Twitter’s stock is falling like a dead bird on reports that potential suitors aren’t bidding

Oct 6, 2016

Over the last few weeks, reports of potential suitors eyeing Twitter for a takeover have sent the social network’s stock skyrocketing, up roughly 35% from about $18 in mid-September to as high as $25 yesterday (Oct. 5).

But in after-hours trading last night, Twitter’s shares started plummeting back to Earth. The drop followed a report in Recode debunking recent rumors that both Google and Disney were going to bid on the company. The stock opened at $20.46 this morning, down roughly 18% from its close yesterday.

Recode also reported that Apple was unlikely to make a bid, leaving only one other rumored suitor, Salesforce, in the mix. According to The New York Times, Salesforce CEO Marc Benioff, speaking yesterday in San Francisco at his company’s annual Dreamforce conference, aimed to dispel investor concerns about a potential deal for Twitter. Twitter has a market cap of roughly $16 billion, and Salesforce, which is not profitable, has a market cap of roughly $46 billion—Twitter would be the company’s most expensive acquisition by far. “We look at a lot of things,” Benioff said at the meeting, without confirming or denying the company’s interest in Twitter. “The number we acquire is very few.”

Twitter apparently wants to wrap up any potential sale by its next earnings call, slated for Oct. 27. This does not leave a lot of time for interested parties, if there are any left, to kick the tires, get their paperwork in order, and submit a bid.

Twitter's shares slump on report that potential bidders lose interest

Twitter Inc's shares slumped more than 13 percent in early trading on Monday after a weekend Bloomberg report that top potential bidders, including Salesforce.com, had lost interest in making a bid for the company.

Salesforce, Alphabet Inc's Google and Walt Disney Co, which had worked with banks on a potential acquisition, are unlikely to proceed, Bloomberg reported on Saturday, citing people familiar with the matter.

Twitter had planned to hold a board meeting with outside advisers on Friday to discuss a sale but canceled, Bloomberg reported, citing one person familiar with the matter.

Twitter's shares plunged about 20 percent over the final two days of last week after technology website Recode reported that Google, Disney and Apple Inc were not interested in the company, which put itself up for potential sale last month.

Salesforce Won't Pursue Bid for Twitter

Cloud software company says the social-media company isn’t the ‘right fit’

Oct. 14, 2016

Salesforce. com Inc. said it won’t pursue a bid for Twitter Inc., ending weeks of speculation and sending shares of the social-media company down 6.4%.

Salesforce Chief Executive Marc Benioff in recent weeks had signaled his interest in Twitter to investors. At a company conference last week, he called Twitter an “unpolished jewel.”

But Salesforce investors reacted negatively to the idea, sending Salesforce shares down almost 6% on Oct. 5.

The stock move, and other feedback from investors, seemed to trigger second thoughts at Salesforce about the wisdom of a bid.

The Financial Times reported earlier Friday that Salesforce was no longer interested in Twitter. “It wasn’t the right fit for us,” the paper quoted Mr. Benioff as saying.

A Salesforce spokeswoman confirmed that the company wouldn’t make a bid for Twitter. Salesforce shares rose 6.2% following the news.

Twitter to Cut 9% of Workforce as Revenue Growth Slows

Twitter Inc. posted another quarter of slowing revenue growth Thursday and said it would slash 9% of its global workforce, in its first report since recent takeover interest from potential suitors including Salesforce.com Inc. dissipated.

The social-media company’s revenue rose 8.2% to $615.9 million, its smallest gain and ninth straight period of slowing growth. Analysts expected revenue of $606 million.

Twitter recorded a loss of $102.9 million, or 15 cents per share. Excluding certain expenses such as stock-based compensation costs, Twitter posted a profit of 13 cents a share, compared with the average analyst estimate of 9 cents per share.

Twitter’s monthly active users totaled 317 million in the third quarter, up just 1.7% from the second quarter.

The company said its restructuring and workforce cuts focus primarily on reorganizing its sales, partnerships and marketing efforts as it seeks to become profitable in 2017.

Twitter COO Bain Exits; Noto Ascends to Post

Noto has served as CFO since July of 2014

Nov. 9, 2016

Twitter Inc. on Wednesday said Adam Bain would step down as chief operating officer to explore opportunities outside the company, and it tapped Chief Financial Officer Anthony Noto, who has risen quickly through the social-media service’s ranks, to replace him.

The shake-up could further throw Twitter into turmoil as it struggles to regain momentum. Shares in the company, battered 17% so far this year, lost another 3.3% after hours to $18.50.

Mr. Noto, who has served as CFO since July of 2014, will continue to manage the live-content business, and assume responsibility for Twitter’s revenue-generating organizations including global advertising sales, data, revenue product, and MoPub, as well as global partnerships and business development, effective immediately.

Mr. Bain will assist in the transition over the coming weeks.

Twitter said it would begin a search for a new CFO, but Mr. Noto will continue as in the role until a new one is appointed.

Mr. Bain, a well-liked senior executive, had once been considered for the chief executive position but was made COO when the top reins were handed back to Jack Dorsey .

Mr. Noto, too, had emerged at one time as a front-runner for the CEO position.

Twitter CTO And VP Of Product Depart, Continuing Executive Churn

Dec 20, 2016

After Twitter's COO Adam Bain stepped down last month, the nest has continued to shed executives.


