Dick Costolo (COS-tow-low as per the company website), Twitter’s embattled CEO has quit. The street applauded this mainly because Wall Street was looking at Twitter’s relatively slow growth and in typical fashion, blamed the CEO for not matching Facebook’s astronomical growth.
We have mixed feeling about this because the company, even though it will never be Facebook – which unfortunately happens to be the classic comparison – is doing the right moves. Twitter may never reach the active monthly users that Facebook has due to a number of reasons that we are not going to enter into in this short note, but nonetheless has developed an exceptional advertising platform just waiting to be fully utilised. This will most probably be accomplished through acquisitions such as Vine and Periscope that have already been executed, plus some new ones such as hopefully Snapchat and others that may not even be on the scene yet.
This will allow for cross-app utilisation of the advertising platform and the ability for the acquired companies to monetise far better than if the had tried it alone.
All this to say that the new Twitter CEO ( and we hope it will be Adam Bain, Twitter’s current head of Global Revenue and key figure in the development of the advertising platform ) will continue on the path of looking for synergies and be actively involved in pursuing acquisitions. This will inevitably please Wall Street as much as Facebook’s acquisition of whatsApp and Instagram.
Now the current opportunity: Twitter’s stock is hovering around a 52-week low and is currently unloved. We believe that this is the perfect entry point for the long-term investor. Twitter will never go away and has only one direction to go from here – up.
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