Paying Attention. If you spend any time at all on Twitter, you quickly become amazed at the sheer speed and velocity of information that runs through the “Twittersphere”. Pick a topic to follow, and you find, inevitably, that Twitter delivers the news on that topic faster and from more different perspectives than any other media, social or mainstream. The speed of Twitter is faster than than the speed of most websites, television channels, radio stations, or other forms of media. Stuff is pushed out on Twitter and then then it’s picked up and “retweeted” by followers and the distribution of that item goes exponential (or viral, depending upon whether your selection of similes is mathematical or biological).
Yesterday, 28 April 2015, Twitter became a victim of the medium of communications it created. On a day on which Twitter was to release its quarterly earnings report, a financial intelligence company, Selerity, released a series of Tweets that contained information about Twitter’s revenues, earnings, and user figures. The Tweets came in advance of Twitter’s own release of its’ information and the result was nearly instantaneous and very dramatic. Twitter stock took a big hit (down 18% for the day) and trading in the stock was halted at Twitter’s request, according to a Tweet issued by the company at 3:01PM. If you were on Twitter yesterday, the news swept through the Twittersphere like a runaway train. The damage to the wealth of Twitter co-founders Jack Dorsey and Evan Williams was about minus $750 million for the two of them. That the company would be a victim of its’ own invention is irony on roids.
Investors have not been happy with Twitter’s pace of growth; perhaps these investors have set an unrealistically high bar for the company or perhaps Twitter’s early ascent created an atmosphere of performance expectations that would be tough to meet. For the most recently ended reporting period, Twitter’s revenues rose 74% and it is still a relatively young company with lots of headroom and new technology for growth. The business model is yet to be perfected, but there is much to like about Twitter and the future of the brand/franchise could be astounding. The addition of Periscope digital video to Twitter’s toolbox creates the possibility of instant distribution television networks and newscasting. The service has long been able to broadcast photographs (i.e. provide competition to Instagram) and in January, Twitter added private messaging so that groups can communicate behind closed digital doors about the messages and information moving through the service. They have also recently added a custom search engine (working with Google) to allow users to pinpoint the information they need as it flows through the Twittersphere.
How far down Twitter stock will go is unknown. The pessimists will continue to sell but I would not bet against them. The company has a very wide range of communications abilities, is still growing very rapidly, and the service is massively easy to access. Best of all: it is ultra portable and we all know how important portability and mobility is in today’s ultra-now world.
Despite a very rough Tuesday, the smart optimist might see this dip as what may later be defined as a historic buying opportunity.
Below, a ClickPak on Twitter’s rough day on Wall Street.
Twitter Misses Revenue Estimates (Source: Bloomberg)
CFO of Twitter Hits the Credibility Wall after Earnings Report (Source: Bloomberg)
Bloomberg Overview of Twitter Stock (Source: Bloomberg)
How A Tweet Caused Twitter Stock To Fall (Source: Boing Boing)
Twitter’s Stock Tanks (Source: Wired.com)
The Tweet That Knocked Twitter’s Stock Down (Source: Time.com)
A Twitter Wiki (Source: Wikipedia)