On Tuesday, Twitter CTO Adam Messinger, who joined the company five years ago, and a VP of product Josh McFarland announced separately that they are departing the company. Messinger, who served as CTO for nearly four years and previously was vice president of development at Oracle, announced in a tweet on Tuesday that he is leaving his role and will "take some time off." Messinger did not announce any plans to join a different company. Meanwhile, McFarland, who joined Twitter two years ago as part of the acquisition of the digital advertising business TellApart and served as VP of product for nine months, will join venture capital firm Greylock Partners as an investor. For now, Twitter's engineering vice president Ed Ho will oversee all product and engineering teams, reporting to Twitter cofounder and CEO Jack Dorsey, according to reports.

The turnover injects more uncertainty into Twitter's quest to become a tool for the masses. The rate of Twitter's management turnover makes it challenging for the company to boost the sagging confidence of many investors and employees. And the shuffle raises questions about the sustainability of Dorsey's dual CEO role. (Dorsey continues to serve as CEO of payments company Square , which he also cofounded.) While Twitter recently announced Keith Coleman, founder of Yes Inc. with a decade of experience at Google, as its new head of product overseeing the core service, Coleman is Twitter's fifth product head since 2014. Its previous head of product, Kevin Weil, departed to run product for Instagram in January.

The company has not yet hired a full-time CFO to replace Noto, who has assumed Bain's former role as COO. Early this year, Dorsey rewarded a number of top executives, including Messinger, with more equity in a push to retain key executives. In February, Messinger was awarded 1.25 million restricted stock units. Twitter did not respond to a request for comment in time for publication.

Internal morale has also been dampened by recent layoffs, cost-cutting efforts and takeover talks with companies like Salesforce, which didn't end up resulting in a sale. The company said in October it would lay off 9% of its staff, about a year after laying off about 8% of employees, soon after Dorsey officially became CEO. Management flux also likely makes Twitter's remaining prospects as an acquisition target grimmer. Twitter's stock has fallen about 22.6% this year and about 36% since Dorsey officially returned as CEO last October. Twitter has gained about 10 million users under Dorsey, fueling some criticism that the product has not been evolving quickly enough under his watch.

Twitter made more than half a million people follow President Donald Trump

January 21, 2017

Twitter CEO Jack Dorsey on Saturday acknowledged that his company had made more than a half million people follow President Donald Trump.

“We made some mistakes,” Dorsey tweeted, adding that the errors had been corrected.

The apparent glitch occurred as Twitter automatically switched followers of the @POTUS presidential account to both the archived account of former President Barack Obama, @POTUS44, and to the @POTUS account now belonging to Trump.

The news followed complaints on Twitter from people saying they had unfollowed the @POTUS account because of the Trump transition but found themselves following him anyway.

“Even if you unfollowed @POTUS, @FLOTUS and @VP DOUBLE CHECK THAT TWITTER HAS KEPT IT THAT WAY. It forced me to follow Trump last night,” a user identifying as Nicole Froio tweeted Saturday.

Dorsey tweeted that, “Some people who unfollowed @POTUS in the past were mistakenly marked to now follow @POTUS.”

Some 560,000 people were affected, Dorsey said.

“It wasn’t right, we own it, and we apologize. No excuses,” he tweeted.

Obama has returned to his previous Twitter account, @BarackObama.

“Hi everybody! Back to the original handle. Is this thing still on? Michelle and I are off on a quick vacation, then we’ll get back to work,” Obama tweeted Friday.

Huge Botnet Found on Twitter

Cybersecurity experts have found two botnets on Twitter totaling 850,000 accounts. How many more exist?

Jan 20, 2017

The theme for this year's election has been fake news. But for social media, is the theme about to become fake followers?

Cybersecurity experts Juan Echeverria and Shi Zhou of University College London uncovered a rather sizable botnet on Twitter (TWTR) . The network of bot users -- or essentially fake users that are controlled by a single botmaster, "produce spam [and] provide fake followers for anybody willing to pay" -- accounted for 350,000 accounts.

According to their research, these bots were created in June and July 2013, have rarely tweeted and have very few followers. Why does this matter? Because as the bots lay dormant, they start to seem more like real users to the bot-detecting machines and algorithms that remove these types of accounts. The more legitimate they seem to become, the more valuable they are to the botmaster, because they can theoretically be sold for more.

Zhou and Echeverria uncovered another botnet too, this one consisting of a whopping 500,000 bots. Although they have not yet released the details, that's 850,000 bots that they have already found. How many more could there be?

It seems like plenty. Which raises questions as to how many users are real vs. how many users are fake, let alone accounts that are real but inactive. And it raises even more questions about its stagnant monthly active user growth.

Twitter Gets Gloomy Coverage As User Growth Stagnates

Jan 20, 2017

Twitter received a less than enthusiastic welcome at Pacific Crest Securities, which resumed coverage of the microblog site as it experiences stagnant user growth.

Pacific Crest analyst Andy Hargreaves, in a research note late Thursday, said the "fair value" of Twitter stock is 14. That's 15% below its current price and 46% below the price for its initial public offering three years ago, at 26 a share. Twitter stock fell 1.3% to 16.58 in the stock market today.

Hargreaves rated Twitter sector weight, or neutral. "Operational challenges in its core business combined with significant scale disadvantages and high management turnover put Twitter at a relative disadvantage to other large-cap peers," he wrote.

And it faces major rivals.

"Twitter's current strategy to expand its distribution of video holds meaningful potential, and we view it as an appropriate strategy to pursue," Hargreaves wrote. "However, execution will likely have to be superb to build a profitable model around the opportunity, and our optimism is tempered by management turnover, a part-time CEO, and the likelihood for growing competition from Facebook, Alphabet and ESPN."

