Twitter Inc (NASDAQ: TWTR)
Twitter has had an incredibly rough time in the market over the years. In fact, since it’s record high of $69.00 per share, the stock has given up more than 75%. At this point, several experts seem to believe that TWTR is priced just right for gains. However, I beg to differ. Today, we’ll talk about why TWTR has had such a rough time in the market, whether or not it’s time to invest in the stock, and what we can expect to see moving forward.
Why Twitter Has Had Such A Rough Time
Twitter is a social network. As a result, for the company to be doing well, it needs to attract the masses and retain them as regular users. However, the company simply hasn’t been able to do that. In fact, user data became such an issue that in the beginning of 2014, investors started to push for the resignation of the then CEO, Dick Costolo. As a result of the pressure from investors, Costolo resigned from TWTR, leaving co-founder, Jack Dorsey as the interim CEO. Since then Dorsey has taken on the role as the permanent leader of the company; which I don’t think is such a great thing, but we’ll talk about that later in this article!
Is Now The Time To Buy TWTR?
Every morning, I start the day off by reading about the stocks that I follow. TWTR is one of those, so naturally, I started this morning with a little bit of reading about the company. In doing so, I came across a few articles stating that now is the time to start investing in Twitter. However, the only reason for this opinion seemed to be the fact that the stock had fallen to such a low price. I know that the goal is to buy low and sell high. However, the simple fact that the price is low isn’t enough to insinuate that gains are coming. It’s important to look into the reasons the stock is falling before making the decision to buy at what’s believed to be a low price.
Considering the fact that it’s important to look into why the stock is declining, let’s do that, shall we? So, we know that TWTR has been facing a user issue for quite some time. Well, that’s why we’re seeing declines. However, it’s not just the fact that Twitter isn’t able to drive new users into the network. The declines have more to do with the fact that TWTR doesn’t even seem to be trying to solve the problem. Over the past several months, we’ve seen several changes to the social network. However, none of the changes made seem to affect the problem at hand. All of the changes made have been to create a better experience for advertisers. So, it’s likely that the users issue will continue, and since users don’t like to see too many ads, it’s possible that user numbers may start to retract.
What We Can Expect To See Moving Forward
While I hate to be the bearer of bad news, the forward looking picture with regard to TWTR seems a bit grim. The reality is that while the company knows and acknowledges what it’s primary problem is, they haven’t taken the time to focus on solving that problem. As a result, it only makes sense that the problem will persist. Until TWTR puts efforts into attracting new users rather than new advertisers, I’m expecting to see further declines. So, answering the question from the title, yes, if things keep going how they have been, TWTR can fall to $10 per share or even lower!
What Do You Think?
Where do you think TWTR is headed moving forward? Let us know your opinion in the comments below!