Twitter Inc (NYSE: TWTR)
Twitter has had an incredibly rough time in the market over the past several years. However, the rough times didn’t hit the stock so hard until 2015. Since then, we’ve seen incredible declines on TWTR for some time now, bringing the stock down to well below $20 per share. As a result, I’ve received several emails asking for my opinion with regard to whether or not it’s time to start investing in the stock. In my opinion, the answer is no, but there is a point at which I would invest. Today, we’ll talk about why Twitter is struggling, what it would take to see it turn around, and when I personally would invest.
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Why TWTR Is Having Such A Rough Time
Twitter’s big problem surrounds user data. For quite some time now, the company hasn’t been able to drive in new users and maintain them as active users of the social network. While this has been a problem for some time, it didn’t reach the extreme point it is at now until late 2014, when investors started to call for the resignation of then CEO, Dick Costolo.
Eventually, investors got what they wanted. In the beginning of 2015, Dick Costolo announced that he had made the decision to resign for TWTR. When Costolo resigned, Jack Dorsey stepped up and took the interim CEO position while the company searched for someone that would be willing to and capable of filling Costolo’s shoes. Unfortunately, TWTR had a rough time doing that. As a result, in the second half of 2015, it was announced that Jack Dorsey would be taking on the role of long-term CEO.
What Has Jack Dorsey Done?
When investors pushed to get Jack Dorsey in as the CEO of Twitter, they expected that he would make big changes that would make users more apt to taking advantage of the social network. Unfortunately, that’s not exactly what happened. In fact, since Dorsey took on the position as the long term CEO at TWTR, we’ve seen daily active users start to go backwards. However, I have to say that this is no surprise at all. In fact, I expected that Dorsey would not do a great job at TWTR.
The truth is that years ago, Dorsey held the position as CEO at Twitter. Unfortunately, at the time, he was too busy partying and learning how to draw and didn’t have enough time to really focus on growth at TWTR. As a result, after 2 years, Dorsey was fired from his position. Now, here we are years later. Dorsey isn’t so interested in partying anymore, but he still doesn’t have enough time on his hands to run TWTR. After all, he is also the CEO at Square! The bottom line is that 2 full-time jobs are hard to hold down as a regular employee. However, as a CEO, it’s nearly impossible.
So, When Would I Invest In TWTR?
I’d never say that I would never invest in a company. The truth is that any struggling company can turn around… I’ve seen it time and time again. However, I can say that it would likely be a long time before I was willing to invest in TWTR. First and foremost, Dorsey would need to resign and the company would need to bring in a plan-focused CEO. Then, I would have to hear about a plan that focused on users, not advertisers. Finally, I would have to see this plan go from paper to action. The bottom line is that right now, TWTR is doing nothing for its users. Until this changes, we’re not going to see solid growth out of the stock!
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What Do You Think?
Where do you think TWTR is headed moving forward? Let us know your opinion in the comments below!
[Image Courtesy of Pixabay]