- Twitter reported earnings and they were pretty good.
- But the surge in users driven by the pandemic did not sustain to the extent expected, I guess.
- Fundamentally, the company is improving its user experience as well as its advertising products rapidly.
- There’s still $2 billion in buybacks to go and Elliott Associates’ standstill ends early 2021.
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Yesterday Twitter (TWTR) got smashed on its earnings release. The market seems to be disappointed Twitter did not sustain the average monetizable daily active user growth (up 29% year-over-year) that it saw in previous quarters because of the pandemic. Covid receded in summer, it doesn’t make sense to sustain peak event growth anyway, and otherwise, the numbers were pretty good and I’m optimistic about some of the improvements that are being made. In some ways, the earnings call sounds like Twitter just discovered there is a real business case and it can be run as one. That’s seven years after its IPO.
I see the 16% drop in price as an opportunity to buy or add.
My original write-up of Twitter dates back to May 3, 2020. It has been an unusually strong trek upwards.
My last note on Twitter is from August 10, 2020, and at the time I wrote:
My initial assessment of the news is that it is a great opportunity to offload some Twitter at a 4% bounce. Don’t get me wrong I remain long-term bullish on Twitter and will maintain a position. I just think it is a nice opportunity to sell some. I initially added Twitter to the special situations portfolio at $27.84. It has added quite a bit of value in a short time frame. If you can offload at $38.89 it’s only just short of 40% appreciation. Meanwhile, I don’t understand how this news could be positive. If a transaction is announced/consummated I’m probably not going to like it.
That proved to be a good call only very briefly before Twitter continued to advance with my position now smaller.
