fbpx
QQQ
-2.78
348.12
-0.81%
DIA
-5.03
343.68
-1.49%
SPY
-6.13
428.10
-1.45%
TLT
+ 2.35
140.69
+ 1.64%
GLD
-0.10
165.95
-0.06%

Even Trump Can't Save Twitter From Monetization Failure

by
May 1, 2017 11:48 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

Twitter Inc (NYSE:TWTR) investors enjoyed a big post-earnings pop last week, and shares are surging another 6.5 percent on Monday after the company disclosed that CEO Jack Dorsey purchased more than half a million shares of the stock. However, a surprise uptick in user numbers in the first quarter is still not enough for Argus analyst Jim Kelleher to recommend Twitter to clients.

Trump–Twitter, In Tandem

According to Kelleher, Twitters uptick in users could simply be tied to President Donald Trump and his affection for the platform.

“We believe that the inauguration of President Trump may have prompted some of his base of committed supporters to join Twitter. But this is unlikely to be a recurring event, unless the President’s approval rating improves,” Kelleher explained.

Despite a 3-million increase in monthly active users, Kelleher pointed out Q1 marked Twitter’s first-ever, double-digit declines in sales and adjusted EPS. Looking ahead, Twitter’s monetization process is only going to get increasingly difficult in the face of competition from Facebook Inc (NASDAQ:FB) and Snap Inc (NYSE:SNAP), both of which are growing at much higher rates than Twitter.

Even with Twitter shares down 53.7 percent in the past two years, Kelleher says investors should be careful about buying the dip given the company’s potential for “sharp declines” in advertising revenue.

On Friday, Dorsey Tweeted that he purchased another $9.5 million in Twitter stock and has now bought exactly 1 million shares so far in 2017. Dorsey has been selling vested shares of his other company, Square Inc (NYSE:SQ), throughout the year.

Argus maintains a Hold rating on Twitter.

Related Links:

Twitter + Bloomberg = New Streaming TV News Service

Sell In May And Go Away?
_____
Image Credit: Screengrab from @realdonaldtrump

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.


Related Articles

Internet Analyst: Some Companies Will Benefit From People 'Cocooning'

At War With Apple, Facebook Likely Setting Bigger Sight On Augmented Reality Dominance With Smartwatch Launch, Says Analyst

Facebook Inc’s (NASDAQ: FB) anticipated smartwatch launch in 2022 could be its gateway to gain on the next mobile computing platform — augmente read more

What Analysts Think Of Apple WWDC's First Day, Including iOS 15 And Privacy

Apple Inc (NASDAQ: AAPL) commenced its Worldwide Developers Conference, also known as WWDC21, on Monday, presenting online for the second straight year due to the COVID-19 pandemic. Analysts, of course, paid attention. read more

Here's How Much New G7 Tax Proposals Could Hurt FANG Stocks

Over the weekend, finance ministers from G7 economies agreed to new global tax policies that could potentially have a major impact on big tech stocks. What Happened: G7 members Canada, France, Germany, Italy, Japan, the United Kingdom and the United States pledged to enforce a minimum global corporate tax rate of at least 15%. read more