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Twitter is a microblogging platform designed to help individuals, businesses and brands express themselves on the internet. The online platform has millions of active users including influential people such as celebrities, politicians, entrepreneurs and original content creators.
You can share posts or tweets on Twitter using a personalized handle, and if you’re a registered user you can also follow other people and brands. Although Twitter has recently imposed its control over some of its users and content, it still attracts new audiences from all over the world.
If you’re looking for a tech company to invest in, Twitter can be a profitable stock to trade.
How to Buy Twitter (TWTR) Stock
An online broker will let you browse through thousands of listed companies on major stock exchanges such as the NYSE and Nasdaq. You can sign up for an account for free and manage your portfolio at your convenience.
Take a look at Benzinga’s step-by-step guide to help you trade Twitter stocks.
- Pick a Brokerage
There are plenty of trusted online brokers to choose from. Online brokers let you trade a range of financial products such as stocks, options, futures and mutual funds. Many online brokers allow you to trade stocks commission-free. You can also trade stocks on the move using its mobile app for iOS and Android.
- Decide How Many Shares You Want
Depending on your trading strategy, you can decide the number of shares you want to buy. For instance, let’s say Twitter is currently trading at $47 and you want to invest $1,000 in the social media company. You can buy up to 21 shares of Twitter on the online broker.
- Choose Your Order Type
Online brokers let you choose between a broad range of order types to execute your trade.
Bid: The price of a stock is constantly fluctuating on the stock market. A bid or a bid price is the highest amount of money a buyer is willing to pay for the stock. If Twitter is currently trading at $47, you can set the bid price to $46. As soon the market price of Twitter falls to $46, your order will automatically get executed.
Ask: Ask (ask price) is the lowest amount of money a seller is willing to sell his shares for. Say Twitter is currently priced at $47, you can set the ask price for $48. As soon as the market price of Twitter rises to $48, your order will automatically get executed.
Spread: The difference between the bid and ask price of a stock is called the spread. If the bid price of Twitter is $46 and the ask price is $48, the spread is $2. Stocks with high liquidity have abundant buyers and sellers on the market. As a result, the spread tends to get tighter.
Similarly, stocks with low liquidity have fewer buyers and sellers on the market. Hence, the spread tends to get broader. In these cases, you might find it a challenge to trade stocks at your preferred price.
Limit Order: You can buy and sell your stocks for a specific price with a limit order. You can assign your preferred price for a buy order and it will get executed when the stock price drops to that value or lower. Alternatively, you can assign a price for a sell order and it will get executed when the stock price reaches that value or a higher price.
Market Order: You can instantly buy or sell a stock with a market order. Unlike a limit order, a market order is guaranteed to get executed. However, you might not get to trade the stock at your preferred price.
Stop-Loss Order: You can limit your losses on a stock trade with a stop-loss order. If the stock price of Twitter is $47, you can set a stop-loss value of $45. When the stock price reaches $45, it will automatically get turned into a limit order and get executed. A stop-loss order can potentially save you a lot of money if the stock price takes a plunge during market swings.
Stop-Limit Order: A stop-limit order is similar to a stop-loss order. You have to assign 2 values for a stop-limit order, a stop-loss value and a limit value. For instance, if Twitter is trading at $47, you can assign a stop-loss value of $43 and a limit value of $45. The order will not get executed when the stock price falls to $45 — it will get turned into a market order and trade at any price between $43-$45.
- Execute Your Trade
Once you’ve decided on the number of shares you want to buy and the order type, you can purchase stocks on the online broker. It might take a few minutes for the shares you have traded to reflect in your portfolio.
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Twitter Stock History
Headquartered in San Francisco, California, Twitter was launched in 2006. The tech company went public in 2013 with an initial price offering (IPO) of $26. It reached its all-time high of $63 in December 2013. Within 2 years, the price of the stock dropped below its IPO to $25.94 in 2015.
Since then, Twitter has regained its value and is currently trading at over $37 per share. It has a 52-week low of $73.34 and a 52-week high of $31.30. The social media company has high liquidity and trades more than 10 million shares per day. It has a market cap of over $28 billion.
In recent news, Billionaire and businessman Elon Musk offered to buy the social media platform on April 14th, 2022 for an enormous sum of $43 billion. On April 15th, Twitter accepted the bid for $44 billion, meaning it's being bought for $54.20 a share. However, Twitter is set to be privatized, meaning shareholders would receive $54.20 for every share owned. The deal is still months from being closed, the price had been agreed upon before the shares sank to their current value.
Pros to Buying Twitter Stock
There are several advantages of owning shares of Twitter.
1. Twitter is a popular platform. More than 145 million users posted over 500 million tweets daily on Twitter in 2020.
2. Twitter has a track record of positive business growth. Over the years, Twitter has generated revenue of $2.4 billion in 2017, $3 billion in 2018 and $3.3 billion in 2019.
3. Twitter has acquired more than 63 companies since its launch. These companies include Vine, Yes, Inc., Squad and Ueno.
4. If the deal with Elon Musk goes through, shareholders will receive $54.20 per share.
Cons to Buying Twitter Stock
Consider these disadvantages of owning shares of Twitter.
1. Twitter is perceived as an overpriced stock in the market. Early in January 2021, Twitter lost more than $5 billion in market value when President Trump was banned from the platform, tumbling its stock price by 12%.
2. With its stock price suffering a sharp decline, Twitter has been pushed to the bottom of the S&P 500 and is the worst-performing stock on the index.
3. Twitter may not be suitable for long-term trading. The tech stock does not offer dividends to its shareholders.
4. Twitter is considered a risky stock to invest in. Since geo-political news and current events have a major impact on the social media platform, Twitter’s stock price is prone to market disruptions compared to other tech stocks.
Twitter is a Popular Tech Stock
Even with the emerging competitive platforms and Twitter’s recent decline, people from across the globe use the platform. It is still among the most active social media vehicles and attracts hundreds of thousands of new users every year. Apart from being a reliable tech stock to invest in, day traders also log on to Twitter to stay on top of trends.
Twitter is widely used by businesses and international organizations to promote their brands. The massive outreach of Twitter and its growing revenue figures over the years make it a promising stock to consider.
Frequently Asked Questions
Questions & Answers
Twitter was founded by four people: Jack Dorsey, Evan Williams, Biz Stone, Noah Glass.