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Morgan Stanley Reviews Twitter And Dick Costolo's Resignation

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In a report published Friday, Morgan Stanley analyst Brian Nowak maintained an Equal-Weight rating on Twitter Inc (NYSE: TWTR), after the resignation of CEO Dick Costolo.

Twitter announced the resignation of Dick Costolo as its Chief Executive Officer, without naming his successor. The company would be considering both internal and external candidates, but has not set a specific timeline to fill the role. Co-founder Jack Dorsey is to serve as the company's interim CEO

The market reacted to the announcement by taking the stock up 3.5 percent, indicating that investors have a positive view of the change. "TWTR's reaffirming of 2Q guidance on June 11th, which de-risks the second quarter results, also likely played a role here," analyst Brian Nowak stated.

In the report Morgan Stanley noted, "…in our view the fact that this will be Twitter's fourth CEO since the founding of the company in 2006 speaks to the platform's struggle to find a consistent vision and core use case. We see this as one of the factors holding the platform back from building and maintaining a larger user base and more successful ecosystem."

Nowak believes that Twitter needs to a product specialist who would have a strong focus on building the company's core use case - "be it personalized real-time news and information, coincident TV viewing, having live, global conversations, among other possibilities," while adding that this would improve "the strength and monetization value of Twitter's ecosystem."

Latest Ratings for TWTR

DateFirmActionFromTo
Jan 2017UBSDowngradesBuyNeutral
Jan 2017Pivotal ResearchDowngradesBuyHold
Jan 2017Aegis CapitalInitiates Coverage OnSell

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Posted-In: Morgan StanleyAnalyst Color Reiteration Analyst Ratings

 

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