Twitter Inc (NYSE: TWTR)
Twitter is a struggling company, there’s no discounting that. However, many investors are starting to ask… How long will TWTR continue to decline? Every morning, one of the first things I do when I wake up is start reading about different stocks I follow, good or bad. One of those is Twitter. Recently, I’ve been surprised to see that so many people have such a bullish opinion of what to expect from the stock. In fact, this article says that TWTR is a $50 stock! I thought, “Are you kidding me? I have to read this!!!” Even after reading the article, I have a very bearish opinion of what we can expect to see from the stock. Today, we’ll talk about why TWTR has had such a rough time in the market and why I believe that the stock is going to continue on the downtrend.
Why TWTR Has Had Such A Hard Time In The Market
Twitter has been falling for quite some time, and for good reason. Since 2014, the company has struggled to drive new users in. After all, Twitter is a social network; meaning that it’s absolutely nothing without its users! Since the poor user trends started, we’ve seen overwhelming declines on the value of the stock. In fact, investors are so concerned about user data that they pushed for the resignation of the company’s ex-CEO Dick Costolo, who resigned in early 2015.
When Costolo resigned, Jack Dorsey picked up in his place, acting as the interim CEO of the company while TWTR looked for someone qualified enough to take control. Unfortunately, there are few qualified CEO’s out there, and none of them proved to be willing to hop aboard the sinking ship that is Twitter. So, Jack Dorsey took on the role as permanent CEO, a role that he maintains to this date.
Why TWTR Is Likely To Continue Declining
While there are definitely bulls out there, I have to say that the bulls have it all wrong. The bottom line is that the bears have, and will likely maintain control! In my opinion, there are two big reasons why we can expect further declines on Twitter…
- Jack Dorsey – The first reason is Jack Dorsey himself. Dorsey is a co-founder of TWTR, so it only makes sense that he will be able to effectively run the company. However, he has a bit of a bad history. Dorsey was the CEO of TWTR for two years in the past. During this time, he simply couldn’t seem to focus on the tasks at hand. In his young age, Dorsey was more interested in partying and learning how to draw than he was in growing TWTR. While he is older today, his focus still isn’t where it should be. That’s because Dorsey is the acting CEO of both Twitter (a struggling company) and Square (a newly public company). Between the two, there simply isn’t enough time in the day for him to focus his attention on Twitter!
- Focus Questions Have Been Proven – If you think that questions about Dorsey’s attention to Twitter are unwarranted, just look at what we’ve seen since he took control. Everyone knows that Twitter is struggling with bringing new users in… well, it seems that everyone, but Jack Dorsey is aware of this problem. That’s because since he took control 3 quarters ago, we’ve seen several changes that are geared toward advertisers. However, we haven’t seen any movements geared toward creating a better user experience. This is bad business if you’re a social network.
The bottom line here is that Twitter is a company with a massive lack of focus on the issues at hand. They are focusing all of their attention in the wrong places, which will likely lead to further declines. There’s no other way to slice it!
What Do You Think?
Where do you think TWTR is headed moving forward? Let us know your opinion in the comments below!