenue +47% to $463M; international revenue +51% to $247M. Mobile was 86% of ad revenue, the same as Q3. Forex had a 500 bps impact on ad revenue growth.
- Financials: Non-GAAP costs/expenses rose 52% Y/Y to $591M (surpassing revenue growth of 48%). On a GAAP basis, costs of revenue totaled $218M, R&D spend $210.1M, sales/marketing $277.2M, and G&A $72.4M. Twitter ended Q4 with $3.5B in cash and $1.5B in convertible debt.
- Metrics: Twitter asserts its total audience, which includes logged-out visitors, was above 800M in Q4. Direct messages (boosted by a character limit increase) rose 61% Y/Y, and (thanks to native autoplay video integration) video views rose 220x Y/Y. Active advertisers rose nearly 90% to 130K (still well below Facebook's 2M+). Mobile MAUs were 80% of total MAUs, even with Q3.
- Twitter's Q4 results, shareholder letter (.pdf)
- Update (4:45PM ET): The post has been updated to include additional details about Twitter's Q4. Shares are now down 4.1% after hours to $14.36.
- Update 2 (4:59PM ET): Mentioned in Twitter's shareholder letter: "We are going to fix the broken windows and confusing parts, like the .@name syntax and @reply rules, that we know inhibit usage and drive people away. We're going to improve the timeline to make sure you see the best Tweets, while preserving the timeliness we are known for ... We're going to improve onboarding flows to make sure you easily find both your contacts and your interests. We're going to make Tweeting faster while making Tweets more expressive with both text and visual media."
- Update 3 (5:34PM ET): Twitter is now down 1.1% after hours.
Wed, Feb. 10, 4:24 PM
Wed, Feb. 10, 9:22 AM
- Following recent reports to the effect, Twitter (NYSE:TWTR) has announced it's launching a Timeline feature that uses an algorithm to show noteworthy tweets that were written while a user wasn't logged in.
- The service appears at the top of a user's Timeline, acts as an expansion of Twitter's "While you were away..." feature, and (as expected) is strictly optional. Product manager Michell Haq: "We noticed across the board this caused users to create and interact more ... They can turn the experience off in settings, they can get curious and turn it back on.” A dozen or so tweets are displayed on average, and they're shown in reverse chronological order.
- Twitter: "The rest of the Tweets will be displayed right underneath, also in reverse chronological order, as always ... To check it out now, just go into the timeline section of your settings and choose 'Show me the best Tweets first' ... we'll be turning on the feature for you in coming weeks — look out for a notification in your timeline."
- The news comes ahead of this afternoon's Q4 report. It also shortly follows the launch of First View, an ad format (video-only for now) that appears at the top of user Timelines.
- TWTR +1.7% premarket to $14.64. Nasdaq futures are up 1.3%.
Tue, Feb. 9, 5:35 PM
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Sat, Feb. 6, 2:42 PM
- BuzzFeed reports Twitter (NYSE:TWTR) plans to launch an algorithmic (non-chronological) Timeline view as soon as next week.
- The site adds it's "unclear" if Twitter will force users to rely on an algorithmic feed - that, in turn, has led to considerable angst among some Twitter users. However, NBC News' Josh Sternberg reports the feed will be strictly opt-in. VC/Twitter investor Chris Sacca: "There is a 0% chance Twitter eliminates the chronological feed."
- Facebook's core news feed has long used an algorithmic view - it relies on data about user activity to order content based on what Facebook thinks a particular user wants to see. While many Twitter users find its chronological firehose invaluable for providing real-time news, commentary, and one-liners about what's going on in the world, many also feel overwhelmed by it (particularly given all the posts relaying the same story/event), and struggle to stay on top of news and commentary published while they were logged out.
- Twitter began testing an algorithmic feed about two months ago. The efforts follow a mixed reaction to Twitter's much-hyped Moments feature, and with user growth/engagement concerns continuing to weigh heavily on shares. Q4 results arrive on Wednesday.
- Yesterday: Twitter among Internet stocks hammered following LinkedIn's earnings
- Last month: Twitter building feature that supports much longer tweets
- Update: Jack Dorsey has responded to BuzzFeed's report and the ensuing backlash. "Regarding #RIPTwitter: I want you all to know we're always listening. We never planned to reorder timelines next week ... I *love* real-time. We love the live stream. It's us. And we're going to continue to refine it to make Twitter feel more, not less, live! ... Twitter can help make connections in real-time based on dynamic interests and topics, rather than a static social/friend graph. We get it."