Twitter is the leader in real-time conversations about global happenings, but slow user growth limits mass-market appeal.

"We do not see an easy solution to this problem, which suggests further stagnation is likely," Hargreaves wrote.

Twitter lacks scale in consumer engagement and data compared to its primary competitors, and has some limitations in the type of ad units it can sell due to a largely feed-based consumer experience

Twitter's user base has grown at just 3% in the past three quarters. Hargreave estimates Twitter will exit 2016 at just under 320 million users. That up 5% from 305 million entering the year. Twitter user growth was above 40% in 2013.

Last week, Twitter was downgraded to neutral from buy at UBS, which cited lower advertising revenue estimates and muted growth among monthly average users. UBS lowered its price target to 18 from 22.

Twitter is scheduled to report fourth-quarter earnings before the market opens on Thursday.

Analysts expect that the social media platform’s central presence during the election and its efforts with live video will give the platform a boost. But there is still a lingering question around the fundamentals of the platform and whether it can attract more users.

Here’s what to expect:

Earnings:

Analysts surveyed by FactSet expect Twitter to report earnings of 12 cents per share, down from 16 cents per share in the year-earlier period.

The Estimize consensus is for earnings of 14 cents per share.

The mean rating on Twitter of the analysts surveyed by FactSet is the equivalent of hold.

Revenue:

FactSet analysts expect Twitter to report revenue of $739.8 million, up from $710.5 million in the year-earlier period.

The Estimize consensus is for revenue of $739.5 million.


What to look for:

Analysts are largely not expecting any big surprises from Twitter’s results, but some see the potential for earnings to beat expectations.

Twitter’s results will likely be driven by events, including live event streaming and the U.S. presidential election, which not only sparked conversation on Twitter, but was the platform favored by then Republican candidate Donald Trump, say Wedbush analysts.

Analysts will be looking at Twitter’s monetization efforts surrounding live video, which includes partnerships with organizations such as the National Football League. Twitter’s live video products are now being overseen by Periscope Chief Executive Kayvon Beykpour, according to Recode.

Wedbush analysts expect sequential monthly active user growth -- a metric most investors will be focused on -- of 1.5% in the U.S. But even with a boost from live events or politics and product changes, they say the service is still unappealing to many users.

Twitter didn't provide guidance for the fourth-quarter. In its last earnings report, Twitter beat earnings expectations but posted slowing revenue growth and announced it was cutting 9% of its workforce.

Twitter Posts Anemic Revenue Growth Despite Political Stir

Shares of the social media company slide as top line grows just 0.9%

Feb. 9, 2017

Twitter Inc. sits at the center of American politics like no other company right now—and yet the social-media service can’t seem to profit from it.

Thursday, the company reported its 10th straight quarter of slowing revenue growth, up just 0.9% year over year. Its average monthly active users totaled 319 million for the quarter, up 2 million from the previous quarter.

Shares of Twitter dropped 11% to $16.67 in premarket trading.

Revenue in the fourth quarter, when political conversation and debate gave it new relevance, was $717.2 million, below analysts’ expectations of $740.1 million, according to Thomson Reuters.

For the quarter, Twitter recorded a net loss of $167.1 million, or 23 cents a share, compared with a loss of $90.2 million, or 13 cents, a year earlier.

Excluding certain expenses such as stock-based compensation costs, Twitter posted adjusted earnings of 16 cents per share, compared with the average analyst estimate of 12 cents per share.

Last year, Twitter became more relevant than ever thanks to now-President Donald Trump’s frequent use of the platform. During the presidential race, Mr. Trump often took to Twitter to air his foreign-policy plans and lash out against critics in the Democratic Party and the media. His constant use of Twitter has continued since his inauguration.

Mr. Trump is likely drawing a new breed of “passive, non-tweeting” users to the service, according to SunTrust analyst Rodney Hull. Other analysts say daily use of Twitter is on the rise, which could buoy Twitter’s revenue in the second half of this year as more of those people encounter and potentially click on ads they see on service.

“The whole world is watching Twitter,” Chief Executive Jack Dorsey said in an earnings call Thursday morning. “While we may not be currently meeting everyone’s growth expectations, there is one thing that continues to grow and outpace our peers: Twitter’s influence and impact.”

Politics aside, the fourth quarter capped a turbulent year for the social-media service, which faced a botched potential acquisition, growing criticism over lax abuse policies and the departure of more than a dozen top executives, including its chief operating and technology officers. In October, Twitter said it would slash 9% of its workforce, part of a broader effort to focus more on profitability than growth.

Mr. Dorsey faces an array of other challenges, including stiffer competition for ad dollars from Facebook Inc., Pinterest and Snap Inc., expected to go public this year. Data firm eMarketer expects Twitter’s share of the online ad market to shrink slightly to 1.1% this year.

Twitter, which has posted net losses every quarter since going public, has set a goal of “driving toward” profitability in 2017.

Twitter downgraded to Underperform at Cowen and Company, Raymond James

• Cowen and Company recalculates from Market perform, attributing Twitter's steeply lower forecasts on the near-term, heightened competitive challenges and strategic uncertainty. Target from $15 to $12.
• Raymond James notes an increasingly challenging advertising environment leading to greater competition, as well as relatively uninspiring MAU growth despite positive DAU gains. Considers fair value $10, downgrades from Market perform.

