Twitter Inc (NYSE:TWTR) Target $20
TWTR has been maintained a sell at HEFFX but the target was lowered from $22 to $20
Twitter shares hit the slide on Tuesday as executives warned that the messaging service’s path to mainstream popularity would be a long one.
Shares first leapt shortly after the release of second quarter financial performance figures that topped market expectations.
But then they plunged after executives discussing the earnings said that while most people know what the service is, only a fraction of those people use it.
“We will take the necessary time to build a service people love to use every day,” Twitter co-founder and interim chief executive Jack Dorsey said during an earning call.
“We realize it will take a lot of time.”
Twitter on Tuesday reported that it lost US$137 million in the recently ended quarter on revenue that jumped 61 percent to more than half a billion dollars.
Twitter shares that jumped by more than 5 percent in after-hours trade immediately following the report fell by more than 9 percent in the aftermath of the earnings call with Dorsey and chief financial officer Antony Noto.
“Product initiatives we have mentioned in previous earnings calls have not yet had meaningful impact on growing audience,” Dorsey said.
“This is unacceptable and we are not happy about it.”
Noto said during the call that no meaningful growth was expected at Twitter for a “considerable” amount of time.
In a closely watched figure, Twitter said that the number of people using the one-to-many messaging service monthly climbed by 15 percent to US$316 million compared with the same three-month period a year earlier.
The majority of those additional monthly users were people in emerging markets who signed up to get updates from selected Twitter accounts via text messages sent to feature phones.
Such users, referred to by Twitter as SMS Fast Followers, are less lucrative when it comes to targeting ads
.
“We are planting the seeds in these markets today,” Noto said, reasoning that as smartphones gain traction in those places people will trade-up to more engaging Twitter experiences which bring with them more opportunities for the company to make money.
Twitter, Inc. (Twitter), incorporated on April 19, 2007, is a global platform for public self-expression and conversation in real time. The Company offers products and services for users, advertisers, developers and platform and data partners.
Products and Services for Users
It enables a way for people to create, distribute and discover content. It enables a user on Twitter to create a tweet and a user to follow other users. Users are followed by other users without requiring a reciprocal relationship, which is an asymmetric follow model. The public nature of the Twitter platform allows it and others to extend the reach of Twitter content beyond its properties. Media outlets distribute tweets beyond its properties. Advertisers use its promoted products, which are pay-for-performance to promote their brands, products and services. It enables its advertisers to target an audience based on various factors, including a user’s interest graph. Its promoted products are incorporated into its platform as native advertising. Media outlets, including the BBC, CNN and Times of India use the Twitter platform for content distribution. Vine is a mobile application that enables users to create and distribute short looping videos of up to six seconds in length. Users on Vine follow other users, re-broadcast content to their followers by re-vining, comment on videos and embed videos on Websites. It offers users the option to capture, edit and share videos up to 30 seconds in length directly within the Company’s application.
Products and Services for Advertisers
Its promoted products enable its advertisers to promote their brands, products and services, and extend the conversation around their advertising message. Its promoted products consist of promoted tweets, promoted accounts and promoted trends. Promoted tweets appear within a user’s timeline or search results. Promoted accounts appear in the same format and place as accounts suggested by its Who to Follow recommendation engine, or in tweets in a user’s timeline. Promoted accounts provide a way for its advertisers to build a community of users interested in their business, products or services. Promoted trends appear at the top of the list of trending topics for a day in a particular country or on a global basis. It features one promoted trend per day per geography. Its technology platform and information database enables it to provide targeting services based on geography, interests, keyword, television conversation and devices for advertisers to promote their brands, products and services. Its platform also allows customers to advertise across the mobile ecosystem across the user lifecycle. MoPub, its mobile-focused advertising exchange, combines advertisement serving, advertisement network mediation and a real-time bidding exchange into one monetization platform. Advertisers also set up campaigns directly on ads.twitter.com to run across the Twitter Publisher Network. Purchasers of advertising services monitor their advertising campaigns through campaign management, real-time analytics and advertiser application program interface (API).
Products for Platform Partners and Developers
It provides a set of tools, public APIs and embeddable widgets that developers use to contribute their content to its platform, syndicate and distribute its content across their properties. Its platform products include Twitter Cards, which enable developers to attach content and functionality to tweets and have that content appear wherever a tweet is displayed throughout Web and mobile applications; The Twitter public API, which allows platform partners to integrate the Twitter content and follower relationships into their applications; Twitter for Websites, which is a set of tools that enable platform partners to integrate Twitter content and functionality into their Websites, and Fabric, which is a platform offering modular software development kits that help developers build applications and allows them to tap into Twitter’s sign-in systems for identity verification.
Products for Data Partners
It offers subscription access to its public data feed for partners who access data beyond its public API, which offers a limited amount of its public data. Its Gnip branded products and services offer data sets to allow developers and businesses to utilize its public content.
The Company competes with Facebook, Google, LinkedIn, Microsoft, Yahoo, Sina Weibo, LINE, Kakao and AOL.
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