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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.
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%.
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.
Wed, Jan. 20, 2:23 PM
Tue, Jan. 19, 3:39 PM
- Twitter (NYSE:TWTR) suffered an outage this morning - the company says the issue (blamed on an internal code change that has been reverted) has been resolved. However, no relief has arrived for Twitter's shares, which have tumbled to new post-IPO lows on a day the has seen many former tech high-flyers endure steep losses. The Nasdaq is down just 0.2%.
- Twitter's market cap is now at $11.4B, or less than 5% of Facebook's. Shares fell last Wednesday after the company was started at Neutral by Mizuho, and received a cautious Morgan Stanley note. MS reported its 3rd-party data indicated Twitter's app downloads fell 3% Y/Y in Q4 in spite of the Moments launch and a TV ad campaign, and that mobile time spent per user is still dropping by over 20% Y/Y.
- Q4 results are due on the afternoon of Feb. 10.
Wed, Jan. 13, 11:26 AM
- Believing the company has failed to communicate the value of its platform to a broader user base and has struggled with execution, Mizuho's Neil Doshi has launched coverage on Twitter (TWTR -2.7%) with a Neutral rating and $21 target.
- Twitter's shares, already under pressure in recent weeks, have slumped to new post-IPO lows. Shares are down 47% since the company announced last June Dick Costolo is stepping down as CEO, and 27% since Jack Dorsey was officially named permanent CEO in October. They trade for 4.2x a 2016 sales consensus of $3.12B.
- Separately, Twitter announced yesterday Periscope's livestreams will now be directly embedded within Timelines inside of Twitter's iOS app; Android and Web support will arrive in the future. The company adds Periscope has handled over 100M broadcasts since launching last March.
- Q4 results arrive on Feb. 10.
Dec. 10, 2015, 11:37 AM
- Beaten-down Twitter (NYSE:TWTR) is soaring on a day the Nasdaq is up just 0.4%. 15.9M shares have already been traded vs. a 3-month daily average of 20.6M.
- Possibly helping: Twitter has begun a test under which the company's mainstay Promoted Tweet ads are shown to its ~500M readers who aren't logged in or registered. Initially, the test ads will only appear on profile pages and individual tweet pages on PCs. However, advertisers will be able to control campaigns the same way they can when marketing to logged-in users.
- Though Twitter naturally has less data about logged-out users than logged-in users, adding them to its ad audience can significantly boost the number of consumers in a given demographic an advertiser can target - an area where Twitter (320M logged-in MAUs as of Q3) has badly lagged Facebook (1.55B MAUs as of Q3). A Twitter exec: "By letting marketers scale their campaigns and tap into the total Twitter audience, they will be able to speak to more people in new places using the same targeting, ad creative, and measurement tools."
- The test follows a deal with Google to include tweets within Google search results, thus expanding Twitter's reach with logged-out and non-registered users. It also follows efforts to sell Twitter ads against content on 3rd-party sites/apps such as Flipboard and Yahoo Japan, and the launch of the company's Audience Platform, which gives advertisers a common interface for buying ads on Twitter and 3rd-party apps that use its MoPub mobile ad platform (and often serve logged-out Twitter users).
- Short-covering could be helping Twitter rally today: 61.4M shares (11% of the float) were shorted as of Nov. 13, up from just 22.8M as of June 30.
Nov. 9, 2015, 12:45 PM
- Detwiler Fenton's Alex Arnold thinks ~50M U.S. monthly active users (MAUs) is close to a top, even as international MAUs and non-logged-in users present growth opportunities.
- Arnold also doubts Twitter's (NYSE:TWTR) Moments launch will significantly boost user growth, and observes relatively few advertisers have created "real-time" ad campaigns that leverage Twitter's status as a venue to follow and discuss breaking events.
- Worth noting: Twitter reported 66M U.S. MAUs for Q3. However, that figure was flat with Q2 and Q1, and up by only 2M from Q3 2014. Q3 international MAUs totaled 254M, up from 250M in Q2 and 224M in Q3 2014.
- Nonetheless, 65% of Twitter's Q3 revenue still came from the U.S., by far the world's biggest advertising market. U.S. revenue rose 54% Y/Y to $370M, and international revenue 65% to $199M.
- Twitter is among the bigger large-cap tech decliners amid a 1.2% Nasdaq decline.
Oct. 28, 2015, 1:09 PM
- Off more than 10% yesterday evening, Twitter (TWTR -1.6%) is now down just moderately after providing soft Q4 guidance to go with its Q3 beat. While numerous analysts have cut their targets, Stifel's Scott Devitt has provided a contrarian upgrade to Buy, expressing faith in Jack Dorsey's ability to right the ship.
- Devitt: "We have been long-time critics of Twitter, the strategy and the stock, until today ... As a founder, Jack has the freedom and vested interest to fix the product problem at this company. Our wish list: 1) make product easier to use, 2) offer better tools for curation, and 3) test / iterate core product extensions (e.g. Lists, Moments, Periscope, Vine). Twitter faces declining expectations and easing comps as it approaches 2016, which should be a perfect backdrop for a product-focused founder to look like a savior."
- Brean's Sarah Hindlian (Buy) thinks Q4 guidance could be conservative. "[We estimate] that Twitter’s guidance is embedding virtually NO benefits from Q4 ad or TellApart seasonality, or from the ramping DoubleClick partnership. As a result of our analysis, we feel highly convicted that guidance was sandbagged as Mr. Dorsey clears the decks. Given the generally positive tone on the conference call (best we have heard mgmt. in several quarters), focus on Moments, Auto-Play Video, and DoubleClick ramp in Q4’15, we continue to believe that it is too soon to give up on the stock.”
- By contrast, Morgan Stanley's Brian Nowak (Underweight rating) argues the guidance "reinforces our concern that Twitter will be unable to gain enough incremental share of ad budgets to deliver consensus expectations and support current valuation." Barclays' Anthony DiClemente (Neutral): "[A]s long as Twitter user growth remains stalled, it will be difficult for revenue to reaccelerate, muting the 3-5 year growth outlook."
- On the earnings call (transcript), CFO Anthony Noto stated ad load was roughly flat Q/Q in Q3 relative to Q2's sub-optimal level, even as ad revenue rose 13% Q/Q. He suggested auto-play video ad growth improved monetization. Noto also mentioned off-network ad sales were 13% of ad revenue, up from 8% in Q2, and talked up the potential of the DoubleClick deal to both improve ad measurement and reach advertisers buying only via DoubleClick.
- Separately, Twitter ran its first TV ad yesterday night (video) during Game 1 of the World Series. It focused on using Moments as a way to follow baseball events.
- Twitter's results/guidance, details
Oct. 28, 2015, 9:12 AM
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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