Twitter target reduced to $10 at Morgan Stanley

• From $13.50 prior, analyst Brian Nowak notes greater advertising revenue declines are implied through Twitter's offered guidance, calculating 12% Y/Y and 15% Y/Y decreases in the segment for Q1 2017 and FY 2017, respectively.
• Further cites combination of accelerating digital advertising dollar competition observed in January (earnings call transcript) with firm's estimates of declining overall time spent per U.S. mobile user as challenges.
• Underweight rating reiterated.

Twitter, Inc. PT Lowered to $18 at FBN Securities

FBN Securities lowered its price target on Twitter, Inc. to $18.00 (from $19.00) while maintaining a Outperform rating.

Twitter, Inc. PT Lowered to $14.50 at BofA/Merrill Lynch

BofAMerrill Lynchh lowered its price target on Twitter, Inc. to $14.50 (from $16.00) while maintaining a Underperform rating.

Analyst Justin Post comments "While we are encouraged with the continued progress on user engagement for active users, the limited MAU growth, monetization challenges, and rising competition will continue to present challenges in 2017. Management looks to recapture ad budgets based on the recent platform and engagement improvements, but it could take 3-4 quarters before there is a potential revenue impact. Executive churn also raises execution risk and strategic uncertainty, in our view. We are lowering our PO to $14.50 based on 12x 2018 EV/EBITDA (discount to peers at 13x based on lower growth), and reiterate our Underperform."

UBS Downgrades Twitter, Inc. (TWTR) to Sell

UBS downgraded Twitter, Inc. from Neutral to Sell with a price target of $12.00 (from $18.00).

Analyst Eric Sheridan comments "In the past, we have made the argument that Twitter would need "two wings" to succeed (user growth/engagement & robust ad $s). In light of its Q4 earnings report (& mgmt's initial take on '17), we see Twitter as struggling to increase a mix of user time & mainstream adoption (despite being at the forefront of many real-time global events) & needing to re-position its ad business around a smaller cohort of ad products (driven by video) in the face of hyper-competition for branded ad $s targeted at digital video by GOOG, FB/Instagram, etc. Our downgrade to Neutral (a month ago) was predicated on an even balance between a worrying operational outlook (based on our extensive ad industry checks) & potential strategic alternatives (as the press – WSJ, CNBC – have reported extensively). Going forward, we now see '17 as a year of revs growth struggles, some benefits from cost cutting (unlikely to get much investor weighting) & a valuation that remains demanding (even if non-GAAP metrics are employed)."

Wedbush Skeptical Twitter Inc Can Deliver Profits to Shareholders; Trims Price Target

Twitter Inc shares were falling 12% yesterday after a fourth-quarter print revealed a revenue miss, MAU growth shortcoming, and a loss in advertiser interest that has Wedbush analyst Michael Pachter increasingly wary on the company’s future prospects. On the heels of a rough fourth-quarter earnings release, the analyst reiterates a Neutral rating on shares of TWTR while trimming the price target from $14 to $13, which represents a 20% downside from current levels.

Pachter believes “Despite a sustained acceleration in DAUs and double-digit engagement growth, the shortfall in advertising revenue highlights a lagging ROI proposition for advertisers relative to peers at least for the time being.”

Twitter exploring premium subscription service

Mar 24, 2017

Twitter Inc. is exploring a subscription-based premium service for professionals, which could create an important new revenue stream for the beleaguered company.

Twitter reported 319 million monthly active users in its quarterly earnings report last month, but user growth has been slow over the past few years, falling far behind rival social network Facebook Inc. It has also struggled to turn a profit amid middling ad revenue.

To find out the viability of a subscription service, Twitter is conducting a survey among some users “to assess the interest in a new, more enhanced version of Tweetdeck,” spokeswoman Brielle Villablanca said in a statement Thursday. The Tweetdeck app provides a more customizable interface, and was acquired by Twitter in 2011.

“We’re exploring several ways to make Tweetdeck even more valuable for professionals,” Villablanca said.

According to a screenshot of the survey, the premium version would be aimed at marketers, journalists and professionals, and “will provide valuable viewing, posting and signaling tools like alerts, trends and activity analysis, advanced analytics, and composing and posting tools all in one customizable dashboard.”

Neither the survey nor the statement indicated that Twitter would charge charging for normal accounts.

Get Ready for Another Grim Quarter for Twitter

The social-media site is expected to suffer declines in revenue, user engagement and advertising

April 25, 2017 1:25 p.m. ET

Twitter Inc. is a perfect case study in the difference between fame and fortune.

“The whole world is watching Twitter,” Jack Dorsey, Twitter’s chief executive, said in February. That is thanks to President Donald Trump.

Yet that exposure hasn’t done much for Twitter’s top and bottom lines. Even amid a revamped advertising strategy and efforts to grow its data-licensing business, Twitter’s problems appear to have only become more challenging heading into Wednesday’s earnings report. And investors have typically been an unforgiving bunch on earnings days, with Twitter’s shares falling after seven of the past eight quarterly results, averaging a 10% drop.

Analysts surveyed by FactSet expect Twitter to report a first-quarter loss of 21 cents a share, compared with a loss of 12 cents a share a year earlier. Adjusted earnings, which exclude stock-based compensation, are expected at 2 cents a share.

Twitter has told investors it is trying to position itself for profitability in 2017. No wonder it has framed its messaging that way; Twitter’s first-quarter revenue is expected at $517 million, down 13% from a year earlier. That would mark its first year-over-year revenue decline as a public company.

