TWTR Stock: Why #TwitterLockOut Is Trending Today

Just a month after it purged more than 1 million fake accounts from its platform, Twitter Inc (NYSE: TWTR) appears to be making another round of lockouts in an effort to clean up its service and remove so-called “bot” accounts. On Wednesday morning, #TwitterLockOut was a top trend on Twitter’s platform, and some users are claiming Twitter is specifically targeting conservative users.

In its most recent earnings report, Twitter says its monthly active user count was negatively impacted in part due to “increased information quality efforts, which are our overall efforts to reduce malicious activity on the service, inclusive of spam, malicious automation and fake accounts.”

Twitter has not commented on the latest round of lockouts, but they come less than a week after special counsel Robert Mueller indicted 13 Russian nationals and accused them of using a “troll farm” to spread election propaganda on social media via fake accounts.

Twitter isn’t the only social media company working to improve its platform, and the short-term uncertainty for advertisers may have created an opportunity for Twitter. In fact, major changes by social media competitors Facebook (FB) and Snap (SNAP) could be driving business in Twitter’s direction.

Facebook has launched several new initiatives in 2018 designed to improve user experience and prevent abuse of its platform. Analysts anticipate the changes could disrupt Facebook’s advertising business, at least in the short term. Morgan Stanley predicts Facebook’s core ad load will decline by 4 percent in 2018.

At the same time, Snap is facing user backlash following its recent update to its Snapchat app. Citigroup downgraded Snap stock this week and said fallout from the app overhaul “could result in a decline in users and user engagement and could negatively impact financial results.”

According to GBH Insights head of technology research Daniel Ives, Facebook’s loss could be Twitter’s gain.

“A tailwind for Twitter in the near-term in our opinion is the Facebook News Feed overhaul, which is forcing publishers and online advertisers to dip their toe in the water on the Twitter platform and start to ramp up ad investments on this platform,” Ives says.

Ives says…

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