Twitter: Hope In The New Executives

| About: Twitter, Inc. (TWTR)
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Summary

The founders that include the current CEO appear oblivious to the potential in live video based on their own tweets.

A couple of executives primarily focused on the shift of Anthony Noto to the COO position appear to get the massive opportunity in broadcast quality video.

Analyst estimates support growing engagement during Q4 despite the lack of promotion from the influential founders.

The founders of Twitter (NYSE:TWTR) seem to have a mindset that the social media giant best serves as a service for social injustice coverage and breaking news. The founders regularly discuss either selling the company or the latest social cause, but these leaders very rarely discuss the exploding opportunity in live streaming and professional broadcasts. After all, breaking news is a random event while professional broadcasts are repeat shows that drive return viewers.

The stock now trades around $18 after failing to hold onto the excitement of the potential buyout back in September. The hope for the stock is that the new executive leaders have the company on a path towards a future beyond just doing good for society similar to how Mark Zuckerberg runs Facebook (NASDAQ:FB).

The question is whether the founders that includes CEO Jack Dorsey will step out of the way.

New Executive Leaders Get It

While Jack Dorsey might be a visionary, he only appears to use Twitter and the owned apps for social injustice issues. His latest tweets focus on the protest at Standing Rock or artist spotlights. The only vague discussion of the business during December was a retweet and slight mention of the Yes team joining Twitter with Keith Coleman becoming the new VP of Product.

The insane part is that Jack had no mention of the huge Thursday Night Football results or the Rogue One stream. Both should be cases where a CEO with 4 million followers would promote the livestreams to the masses and later discuss the success.

Luckily, Twitter has a leader in the CFO/COO position that appears to get the business aspect and understand the service is suppose to work for shareholders. Anthony Noto appears the executive responsible for the livestreams deals from the record numbers on the BuzzFeed election show to the NFL deal that brings in millions of users most Thursday nights.

The new VP of Product adds to the mix of executives that potentially understand where the business needs to head. Mr. Coleman joined the Twitter service back in early 2007 and went over 7 years without tweeting. The new VP isn't exactly active on Twitter with only 158 tweets now, but the new executive clearly became interested in using the service due to election related livestreams back in October.

Maybe even more informative is that this executive only got one lonely like for this post about how amazing the live video was on Twitter. After all, the guy still has only slightly more than 2K followers now. Despite his background at Google, one has to wonder if a product guy that never really used the service until possibly starting employment negotiations with Twitter is the best candidate.

Booming Live Video

The most perplexing part is that the founders and prominent investors could use their own Twitter feeds to promote the booming livestreams, but most don't even bother. The company just completed two pivotal livestream events that nobody would know about following these guys.

In fact, co-founder Biz Stone spent last week promoting a live chat on ProductHunt instead of promoting the use of Periscope. Outside of the multiple tweets about his new work, he didn't tweet anything about the two major livestreams that will greatly shape user growth and the value of Twitter.

The first event was the #TNF game featuring the Dallas Cowboys. The second event featured the cast of the new Star Wars film in a Q&A.

The game featured a prominent NFL team with the best record in the league and didn't disappoint with a record audience for a Thursday. According to NBC, the Cowboys-Vikings game had a total reach on Twitter of 3.5 million for the pre-game coverage. The average audience for the game on Twitter properties was 310,000.

The total audience delivery topped 22.2 million viewers across all platforms with 21.8 million TV-only viewers. With over 300 million MAUs, Twitter only got around 1% of monthly users to view the game and somewhere around 1.5% of the total audience.

By all accounts, the NFL deal appears a success yet one hardly knows that Twitter streams sporting events viewing the accounts of the co-founders that includes the current CEO. Not to mention, the NFL season only has a few games left and no discussion exists amongst these thought leaders on how to expand viewers of the games.

The #RogueOne event got very limited mention as well despite Jack Dorsey being a board member for Disney (NYSE:DIS) that owns the rights to Star Wars. Dead silence when Jack should've promoted the event, quickly discussed the audience numbers and advocated for future events.

Both events outline the enormous potential of the service and highlight the issues with those generally in charge of the company. The recent shift of Anthony Noto to COO finally places somebody in an operations position that appears to understand the benefit of livestreaming. For whatever reason, he was the executive present at the BuzzFeed election show and not any of the prominent co-founders.

The new hire of Keith Coleman is an interesting move. The new executive has a history of product development from small apps at Yes Inc to Gmail at Google and showed some insight back in October that he understood the broadcast opportunity at Twitter.

The reason it matters is that Canaccord Genuity sees the live video deals adding 4.4 million MAUs this quarter to 321 million. Possibly more important, analyst Michael Graham forecasts that user engagement grew 5.3% sequentially due to mainly to existing users spending more time on the platform.

Takeaway

The key investor takeaway is that Twitter remains at a crossroads as a service and a stock. The social media giant has an enormous opportunity in live video, but the company faces a lot of competition.

The biggest problem with the service is that the co-founders that include the current CEO don't appear to embrace the opportunity in ad dollars from broadcast-quality videos whether via Twitter or Periscope. Despite these issues, analysts estimate the service is back in growth mode. One can only imagine if the executives with large social media platforms would actually promote the livestreams.

The success of Twitter appears highly dependent on Anthony Noto now in the COO position and potentially a product lead like Keith Coleman that has shown interest in the live video aspects of the service.

At a valuation of $13 billion, Twitter has tons of upside, but it won't get there when the CEO is tweeting about Native Americans at Standing Rock and not promoting the Cowboys from Dallas.

Disclosure: I am/we are long TWTR.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.