Not only is Twitter struggling to grow its user base, but people already on the platform appear to be less engaged with it. Twitter’s user engagement on mobile, measured by time spent by monthly active users on smartphone devices, is expected to have dropped by 20% in the first quarter from a year earlier, according to Morgan Stanley , which cited comScore data. That is an ominous sign. About 90% of Twitter’s global advertising revenue comes from mobile, according to research firm eMarketer Inc.

Making matters worse, Twitter was outbid by Amazon.com Inc. for the National Football League streaming rights to 10 Thursday night games in the upcoming season. Twitter has hopes that its live-video strategy will attract more people to its site and the NFL games it broadcast last year drew mostly positive reviews.

And then there is overall advertising revenue, which dropped slightly at the end of last year and is expected to fall much more in 2017. Morgan Stanley expects advertising revenue will drop by about 16% on average over the next four quarters compared to a year earlier.

Even valuation is not that exciting for Twitter. The shares fetch 43 times projected earnings over the next 12 months, far higher than the forward multiples of Facebook Inc. or Google parent Alphabet Inc.

This bird is still feeling blue.

Twitter Revenue Slides for First Time Ever

April 26, 2017

Twitter Inc. on Wednesday reported its first quarterly decline in revenue since going public, highlighting the stagnation the social-media company is battling.

Still, results weren't as bad as the market had expected, vaulting shares 11% to $16.20 in premarket trading. As of Tuesday's close, Twitter shares had slipped 17% in the past 12 months.

Twitter's revenue in the first quarter declined 8% to $548.3 million, compared with analyst expectations of $511.9 million, according to Thomson Reuters. Twitter posted an overall loss of $61.6 million, or 9 cents per share. Excluding certain items, the company posted earnings of 11 cents a share, above the average analyst estimate of a penny a share.

Twitter said it added just 9 million new monthly users during the first quarter, bringing its total user base to 328 million. Many analysts expected Twitter to add around 2 million monthly users in the quarter, with one million coming from the U.S. Twitter has been making changes to its platform to rid it of users who harass others as it seeks to add to its user base.

Twitter, which has posted net losses every quarter since going public in late 2013, has set a goal of "driving toward" profitability in 2017.

To achieve its goal, Twitter needs to squeeze more money out of each user. Currently, Twitter earns about half as much per user as Facebook Inc., "and we are not sure it can close the gap entirely," RBC Capital Markets analyst Mark Mahaney said in a note ahead of Twitter's results.

And Facebook and Snap Inc., the parent company of Snapchat, which went public in March, are increasing the competition for ad dollars. Data firm eMarketer expects Twitter's share of world-wide digital ad spending to shrink slightly to 1% this year, and Twitter's share of the mobile ad market to also contract to 1.5% this year.

Twitter's global ad revenue in the first quarter fell 11% to $473.8 million from a year earlier. Advertising makes up about 85% of the company's revenue.

One of the bright spots in Twitter's advertising effort has been in video. In the fourth quarter last year, when Twitter was benefiting from the U.S. presidential election and its deal with the National Football League, the company streamed 600 hours of live video from its partners.

But Twitter's second quarter is off to a challenging start already. In early April, Amazon.com Inc. outbid Twitter for the National Football League streaming rights to 10 Thursday night games in the upcoming season.

For the second quarter, Twitter projected adjusted earnings before interest, tax, depreciation and amortization of between $95 million and $115 million -- less than the $141 million analysts expect, according to FactSet.

Jack Dorsey buys $9.5 million in Twitter stock while continuing to sell Square

Apr 28, 2017 7:09 p.m. ET

Twitter Inc. stock jumped about 1% in late trading Friday after Chief Executive and co-founder Jack Dorsey tweeted that he had purchased more than 500,000 shares of the company.

https://twitter.com/jack/status/858058486730465280

Dorsey’s tweet was a reply to one he sent in February, when the Twitter CEO posted a link to an SEC filing that showed he had purchased more than 400,000 shares, spending about $7 million. An SEC filing Friday afternoon showed that Dorsey paid $16.62 a share for the latest shares, for a total purchase price of slightly more than $9.5 million.

Dorsey can afford it, as he has been selling vested shares in Square Inc., the other San Francisco company he co-founded and leads as CEO. Dorsey made his February purchase after the planned sale of about $11 million in Square stock.

Since then, Dorsey’s planned Square sales have continued at two-week intervals, according to Securities and Exchange Commission filings that show five separate sales of batches of 381,500 shares apiece since his last Twitter stock purchase. Based on the average weighted share prices reported in the documents, Dorsey has sold more than $31 million worth of Square stock in that time.

Dorsey didn’t receive the best deal possible on Twitter shares at $16.62, as that price was reached thanks to a combined 13.3% gain on Wednesday and Thursday after the social-networking company showed off long awaited user growth in an earnings report Wednesday morning.

After Friday’s purchase, Dorsey owns more than 16 million shares in Twitter. That’s still less than he had after the company went public in 2013, when Dorsey held more than 22 million shares, thanks to a large sale of about 6.8 million shares in 2016.

Even after a raft of price target increases for Twitter following Wednesday’s earnings report, the average price target among analysts tracked by FactSet is $15.04, implying downside of more than 8% from Friday’s closing price. Only four of the 36 analysts covering Twitter rate the stock a buy, according to FactSet, with the majority labeling the stock the equivalent of hold.

Twitter Inc. is scheduled to report second-quarter results before the market opens Thursday. Here are the key points to watch:

REVENUE FORECAST: Twitter is expected to record $536.6 million in revenue, down about 11% from the previous year, according to S&P Global Market Intelligence. That would mark the second year-over-year decline in quarterly revenue since the social-media company went public in November 2013.

