Twitter Is Awesome…

July 29, 2015 0 Comments

Sorry, did I say the word ‘awesome?’ I was actually referring to the social media platform. I think its great being able to share your statuses, updates and ideas in real time. Aside from that, the company doesn’t exactly have the worst earnings in the tech industry, but the headline figures weren’t enough to keep investors optimistic…

Twitter beat virtually all non-GAAP estimates, from revenue to EBITDA:

The company also reported a non-GAAP diluted EPS of $0.04, which compares to rough average estimates. However, everyone was focusing on user growth, which isn’t bad on a headline basis:

So what exactly was the problem? The problem was that that market begain to reexamine the information from the quarterly earnings report. Aside from the fact that the company still hasn’t found a viable candidate for Dorsey’s replacement as CEO, the earnings report lacked a clear plan on how to generate growth/traffic.

Despite the growth in users, the user experience is really left to be desired. I’ve already explained in previous post, the company has yet to make tweeting easier and effortless to use, fails to engage with average users, let alone found a way of making the average user feel valued. Most of the time, I usually just stick to finance when using Twitter. If not, you’re bombarded with the usually nonsensical tripe that is “Twitter.”

But yeah, as long as you have a bunch of users, one can easily justify a $25 billion dollar market capitalization (Instagram, anyone?). This is especially true when all of your profit is tied up in non-GAAP metrics.

So is it time to buy Twitter? I dunno. All I know is that the company has practically gone on sale today. Investors continue to have a negative outlook on the stock. The management situation doesn’t seem to be going anywhere. Jack Dorsey can’t be on the board of Disney, the CEO of Square and the CEO of Twitter all at the same time. With any amount of luck, a new CEO will be named within the next couple of months. Just in time for the company to focus on its new gimmick: Project Lightning.

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