Why I’m still bullish on Twitter
My first column for the Business section was about the highly anticipated Initial Public Offering or IPO of Twitter in 2013. I rightly predicted a home run for the microblogging social network, in the wake of Facebook’s failed 2012 IPO, which resulted in lawsuits and lost confidence.
Twitter made a glorious debut on the New York Stock Exchange, with shares soaring 93 percent on its first day of trading. Fast forward to today, when Facebook stock is trading at three times its initial offering price while Twitter’s stock is languishing at 38 percent of its IPO price.
Here’s why I’m still bullish on Twitter:
Twitter purchased Periscope, the live video streaming service for smart phones, last year while Periscope was still in development. Named Apple’s 2015 App of the Year, Periscope achieved user penetration among top brands of 15 percent in its first nine months of existence (businessinsider .com). This high adoption rate bodes well for Twitter’s monetization of the platform.
Donald Trump famously announced his candidacy for president on Periscope, and the Church of England now broadcasts services across the world using what Danielle James of The Huffington Post christened “the new TV” (amigobulls.com). Twitter just announced that it will be live-streaming Thursday Night Football games this fall.
Periscope features real-time interaction between broadcasters and viewers, creating a conversation rather than a monologue. Videos show up directly in your Twitter stream instead of forcing you to click on a link to view the live broadcasts. Integrating Periscope with Twitter increases its reach and allows brands to use Twitter’s ad-targeting tools via display ads.
Furthermore, Twitter has crashed the gates of mainstream media. News happens and is instantly available on Twitter, for better or worse, via citizen journalism. Periscope offers an immediate window on the world that enhances Twitter’s real-time appeal as a source of breaking news and a gauge of public sentiment around news and events.
The return of co-founder Jack Dorsey as Twitter CEO is reminiscent of Steve Jobs’ return to Apple, the company Jobs co-founded. Dorsey has already made sweeping management changes, updated functionality and re-energized the company. His vision and fearless leadership provide additional upside for Twitter’s shareholders.
Here’s the bottom line: Twitter is the go-to source for news and live-streaming video. Dorsey is a visionary entrepreneur who will leverage Twitter’s relevance to develop new revenue streams. Facebook has launched its own live-streaming video service to capture real-time content and drive global conversation, but it still lags Periscope’s agility due to the constraints of Facebook’s algorithmic News Feed. For now, Twitter has the edge.
As for Twitter’s stock price, if you liked it at $26 you’ll love it at $16.
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