EARNINGS FORECAST: Analysts expect Twitter to earn 5 cents a share, excluding certain items like stock-based compensation. That is down from 13 cents a year earlier. Under generally accepted U.S. accounting rules, or GAAP, the company had a loss of $107 million a year ago.

USER GROWTH: Analysts want to see whether the nine million new monthly users Twitter reported three months ago was a blip. The growth was the strongest since the first quarter of 2015, and it was driven partly by activity around the U.S. presidential election. Analysts surveyed by FactSet expect Twitter to post 328.8 million monthly active users, nearly flat from the previous quarter. “We would view any deceleration in the growth of [daily active users] as a negative, suggesting that Twitter’s efforts to simplify the product have had only a limited impact,” Wells Fargo senior analyst Peter Stabler said in a research note. Twitter has made a more concerted effort to crack down on harassment, but it isn’t clear yet whether shutting down accounts is helping or hurting user growth.

LIVE VIDEO: An increasingly important segment of Twitter’s business is live video. Early indications suggest Twitter could be seeing encouraging traction with video advertisements, according to Shyam Patil, an analyst at Susquehanna. During the second quarter, Twitter announced a range of live-streaming video deals with companies including BuzzFeed, Vox Media and MLB Advanced Media. Still, live video content remains challenging for average users to find, according to Mr. Stabler. Meanwhile, continued declines in traditional content, such as promoted tweets, will likely more than offset video efforts for the rest of the year, according to Kip Paulson, an analyst at Cantor Fitzgerald.

Twitter Struggles to Add New Users, Sending Shares Down

Social-media company posts second quarterly decline in revenue since going public

July 27, 2017

Twitter Inc. on Thursday reported its second quarterly decline in revenue since going public and showed no growth in users from the prior quarter, stressing the significant challenges the social-media company faces in refocusing its advertising efforts and attracting people to its platform.

Revenue in the second quarter declined 5% to $574 million.

Excluding certain expenses such as stock-based compensation, Twitter said it earned 8 cents a share, unchanged from the prior year.

Twitter said the total number of people who use its product monthly remained at 328 million, which was flat compared with the prior quarter. Twitter said daily users grew 12% from a year ago, though the company doesn’t disclose the base number of people.

Analysts expected Twitter to add fewer than a million monthly users in the second quarter, according to FactSet.

“It’s clear the boost to user growth and engagement from Trump’s election was a one-time deal,” said James Cakmak, an analyst at Monness, Crespi, Hardt & Co.

Three months ago, Twitter posted a surprisingly robust bump in the number of people who used its product monthly. Analysts had speculated as to whether the 9 million increase was driven mainly by activity around the U.S. presidential election or Twitter’s efforts to attract more engaged users. Prior to that quarter, Twitter had been adding 5 million or fewer users each quarter for nearly two years.

Meanwhile, Twitter has been taking steps to curb harassment, but it isn’t clear whether the effort is helping or hurting its user growth.

Twitter, which has posted losses every quarter since going public in November 2013, has set a goal of “driving toward” profitability in 2017, a goal that partly will fall on the shoulders of new financial chief Ned Segal, who joins in August.

Its inability to add a significant number of engaged users ratchets up the heat as it tries to turn eyeballs into cash.

Live video has emerged as an important part of its advertising strategy. Twitter’s global ad revenue in the second quarter fell 8%. Advertising makes up about 85% of the company’s revenue.

For the second quarter, Twitter reported adjusted net income of $56.4 million, or 8 cents a share, down from $59.5 million, or 8 cents a share in the year-ago period.

For the third quarter, Twitter projected adjusted earnings before interest, tax, depreciation and amortization of between $130 million and $150 million. Analysts polled by FactSet were expecting Twitter to guide adjusted earnings of $146 million for the quarter.

Twitter Earnings Preview: What to Watch

Oct. 25, 2017

Twitter Inc. is scheduled to report third-quarter results before the market opens on Thursday. Here are the points to watch:

REVENUE FORECAST: Twitter is expected to record $587 million in revenue, down about 4.7% from the previous year, according to analysts surveyed by FactSet. That would mark the third straight year-over-year decline in quarterly revenue, the social-media company’s worst performance since going public in November 2013.

EARNINGS FORECAST: Analysts expect Twitter to earn 6 cents a share, excluding items such as stock-based compensation. That is down from 13 cents a year earlier. Under generally accepted U.S. accounting rules, or GAAP, Twitter is expected to post a loss of $80 million in the third quarter, analysts say, compared with a loss of $103 million a year ago.

USER GROWTH: Twitter’s user growth has been lumpy this year. In the first quarter, Twitter added 9 million monthly users; then user growth was stagnant in the second quarter. Analysts surveyed by FactSet expect Twitter to have turned in a similar performance in the third quarter, with an estimated addition of just over 1 million monthly users. Analysts will also be looking for any signs of how daily usage has changed. In previous quarters Twitter touted its daily growth without providing the raw number, a move that spurred an inquiry from the Securities and Exchange Commission.

BAD ACTORS ON TWITTER: Twitter is under scrutiny on multiple fronts for how it handles problem accounts on its social network, in part because the company has historically taken reactive measures to rein in bad actors. Now, analysts are questioning whether a crackdown on bad behavior will require Twitter to pull a significant number of accounts from the network. In late September, Twitter said bots, or automated accounts, contributed to the spread of misinformation on its platform during the election, partly orchestrated by 201 accounts on its service linked to Russian actors.

