Twitter Inc (NASDAQ: TWTR)
Twitter is having an incredibly strong day in the market today; a much needed gain in the value of the stock. With the gains we’re seeing on the stock today, it may be tempting to start investing in the stock. However, I urge you… do not play into the hype. Today, we’ll talk about why the stock has had such a rough time in the market, what we’re seeing today, and why TWTR is worth staying far away from!
Why We’ve Been Seeing Declines On TWTR
While we’ve been seeing more declines on Twitter recently, the downward movement actually started shortly after the company went public. At the end of the day, the company has spent its entire existence struggling to get to profit and bring users in to the system.
Recently, things have gone from bad to worse. After more than a year of user growth issues, investors pushed for the resignation of the CEO of the company. Soon, co-founder Jack Dorsey picked up the baton, only to let investors down yet again. Unfortunately, even Dorsey couldn’t bring new users to TWTR at a compelling rate.
With the user growth issue continuing TWTR took a move in another direction. The company essentially put itself up for auction. At this time, investors got excited and the stock went soaring. However, as the story developed, the stock fell more.
At the end of the day, companies like Google, Apple, and salesforce.com all backed out of the auction one by one. Soon, it became clear that Twitter simply doesn’t have a buyer with adequate funding to take the company over. Unfortunately, nobody seems to want to acquire the company.
What We’re Seeing From The Stock Today
While the news surrounding TWTR has largely been negative, we’re seeing gains in the value of the stock today. At the moment, it seems as though investors believe that the stock has found support, and they’re sending the value upward. Currently (12:07), the stock is trading at $18.02 per share after a gain of $0.44 per share or 2.53% thus far today.
Why You Should Not Jump At This Stock
At the moment, considering the gains on the stock that we’re seeing today, I’m getting emails from investors asking if Twitter is a strong investment choice. In my opinion, it’s important to stay as far away from this as possible. At the end of the day, without strong user growth, the company will have no choice but to plateau, and meaningful profits are far from reach.
If the company were to be acquired, it would be a great thing for TWTR shareholders. However, I’m not expecting for that to be the case. The reality is that if an acquisition was indeed on the horizons, when the auction started to evolve, we wouldn’t have seen the major players dropping out of the bid for the company.
At the end of the day, TWTR is in trouble. The company can’t seem to get users excited, can’t bring in bidders for an acquisition, and doesn’t seem to have a solution. As a result, I’m expecting to see further declines.
What Do You Think?
Where do you think TWTR is headed moving forward? Join the discussion in the comments below!