Twitter Inc (NYSE:TWTR) has marked its first year as a public company. In terms of stock performance, the ticker has held up nicely in the last 12 months. The stock also compares favorably with its rivals at such a time in their public life. However, there are a number of red flags in the company that Bloomberg’s Sarah Frier discussed on “First Up”.
It is obvious that Twitter Inc (NYSE:TWTR)’s stock has remained strong over the last 12 months with significant gains in between. When compared with Facebook Inc (NASDAQ:FB) and LinkedIn Corp (NYSE:LNKD) at that time, there is not much difference in stock performance. That gives hope of better things down the road.
“[…] meanwhile the company’s losses are mounting. Costs are up as they try to expand their business, and the profit is further out. At the time of its IPO, people were expecting that profit would come in 2015. Now we think that would probably won’t come till 2017, according to analysts’ estimates. So, many challenges ahead for the company that people thought was going to be a rocket-shape,” stated Frier.
As Twitter Inc (NYSE:TWTR)’s rocket-shape appears to falter, there are questions about what the company may not have done right. It is known that the company is not growing its user numbers as quickly as investors expected. In fact, a slowdown has been recognized in the growth of Twitter’s user numbers. That raises concern among investors who thought that the company was going to be another Facebook Inc (NASDAQ:FB), which boasts more than 1.32 billion users.
“Twitter explained itself in such a way that it started up to be measured by monthly active user-count and that number has just been slow growth since its IPO […],” said Frier.
Although costs and user acquisition are the prominent challenges in Twitter Inc (NYSE:TWTR), Frier said it was too soon to tell whether the hype in the stock was over. She observed that Facebook Inc (NASDAQ:FB) and LinkedIn Corp (NYSE:LNKD) are currently much higher than they were at the IPO. However, their first year after the IPO appear almost the same as that of Twitter Inc (NYSE:TWTR). Twitter remained one of the most popular social media networks among users.
Coatue Management, led by Philippe Laffont holds over 5.8 million shares of Facebook Inc (NASDAQ:FB). Jat Capital Management, run by John Thaler owns about 7.33 million shares of Twitter Inc (NYSE:TWTR).