Use access key #2 to skip to page content.

Stock of the Week: Twitter

Recs

5

December 04, 2013 – Comments (2) | RELATED TICKERS: TWTR

Twitter’s made a lot of headlines recently as it just IPOd only a few short weeks ago. The stock was priced at $26 per share and closed on its first day of trading at $44.90. Not quite a double but it sure was close. Click here to access EDGAR and Twitter's most recent S-1A where you can learn more about the company.

*Twitter raised around $1.8 billion selling a total of 70 million shares. Today the company has approximately 544,700,000 shares outstanding with about 284 million of those floating on the open market;

*Twitter carries a market capitalization of $22.5 billion. For context, Facebook is about $120 billion, LinkedIn is $26 billion and Google is about $350 billion;

*TTM revenue for Twitter is $535 million, operating loss of $135 million and net loss of $142.6 million;

*Twitter’s quiet period recently expired which brought an onslaught of Wall Street coverage and ratings which cover the gamut from buy to sell to neutral with price targets from $30 to $50;

*Twitter’s user base includes more than 230 million monthly active users (MAUs), more than 100 million daily active users who put out more than 500 million Tweets per day;

*Market opportunity: global ad spend is around $500 billion and of that global digital ad spend is $101.5 billion and growing;

*To date this year 76% of Twitter’s MAUs accessed the platform via mobile device (mobile phones and/or tablets) and over 70% of revenue was generated from mobile devices.

*The company defines MAUs as users who logged in and accessed Twitter through the website, mobile website, desktop or mobile applications, SMS or registered third-party applications or websites in the 30-day period ending on the date of measurement;

*A 2013 study conducted by Arbitron Inc. and Edison Research found that 44% of Americans hear about Tweets through media channels other than Twitter almost every day.

*Twitter customers include users, platform partners, advertisers and data partners;

*As of 2012 there were 2.4 billion Internet users and 1.2 billion smartphone users. About 230 million of these are Twitter MAUs indicating plenty of audience left to reach.

*Twitter’s estimated sales for 2014 are $1.1 billion versus $28 million in 2010. This represents a potential CAGR of 150% over four years.

I think it’s important to recognize the fact that while some may feel the MAU numbers Twitter puts forward could be a liberal interpretation of users (because the numbers say that only about half of these actually Tweet), the fact is that one doesn’t have to act, or Tweet, in order to get value from the service or be considered active. I know many who use Twitter on a daily basis but Tweet very rarely. Whether you Tweet or not, advertisers go where the eyeballs are. I personally think there’s more power to this platform than many are giving it.

Anyway, this is just a start. I’m gonna keep on digging in so please feel free to join the discussion. There will be more to come.

Foolish best,

Jason

 

2 Comments – Post Your Own

#1) On December 05, 2013 at 11:47 AM, TMFJMo (70.71) wrote:

Here's a good LinkedIn post from Ryan Holmes, CEO of HootSuite titled, "Top 5 Reasons You Weren't Supposed to Buy Twitter Stock". I think it's an interesting perspective on why many may dismiss Twitter today and why that may not be wise to do.

I personally love #3 and #4, but all five are solid points. 

Report this comment
#2) On December 10, 2013 at 1:09 PM, Mary953 (63.08) wrote:

I had dropped Twitter into the group of stocks that I was not going to own.  Then I read your posts with links. Your reasons for purchase made sense to me, so I bought in at $45 on Monday.  We are now at $52 and it is only Tuesday.  Thanks much!

Report this comment

Featured Broker Partners


Advertisement