Twitter has a rise in the stock market

Twitter has a rise in the stock market 03/03/2021 - MADRID. Twitter shares are on the rise: They have risen more than 40% in the first two months of 2021, far outpacing the gains of their rivals. This unexpected rise has propelled the shares of this social media giant beyond even the level registered in its public offering for sale in 2013.

Twitter, which closed yesterday at $ 77.63, has more than doubled in the last 12 months, adding 130% to its value. During that period, Facebook shares have risen 35%. So what has made Twitter stocks desirable again after wandering the wilderness for several years? The answer: the strong profit momentum of the microblogging app and the company's ambitious growth plan, which is gaining a lot of steam.

For the quarter ending December 31, the number of daily Twitter users rose to 192 million from 187 million in the third quarter. This included an impressive million more users in the United States alone. Twitter generated a growth of around 20% in daily active users for five consecutive quarters and has predicted that it will do the same this quarter.

Behind these successes are Twitter's turnaround efforts, which began shortly after the 2016 US election. During that period, Twitter dramatically improved its product, tremendously moderated its content, and cleaned up its platform of hate speech and toxic content.

Strong user growth

With strong user growth, the company also informed investors, who were highly concerned, last week that the January veto of former US President Donald Trump from its platform is not having any negative impact. The permanent ban on tweets by Trump, the platform's most followed personality, triggered predictions of massive user losses among the 74 million Americans who voted for him. Clearly, that has not happened. In early February, Twitter told investors that the number of new daily users for January exceeded the average for that month for the past four years.

KeyBanc analyst Justin Patterson, one of the most optimistic about Twitter's stock, anticipates a "complete" recovery in Twitter's advertising numbers and continued success in increasing audience and advertiser engagement. Patterson assigns an overweight rating to the stock, and a target price of $ 80 per share.

Shares of Twitter received an additional boost last week when the company presented its three-year growth plan to analysts as part of its push to accelerate its new product launches amid criticism that CEO Jack Dorsey has been too slow in launching and testing new products.

The company's first 'Analyst Day' since 2014, celebrated on February 25, outlined a series of ambitious goals, including doubling revenue and adding more than 120 million new users in the next three years to reach at least 315 million by the end of 2023.

Newsletters

Twitter also plans to launch a newsletter subscription service and an audio product called Clubhouse-like Spaces, a rapidly expanding audio application valued at $ 1 billion in a recent funding round. The newsletter initiative, called Super Follows, is designed for influencers with large audiences and will provide the opportunity to get paid for their content.

The rally in Twitter shares shows that the company is managing to turn its platform into one that advertisers value more and more. Investors also like the company's new initiatives, which could drive further growth in its sales and user base.

Haris Anwar is a Senior Analyst at Investing.com