Fri, Feb. 5, 12:43 PM
- On a day the Nasdaq is down 2.4%, Internet stocks are seeing outsized losses after LinkedIn (down 41.3%) issued weak Q1/2016 guidance with its Q4 beat.
- The professional social networking leader forecast its corporate hiring solutions business would see slower growth in 2016 (international macro issues were blamed). It also noted display ad sales fell by a high-30s % Y/Y in Q4 amid ongoing secular industry pressures, and reported just 7% Y/Y unique visitor member growth.
- Facebook (FB -5.5%), which soared last week after blowing away Q4 estimates on the back of 57% Y/Y ad revenue growth, is among the casualties. As is Amazon (AMZN -4.9%), which sold off last week after missing Q4 estimates and issuing in-line Q1 sales guidance, is also down sharply. As is Twitter (TWTR -5.3%), which reports in five days and continues trading near post-IPO lows amid growth/engagement concerns.
- Other decliners include Yelp (YELP -7.9%), TripAdvisor (TRIP -6.3%), Expedia (EXPE -6%), LendingClub (LC -8.3%), Wix.com (WIX -6.8%), Wayfair (W -7.6%), Groupon (GRPN -4.9%), Shopify (SHOP -6.3%), and Zillow (Z -6%), as well as ad tech firms Criteo (CRTO -8.9%) and TubeMogul (TUBE -7.6%). The aforementioned companies are generally expected to post Q4 results in the coming weeks.
- Earlier: Enterprise software and security stocks hammered after Tableau/LinkedIn's earnings
Tue, Feb. 2, 9:08 AM
- "Twitter (NYSE:TWTR) is a product that has never fully developed into a sustainable public company due to either poor strategy, poor execution, or that it was never destined to be one" writes Stifel's Scott Devitt, downgrading to Sell just 9 days after downgrading to Hold in response to the company's most recent executive departures.
- Like other Twitter skeptics, Devitt cites slowing user growth, weakening engagement, and tough competition from Facebook (reported 57% Y/Y Q4 ad sales growth last week) for social media ad dollars. He observes Facebook's time spent per U.S. MAU was an estimated 10.2x higher than Twitter's in Q4, up from 4.8x in Q2 2013.
- Devitt also estimates Twitter's MAUs (exc. SMS Fast Follower users) rose by only 4M Q/Q in Q4 to 311M, and thinks MAU growth could turn negative in 2016. "If Twitter is in the early stages of following a similar path to ex-growth as AOL and Yahoo! experienced before it, as seems to be the case, then there is likely more downside for TWTR common stock."
- Twitter has dropped to $17.05 premarket; Nasdaq futures are down 0.9%. Shares jumped yesterday following a report stating Mark Andreessen and Silver Lake have considered a Twitter deal of some kind, but pared their gains a bit after Fortune reported Silver Lake isn't interested in buying a stake.
Mon, Feb. 1, 2:30 PM
- "Silver Lake has no interest in acquiring even a slice of Twitter (TWTR +4.9%)," a source tells Fortune.
- Twitter, up over 11% at one point this morning, has pared its gains following Fortune's report. The Information previously reported Mark Andreessen and Silver Lake had "considered some sort of deal" involving Twitter, while qualifying its report by adding it doesn't know if "anything is active."
- Twitter remains just ~$2 above a Jan. 20 post-IPO low of $15.48. Q4 results arrive in nine days.
Mon, Feb. 1, 9:19 AM
Mon, Feb. 1, 8:37 AM
- The Information reports VC Mark Andreessen (co-founder of major VC firm Andreessen Horowitz) and P-E firm Silver Lake "have considered some sort of deal" involving Twitter (NYSE:TWTR). The site cautions it doesn't know if deal talks are currently active.
- One type of deal reportedly floated is a PIPE transaction, in which private investors would purchase newly-issued shares. The Information: "These deals are generally done when companies are desperate for cash, and public investors won’t give it to them, which doesn’t seem to be Twitter’s issue."
- The report came after shares closed on Friday 35% below their $26 2013 IPO price amid ongoing user growth/engagement concerns. Twitter has risen to $17.85 premarket.
- Update (11:22AM ET): Twitter is now up 9.9%.
- Update 2 (3:17PM ET): Fortune reports Silver Lake is uninterested in Twitter. Shares are now up 6%.
Tue, Jan. 26, 11:42 AM
- With Twitter's (TWTR -0.1%) market cap now near $11B and the company's major executive shakeup raising questions about its turnaround, Cantor's Youssef Squali thinks potential acquirers could start lining up.