• Twitter reports revenue of $590 million vs. $586.7 million expected in a Thompson Reuters survey of analysts.
• EPS (non-GAAP diluted): 10 cents vs. 6 cents expected in the Thompson Reuters consensus estimate.
• Monthly active users (MAUs): 330 million vs. 330.4 million, according to Street Account.

Twitter Overstated Number of Users for Three Years

Oct. 26, 2017

Twitter Inc. on Thursday said it overstated its number of users for the past three years, even as it reported modest user growth for the third quarter.

The social-media company’s shares jumped nearly 14% in early trading after it reported a narrower loss in the third quarter and raised its earnings forecast for the fourth quarter.

“Our work to increase relevance and make Twitter easier is making an impact,” Twitter Chief Executive Jack Dorsey said on the company’s earnings call.

Mr. Dorsey attributed the user growth to improvements to the company’s short-messaging service that it made in the past quarter, noting that Twitter is focusing increasingly on personalizing the content that appears in users’ feeds.

For years, content in the timeline was listed chronologically without algorithmic tweaks, but now the company is expanding its team of artificial intelligence specialists responsible for determining new content users might want to see.

Meanwhile, Twitter said it realized during the third quarter that it had been including users of a service for third-party apps as monthly users that should not have been counted, a spokeswoman said.

Twitter restated its users for the past three quarters -- revising them down by one million to two million -- but said it didn’t have user data going back further than that.

Twitter in the third quarter added four million monthly users, beating analyst expectations of just over one million, and bringing its total of monthly users to 330 million. According to adjusted numbers for prior quarters, however, the number of Twitter’s monthly users actually shrank in the second quarter for likely the first time since 2015, by one million users. Previously Twitter had said its user growth was flat in the second quarter.

Revenue in the third quarter declined 4.2% to $590 million, compared with $616 million a year earlier. Twitter narrowly beat analyst revenue expectations of $587 million, according to FactSet. Under generally accepted U.S. accounting rules, or GAAP, Twitter posted a loss of $21.1 million, its smallest loss as a public company, compared with a loss of $103 million a year ago.

Twitter’s error in counting users tarnishes the company’s credibility during a critical period. The growth of rival Snap Inc.’s Snapchat has increased competition for advertising dollars. Twitter is facing scrutiny on multiple fronts for how it handles problem accounts on its social network, including people posting abusive content and alleged Russian manipulation.

Twitter said the error in counting monthly users didn’t impact its measure of daily users, which grew 14% in the quarter. Twitter doesn’t disclose its raw number of daily users, but said fewer than half of its 330 million monthly users log on daily.

The service that erroneously counted the monthly users, Digits, allowed people to log into other apps using their credentials from Twitter. Alphabet Inc.’s Google bought Digits from Twitter earlier this year as a part of a larger acquisition of developer tools.

Twitter believes the impact of the error was smaller before this year because Digits had fewer users, a spokeswoman said. Twitter said it doesn’t have the data to reconcile its user figures going back further than the end of 2016 because of its policy of not storing certain kinds of information long-term.

For the fourth quarter, Twitter projected adjusted earnings before interest, tax, depreciation and amortization between $220 million and $240 million -- a more ambitious target than the $197 million analysts expect, according to FactSet. If Twitter hits the high end of that range in the fourth quarter, it could record its first quarterly profit since going public in late 2013, a spokeswoman said. A year ago, Twitter publicly articulated the goal of “driving toward” profitability in 2017.

Bloomberg Media and Twitter Launch First-Ever 24/7 Global Social News Network - TicToc by Bloomberg

Dec. 17, 2017 7:42 p.m. ET

NEW YORK and SAN FRANCISCO, Dec. 17, 2017 /PRNewswire/ -- Bloomberg Media and Twitter today launched TicToc by Bloomberg, the first-ever 24/7 global news network built for a social media platform that targets the next generation of on-the-go, mobile-first news consumers. TicToc by Bloomberg combines the global news gathering capabilities of Bloomberg's 2,700 journalists and analysts across 120 countries, with the digital power and immediacy of Twitter, one of the world's fastest and primary news distribution channels. To view TicToc by Bloomberg, follow @tictoc or visit live.twitter.com/tictoc.

The first iteration of TicToc by Bloomberg will feature a mix of live video and reporting from Bloomberg journalists around the world, as well as breaking news content from consumers, curated and verified by Bloomberg editors with a real-time distillation of the related conversation on Twitter. The news experience is designed to be interactive, rich with Twitter content and consumable on any device. Coverage will focus on general interest news worldwide.

"We're seeing a shift in the media landscape today: more content companies are partnering with platforms to create hybrid businesses that better serve consumers and society. With TicToc by Bloomberg, we're fusing the best of Bloomberg and Twitter to build a fast and credible modern news experience," said Bloomberg Media CEO Justin B. Smith. "The launch of this new network further reinforces our strategy of driving innovation through exciting new products and services that touch a broad audience around the world."

"It's early days, but what makes TicToc by Bloomberg unique is that consumers will be able to watch live news and the conversation around it at the same time, all while a dedicated team of Bloomberg editors verifies the facts. We're leveraging our journalism and data to reach and inform an intelligent audience on Twitter around the world," said Bloomberg Editor-in-Chief John Micklethwait.

"Twitter is where people go for breaking news, and now our global audience can turn to TicToc by Bloomberg at any time to see what's happening in the world no matter where they are," said Anthony Noto, Twitter COO. "Combining the journalistic integrity of Bloomberg with the speed and global availability of Twitter makes this a collaboration we are really excited about."

