Good times to buy into $TWTR ;).
Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
31–40 of 207 posts
Re: Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
#32Twitter should print out these comments and throw darts to pick their new executive team.
Re: Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
#33Earlier quoted context omitted.
Twitter had a Q1 revenue of $436 million. Doesn't it make it a $X0 billion business or am I missing something ? The main concern to investors is primarily the growth and their ability to warrant a premium price on the stock.
Twitter is huge, it costs a lot of money to run. They had a net profit of negative $162.4 million Q1. I don't know what defines an $X0 billion business, but I would imagine that it would be profit.
Put simply, future value. Otherwise a sidewalk lemonade stand profiting 1 cent per glass would be far more valuable than a lemonade manufacturing business which sells millions of bottles a day and pumps all the profits plus additional investment money into manufacturing facilities. At some point, the money-losing lemonade manufacturer no longer needs to ramp up their facilities, they pay down the equipment cost, and generate boatloads of profit. That or they get bought out by a larger player who wants to enter the lemonade market but doesn't want to reinvent the wheel.
Re: Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
#34To me the problem with Twitter lies solely with what Twitter's logged-out homepage looks like. I don't know what it's trying to be but asking me to sign up, browse categories (?), and read top celebrity posts is not it. Why is logged-out Twitter not a search engine? They have up-to-the-second thoughts from their users about everything and it's the first place I go when a site is down, or some news story is breaking.…
This. I get that they want sign-ups, but it's hard to sell the service with that page.
Re: Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
#35"At stake is whether Twitter [...] can become a mainstream platform instead of a niche forum favored by journalists and celebrities." I found that line interesting, because I often think of Twitter as a niche forum favored by technology workers and celebrities.
When I think of twitter I think nothing but mainstream. There are two platforms that anyone who is anyone (celebrity or business or politician) needs to have: either Facebook or Twitter. Niche is Instragram. Niche is Snapchat. But when Kardashian is on CNN once an hour because of a tweet, it's not niche. App.Net is niche. Twitter is the epitome of mainstream.
CNN is precisely the journalism niche they are talking about.
It isn't about niche celebrities, but celebrities as a whole is their niche. And journalists, of course. Newspaper websites publish vast quantities of tweets because it costs them nothing, it means you indirectly consume a lot of tweets.
But the celebrity content consumed by journalists is as a whole still a niche, even if all celebrities are on there.
FWIW I think it would be a mistake to abandon that, but it does raise questions about how they grow.
Re: Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
#36"At stake is whether Twitter [...] can become a mainstream platform instead of a niche forum favored by journalists and celebrities." I found that line interesting, because I often think of Twitter as a niche forum favored by technology workers and celebrities.
Yeah, or protesters and celebrities. It could actually be anyone and celebrities, because you only see the groups that you participate in, and the only one with global visibility are, duh, celebrities! I think Twitter's biggest problem is lack of vision and a commitment to that vision. Going public was a big mistake for them, because Wall Street has no concept of what makes technology good or interesting over the lon…
"If you can't build a viable company with 300M of the most influential users, then something is very very wrong in the world."
One of the intriguing thing I'm keeping my eye on is that if TWTR keeps sinking, will there be any other follow-up effects? Because if TWTR can't convert eyeballs to money at the Wall Street-expected rate, that suggests in that invester-sphinctor-tightening way that maybe the other companies depedent on that model may have trouble too.
The market's faith in eyeballs ---advertising---> money has always struck me as excessively strong. Not that it's a stupid idea, just that Wall Street seems to believe it's about 5-10 times more effective a plan than I do.
Re: Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
#37Earlier quoted context omitted.
Their revenue exceeds 1bn per year so...yeah. They are a billion dollar company.
I would say normally when you are using monetary value as an adjective for a company, you are describing how much it is worth, not in relation to revenues. Most companies do tend to have Revenue/EV multiples greater than 1.0, so more times than not, that would be correct. However, I would not say that would always be the case.
Fair enough. Twitter definitely doesn't produce profits in the billions. Twitter doesn't even produce profits at all. It's a poorly run billion dollar company imo [1,2].
If operated and ran efficiently it has the reach and potential to produce billion dollar profits. I highly doubt we'll ever see a twitter like that though. They're too far entrenched in the culture of frivolous spending and Silicon Valley economics.
1. http://money.cnn.com/2014/03/06/technology/social/twitter-ca...
2. http://in.reuters.com/article/2015/04/28/us-twitter-results-...
Re: Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
#38Twitter was the first in a long list of current (i.e. post-2000) startups where I thought to myself, Really? That's a $X0 billion business? I wonder if this is just the tip of the iceberg.
Twitter had a Q1 revenue of $436 million. Doesn't it make it a $X0 billion business or am I missing something ? The main concern to investors is primarily the growth and their ability to warrant a premium price on the stock.
Businesses are usually valued on reasonable (e.g. 12-18x) multiples of their profit (and by that it's their actual profit not these silly non-GAAP 'profit if you ignore all this stuff we don't want you to look at' profit nonsense). Tech companies often try to pretend this isn't reality, but after you've been trading on the public markets for a while reality starts to set in hard.
So for Twitter to be a legit business valued at $18.5 billion (as it is today) they need to consistently churn out around $1.5 billion a year in pure hard core profit. They are nowhere near that and there's no sign of how they will get there. Hence all the negative pressure on the stock. When you bring it back to fundamentals that's the issue here.
Re: Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
#39Twitter hasn't focused on anything else besides twitter. Facebook is taking on the mission of "connecting the world". Google has gone well beyond being only a search engine. Amazon has expanded into mobile, AWS and ... Twitter, on the other hand, is still pushing the same product.
The kind of investments you are referencing (ones which to me are many steps removed feom core impact) are hard to do before the core business is nailed down, which in this case the market seems to think Twitter had not yet done.
Re: Twitter Falls Below IPO Price as Concerns Mount Over CEO, Growth
#40Twitter was the first in a long list of current (i.e. post-2000) startups where I thought to myself, Really? That's a $X0 billion business? I wonder if this is just the tip of the iceberg.
Their revenue exceeds 1bn per year so...yeah. They are a billion dollar company.
TWTR right now has a operating margin of -26%. So they spent ~1.3B to get that 1.0B in revenue.
If I were to make a bunch of goods for $130/each, and then sell them for $100/each but managed to sell 10M of those goods should I be valued as a billion dollar company?