- Squali: "With over 300M MAUs and a unique global offering of one-to-all broadcasting platform, we see a lot of value in TWTR for both technology and media companies alike ... There is no concentration of share ownership and no super-voting structure, with the top 3 shareholders owning 6.4%, 5.1%, and 5.0%, respectively." He sees Google, Facebook, Microsoft, Fox, Disney, Comcast, and Time Warner as potential bidders.
- Separately, GoPro (GPRO -1.9%) has announced its cameras will be able to stream footage in real-time via Twitter's Periscope livestreaming platform. The feature, which could be popular for sports broadcasting, is currently supported by Hero4 Black and Silver cameras (they feature built-in Wi-Fi/Bluetooth) connected to iPhones. It arrives shortly after Twitter began embedding Periscope broadcasts within its user Timelines.
- Yesterday: Twitter closes near $17 following departures
Mon, Jan. 25, 5:53 PM
- Twitter (NYSE:TWTR) fell 4.6% in regular trading to $17.02 following news its product, engineering, HR, and media chiefs are leaving. After the close, Reuters stated (citing a company spokesperson) product chief Kevin Weil won't be replaced.
- Meanwhile, CNBC reports commerce chief/ex-Ticketmaster CEO Nathan Hubbard will serve as interim media chief, and that Twitter will hold a Tuesday retreat to discuss the company's future. CEO Jack Dorsey previously indicated COO Adam Bain will assume responsibility for Twitter's "revenue-related product teams, the Media team, and the HR team on an interim basis," and that CTO Adam Messinger "will be taking over all of engineering and consumer product, design and research, user services, and Fabric into one group."
- Also of note: 1) Re/code reports American Express EVP Leslie Berland is set to be named Twitter's chief marketing officer; CFO Anthony Noto has been in charge of marketing since last spring. 2) The NYT reports one of the two board members Twitter plans to add is "a high-profile media personality."
- Many of the analyst reactions to the shakeup have been critical. Stifel's Scott Devitt, downgrading to Hold: "While we may not be the sharpest tools in the shed, we don’t see how the departure of the heads of three major business divisions can be viewed as a positive." SunTrust's Bob Peck observes 8 of the 13 execs who presented at Twitter's 2014 analyst day are now gone, with CEO Dick Costolo being the most notable departure.
- Evercore's Ken Sena: "With executive departures now seemingly fast and furious ... the likelihood of near-term growth re-acceleration appears less likely. Moreover, with traffic trends and agency checks continuing to point to the worst ... we are again taking the opportunity to lower estimates and our target price, this time to $19 (from $22) as competition not only for users but marketing dollars continues to heat up, notably with Instagram."
- Twitter's Q4 report arrives on the afternoon of Feb. 10.
Mon, Jan. 25, 5:55 AM
- In the wee hours of Sunday night, Twitter's (NYSE:TWTR) Chief Executive Jack Dorsey made it official: Several top-level executives are leaving.
- Engineering chief Alex Roetter, product head Kevin Weil, human-resources vice president Skip Schipper and media head Katie Stanton are all jumping ship, while two new board members will be appointed this week to help the company through its turnaround.
- Addressing what he called inaccurate press rumors, Dorsey praised the four executives and said he was sad to announce their departures.
- With shares of Twitter down around 55% in the past year (below the stock's IPO price), investors will be waiting to see if the major management shake-up will restore confidence.
- TWTR -5.9% premarket
- Previously: Coming soon at Twitter: massive executive upheaval (Jan. 24 2016)
Sun, Jan. 24, 3:12 PM
- Expected to leave Twitter (NYSE:TWTR) tomorrow...
- Alex Roetter, head of engineering.
- Katie Jacobs Stanton, head of media.
- Kevin Weil, product VP.
- The departures are for different reasons; some like Stanton’s are by choice. Others like Weil’s and Roetter’s are expected to be positioned by Twitter as not so voluntary.
- Jason Toff, head of Vine, may be leaving (update at 3:26 PM ET: this now appears to be confirmed too). And Jana Messerschmidt, bus-dev leader, has supposedly told Twitter she wants to leave too.
- Source: re/code
- Previously: Twitter soars on rumored News Corp. interest (Jan. 20)
- Related: Why I've Been Wrong On Twitter (Jan. 18)
- My Best Technology Pair Trade For 2016: Buy Facebook And Short Twitter (Dec. 31)
Twitter Inc is a platform for public self-expression and conversation in real time. It provides a way for people to stay informed about their interests, discover what is happening in their world and interact directly.
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