Is Twitter (TWTR) A Good Investment Right Now?

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Twitter Inc (NYSE: TWTR)

Twitter has been struggling for quite some time now. After their last earnings report showed another example of their massive user issue, the stock declined in a big way, and we’ve seen slow and steady losses since. That is, until today. Currently (12:17), TWTR is trading at $36.17 per share after a gain of 4.37% so far today. Now the question is “has it reached support and will it continue to grow?” Below, we’ll discuss what’s causing today’s climb and what we can expect from Twitter moving forward.

What Is Causing TWTR To Climb Today?

Twitter announced yesterday that it had acquired the Massachusetts-based machine learning start up known as Whetlab. As one would expect, the acquisition is an attempt to solve the big user acquisition and retention issue we’ve been seeing so much about. The goal here is that the machine learning software at Whetlab will be used to organize content; leading to a better user experience and helping with user retention. The value of the acquisition is currently undisclosed; but we’ll probably hear more about that moving forward. Here’s what a representative of Whetlab had to say about the acquisition…

Over the past year, we have created a technology to make machine learning better and faster for companies, automatically…Twitter is the platform for open communication on the internet and we believe that Whetlab’s technology can have a great impact by accelerating Twitter’s internal machine learning efforts.”

What We Can Expect To See From Twitter Stock Moving Forward

While I had a relatively bullish opinion of Twitter this time last year; my view has unfortunately changed. The reality is that the massive user issue the company faces raises big red flags around management; and no machine learning software can teach management how to properly run the company! I think that’s something that Twitter knows too. There’s a reason that Dick Costolo stepped down as CEO, and it’s not because he had a great plan for growth.

I do believe that under proper management, the machine learning technology at Whetlab could make a big difference for the social network. However, I also believe that opening the Firehose feed to Google could have been more advantageous, if there was a solid plan for how it would help. They also could have solved the user issue by attacking abuse in the network, taking advantage of streaming video, or a slew of other solutions they’ve tried in the past. However, there hasn’t been a clear plan outlined for any of these solutions; and as a result, none of them seemed to work.

What Twitter Needs In Order To See Long Term Growth

I can understand why the Whetlab acquisition is such a big deal for investors. However, as I stated above, I don’t see it being a long term solution without strong management. What Twitter needs now is a CEO with a plan and a willingness to carry that plan out. The reality is that Twitter is a great product, however, the company’s management seems to be running through a corn maze without a map; hitting dead ends at every turn. While I think it’s going to be hard to find a long term replacement for Costolo, given the current state of the company, I also think that a solid replacement is probably going to be the only way for TWTR to bounce back!

What Do You Think?

Where do you think TWTR is headed and why? Let us know in the comments below!

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