TicToc by Bloomberg recreates the visual presentation of news for a mobile, social world through the use of video, data, and graphics. Users will have access to two types of news content:
The global news update will be available for replay and refreshed each hour with evolving stories from around the world. Relevant Tweets, curated and verified by Bloomberg, will run below the video programming, allowing consumers to see accurate Tweet conversations around the news.

Seven sponsors have signed on as the Founding Partners of TicToc by Bloomberg: AT&T Business, CA Technologies, CME Group, Goldman Sachs, INFINITI, SAS, TD Ameritrade. TicToc by Bloomberg will feature branded native content and unique integrations woven into the video programming, created by Bloomberg in partnership with each sponsor.

How to Find TicToc by Bloomberg: Follow @tictoc on Twitter to access the latest video news coverage and for the shareable clips of the top news of the hour. Consumers can also watch TicToc by Bloomberg via live.twitter.com/tictoc on desktop and mobile, and participate in the conversation by Tweeting with #tictocnews. TicToc by Bloomberg is available in English at launch, and is free and accessible worldwide, to logged-in and logged-out users on Twitter.

Twitter's No. 2 Resigns to Become Chief Executive of SoFi

January 23, 2018

Twitter Inc. Chief Operating Officer Anthony Noto has resigned to accept the role of chief executive officer at financial technology company Social Finance Inc. Twitter’s shares slipped the most in almost two months.

Noto will assume the post at SoFi in March. His departure comes at a pivotal time for Twitter, which is finally showing results from its turnaround efforts. Since beating Wall Street’s estimates in late October, the company has been upgraded by at least six analysts, who have cited more user engagement and improvements in Twitter’s live video advertising.

Noto’s take-action attitude has been an important balancing presence to CEO Jack Dorsey’s introverted leadership style, according to people familiar with the matter. Losing him may deal a blow to the company’s positive momentum.

Twitter hired Noto, 49, as CFO in 2014 with a stock award worth more than $60 million, following a career in banking at Goldman Sachs Group Inc., where he helped Twitter go public. He served as the social-media company’s finance head before taking over as chief operating officer in 2016. Noto has played a leading role in directing the company’s product vision, especially in shaping the platform’s future around live video streaming.

"He has been reassuring force for investors even amidst the stock’s volatile performance over the past several years," Anthony DiClemente, an analyst at Evercore ISI, wrote in a note. "Investors may not ascribe similar confidence in a replacement lacking the unique combination of established track record within Twitter as previous Wall Street experience."

Twitter fell as much as 3.9 percent to $22.41, the biggest intraday drop since Nov. 29.

Twitter earnings: Is Facebook’s pain Twitter's gain?

Feb 7, 2018

Earnings: Analysts on average expect Facebook to post GAAP earnings of 2 cents a share, according to FactSet, up from a 23 cents loss a year earlier. On an adjusted basis, they predict earnings per share of 14 cents, down from 16 cents in the year-earlier period. Contributors to Estimize, which crowdsources estimates from analysts, fund managers and academics, project 16 cents per share in adjusted earnings.

Revenue: The FactSet consensus calls for revenue of $687 million, down from $717.2 million a year ago. According to Estimize, the average estimate is $695.9 million.

What else to look for:

User growth is a key metric for Twitter. Analysts expect that Twitter added 3 million monthly active users relative to the September quarter, bringing its total up to 333 million. Investors will be looking for commentary from management on what drove user-count metrics for the quarter, including live video efforts as well as Twitter activity by President Donald Trump. Last quarter, the company admitted that it overstated user counts in the past.

“We would also focus on commentary around daily-active-user growth, which accelerated to 14% y/y in 3Q, marking the fourth straight quarter of double-digit growth,” wrote Raymond James analyst Aaron Kessler, who has an underperform rating on the shares. Twitter doesn’t give actual numbers for its daily-active-user count, but rather percentage gains.

Twitter’s user metrics will also be in focus given a recent New York Times report alleging that a company called Devumi sold public figures fake followers who would “like” and retweet their posts automatically. Many of those followers disappeared after the report, and Twitter may be pressed to answer questions about its knowledge of fake accounts on the platform and what it’s doing to clamp down on them.

Twitter Posts Its First Profit

The company had posted losses every quarter since going public in November 2013

Feb. 8, 2018

Twitter reported its first profitable quarter as a publicly traded company, a welcome piece of news for a company that has long sought to make a viable business out of the eyeballs following its feeds.

Twitter had posted losses every quarter since going public in November 2013. It had set a goal of “driving toward” profitability in 2017.

The company Thursday said revenue in the quarter rose 2% from a year earlier to $731.6 million. Analysts polled by FactSet had expected $687 million in revenue.

Twitter reported a profit of $91.1 million, a swing from a loss of $167.1 million a year ago.

Twitter said the number of people who use its product monthly rose 4% from a year ago to 330 million but was flat from the previous quarter. Twitter said daily users grew 12% from a year ago, though the company doesn’t disclose the base number of people.

Analysts had expected Twitter to report having 333 million average monthly users, according to FactSet.

Twitter’s global ad revenue rose 1%. Advertising makes up more than 85% of the company’s revenue.

In the fourth quarter, Twitter streamed more than 1,140 live events, up from the more than 830 that it said it live-streamed in the third quarter.

For the current quarter, Twitter projected adjusted earnings before interest, tax, depreciation and amortization of between $185 million and $205 million— in line with the $192 million analysts expected.