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Twitter Troubles Continue Unabated: More Executives To Quit

Published 05/30/2016, 07:55 AM
Updated 07/09/2023, 06:31 AM

Twitter, Inc (NYSE:TWTR) continues to face the loss of high-profile executives. After the departure of four key executives in January this year, last week Recode reported that chief of business development, Jana Messerschmidt, and chief of media and commerce Nathan Hubbard, will also be quitting.

Later, Twitter COO Adam Bain confirmed the news via a tweet and simultaneously announced that Twitter will be merging Amplify, Business Development & Media under one division, and Ali Jafari, currently serving as vice president of revenue partnerships, will lead the new division.

Loss of key personnel when the company is passing through one of its toughest phases isn’t making things any easier. Working with new people when just about everything is being overhauled does not bode well for the beleaguered micro blogging site.

Twitter troubles are plenty with no immediate solution in sight. User growth has been stagnating while the company is yet to turn up profits in its 10-year history. After user growth came to a standstill in the fourth quarter of 2015, Twitter did manage to record user growth in the first quarter of 2016, although it wasn’t an impressive number. Twitter’s users grew from 305 million monthly average users (MAUs) to 310 million MAUs, a jump of 1.6% sequentially.

However, investors were dismayed when Twitter said that “brand marketers did not increase spend as quickly as expected in the first quarter”. Brand marketing is the mainstay of Twitter’s advertising revenues, which in turn comprise nearly 90% of the total revenue. Moreover, expecting no near-term respite, Twitter provided its second-quarter revenue guidance of $590 million to $610 million, which was nowhere close to analysts' expectations.

Twitter, under second time CEO Jack Dorsey, has been trying new measures to counter the slowdown in user base and make the platform more engaging. From Moments to integration of Periscope, lifting the 140 character limit from direct messages while changing the way tweets are displayed, the company is trying hard to lure users. It has teamed up with Alphabet (NASDAQ:GOOGL) to make tweets appear in Google search, to woo the 500 million or so users to who do not log in but track tweets. The company also managed to strike a deal with NFL to live stream games on its platform, beating the likes of Facebook Inc (NASDAQ:FB) .

Moreover, Dorsey stressed on “hiring and investing in talent”. He himself had given away one-third of his stock worth $200 million to employees soon after being elected the CEO. Moreover, per media reports Twitter has been giving away extra restricted stock as well as paying cash bonus ranging from $50K to $200K to make employees stay longer with the company.

However, the changes haven’t been that striking if we go by the growth in user base since Dorsey took over as CEO in Oct 2015. Also, executive departures continue. If we go by the share price movement, it even paints a pretty bad picture. Twitter’s stock has lost almost 32% of its value so far in the year and is hovering at $15 lower than its IPO price of $19. Also, sharing a CEO with another company, Square inc (NYSE:SQ) isn’t doing Twitter any favor apparently.

Twitter is currently a Zacks Rank #3(Hold) stock.



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