Twitter Inc TWTR investors enjoyed a big post-earnings pop last week, and shares are surging another 6.5 percent on Monday after the company disclosed that CEO Jack Dorsey purchased more than half a million shares of the stock. However, a surprise uptick in user numbers in the first quarter is still not enough for Argus analyst Jim Kelleher to recommend Twitter to clients.
Trump–Twitter, In Tandem
According to Kelleher, Twitters uptick in users could simply be tied to President Donald Trump and his affection for the platform.
“We believe that the inauguration of President Trump may have prompted some of his base of committed supporters to join Twitter. But this is unlikely to be a recurring event, unless the President’s approval rating improves,” Kelleher explained.
Despite a 3-million increase in monthly active users, Kelleher pointed out Q1 marked Twitter’s first-ever, double-digit declines in sales and adjusted EPS. Looking ahead, Twitter’s monetization process is only going to get increasingly difficult in the face of competition from Facebook Inc FB and Snap Inc SNAP, both of which are growing at much higher rates than Twitter.
Even with Twitter shares down 53.7 percent in the past two years, Kelleher says investors should be careful about buying the dip given the company’s potential for “sharp declines” in advertising revenue.
On Friday, Dorsey Tweeted that he purchased another $9.5 million in Twitter stock and has now bought exactly 1 million shares so far in 2017. Dorsey has been selling…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
