Twitter 'Crushed The Quarter,' Gains 10%
"They crushed the quarter," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. He noted that the guide was in-line but said he didn't care that MAUs (monthly active users) only rose four million to 288 million.
"Twitter doesn't have to be as big as Facebook," said Udall. "I just want Twitter to get to $100 billion market cap. They only need 400 million MAUs to get there."
Udall was so impressed with Twitter's results that he offered a new trading idea.
"I think Twitter long, Facebook short is a very good pair trade for the next two or three quarters," he said. "I'm not saying Facebook is going to go down a lot, but I don't know how much higher it can go."
Udall said that while Twitter's ad load is still very low, Facebook has already maxed out the number of ads it can display.
"Twitter still has a massive amount of runway to increase ad loads," he added. "This was a very good quarter. People are starting to recognize it now."
Cody Willard, chairman of Scutify (a financial social network) was intrigued by Twitter's "steady, impressive monetization [and] user growth."
"I don't know that those metrics that Wall Street were looking for -- which were mostly user growth and time spent on Twitter and those types of metrics -- are going to be met or not," Willard told Benzinga. "It sure looks good to me as a long-term investor in the company."
Willard doesn't think Twitter has to worry about competing with Facebook.
"The social networking space, the big data space, is so huge and such a new industry that Twitter and Facebook are like the GM and Ford of the automobile industry in 1930: they're the dominant, clear winners of the social networking wars," he said. "It doesn't mean it's game over, but it's their game to lose. I don't see Twitter and Facebook as pure competitors ever anymore anyway."
A Leader In DAUs? When!?
In its third quarter earnings release, Twitter CEO Dick Costolo said that he is "confident in [the company's] ability to build the largest daily audience in the world, over time, by strengthening the core, reducing barriers to consumption and building new apps and services." He said this despite the fact that Twitter does not highlight the social network's number of daily active users.
Udall has repeatedly told Benzinga that he doesn't care about this metric (or MAUs, for that matter).
"I don't think DAUs and MAUs are that big of a deal," he said.
Willard isn't overly concerned either, but he defended Costolo's comments.
"Can you imagine being in a CEO high-profile seat where everything you ever mention is taken out of context and suddenly becomes the things that analysts and the media hang their hats on?" Willard questioned. "[Costolo is] confident that he'll get this network into the biggest one on the planet. That doesn't mean he thinks it is going to happen in the next 30 days. He's looking out five or 10 years. He's not checking the number every morning."
When asked if Twitter could achieve that goal, Willard said if he didn't believe it was possible, he wouldn't think it was a "revolution investment."
"And I own it because I think it's a revolution investment," he concluded.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Image credit: Matthew Keys, Wikimedia
Latest Ratings for TWTR
|Feb 2017||Cowen & Co.||Downgrades||Market Perform||Underperform|
|Feb 2017||Raymond James||Downgrades||Market Perform||Underperform|
|Feb 2017||Deutsche Bank||Downgrades||Buy||Hold|
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