Twitter Is Still Basically What It Was In 2008
Shares of Twitter Inc (NYSE: TWTR) have gained 8 percent since August 30, following Co-Founder and Director Evan Williams’ comments related to a possible sale of the company. The platform hasn't changed much since 2008 and Twitter still needs to figure out how to expand its user base, BTIG’s Richard Greenfield said in a report.
Bird Hasn't Learned To Fly
“Twitter has struggled to evolve from a passive, mobile-first, RSS news reader on steroids to a fully-engaging, interactive media and messaging platform,” Greenfield commented.
The company hasn't yet figured out how to make its product easier to use, which is needed to expand its user base. Given Twitter’s lack of innovation, even startups like Snapchat have overtaken it in terms of daily users.
Could Twitter Be Sold?
Despite the recent surge, Twitter’s shares are trading below the IPO price of $26. It’s almost three years since the IPO and growth prospects are “far less robust,” Greenfield pointed out. He added, “With a market cap of $14 billion and a $12 billion enterprise value, Twitter could be digestible by a wide range of media and tech companies.”
In fact, investors have been holding onto Twitter’s stock with M&A hopes, and the share price would likely be significantly lower than the current levels in the absence of takeover speculation, the analyst mentioned.
Twitter’s shares recently jumped after Evan Williams’ M&A-related comments. Greenfield noted, however, that William’s comments have been the same since summer of 2015.
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