After Twitter gained its footing last week, this social media company – with its potential to tap into a sizable, loyal user base with seemingly unlimited online ad options – can offer portfolios substantial growth.
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Word of the layoffs doesn’t come as a huge surprise as previous reports suggest that Twitter is freezing the expansion of its San Francisco headquarters.
The organizational reshuffling has been portrayed by analysts as one of Dorsey’s first moves back at the helm.
The main reason for this is that Twitter addresses just 16% of the Digital Life pie with its services (see here). A significant number of accounts aren’t even backed by real people, but are run by “bots,”or programs that send out tweets”.
The problem is that investors aren’t as convinced today about why they need to have Twitter in their portfolios. Brean Capital reissued a buy rating and issued a $55.00 price target on shares of Twitter in a research note on Friday, June 12th.
The flow of users and traffic appears to be shifting in Instagram’s favor, which could become a crisis for Twitter if users begin deciding that it’s too much trouble to maintain a presence on many different platforms. The firm had revenue of $502 million for the quarter, compared to analyst estimates of $480.88 million.
Many media outlets, including the New York Times reported about Twitter’s coming layoffs over the weekend.
Dorsey is exploring various ways of boosting Twitter’s user base, including the introduction of a real-time events service called Moments. It’s also planning to abandon plans to expand into a 100,000-square-foot building, the publication added. Moments, which can be found as lightning-bolt emblazoned tab on a user’s Twitter page, consolidates stories trending on Twitter.
“Twitter has had a rough 2015, full stop”.
The recent rebound in TWTR stock, combined with the current off-peak prices, present an ideal entry point for Twitter investors who can tap into a company that is quickly working to revive interest among users and advertisers.
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Whether that proves true may depend on what a little bird says about its growth prospects when it reports third-quarter results on October 27.
