Twitter (TWTR) Unveils Threads To Make Tweetstorms Easier

Twitter Inc. (NYSE:TWTR) introduced Threads to make posting of tweetstorms easier for people.

The tweetstorm feature that the company confirmed testing on iOS and Android devices last month enables users to share several tweets in one thread. With the addition of the new feature, users can add tweets to an already posted thread.

Per TechCrunch, currently a maximum of 25 can be made in a thread. But the company expects to change the count depending on how it is adopted.

On the last conference call, talking about keeping up with the interests of people, CEO Jack Dorsey mentioned, “This is an area of experimentation. We're experimenting very, very quickly to figure out the right approach. And then as we learn more, bring that more into the timeline, and you'll see some of those experiments going forward.”

We note that Twitter has been making a lot of changes to its platform to make it more user-friendly. The company is focusing on boosting user growth rate and engagement levels by taking various measures to make tweeting easier and more expressive.

Last month, Twitter rolled out a 280-character limit for tweets, doubling it from the legacy 140 limit, after users from several corners of the world, such as Germany, complained of failure to express thoughts within the set limit.

Notably, shares of Twitter have gained 32.9% year to date, slightly outperforming the industry’s 30.4% rally.

What’s Worrying Investors?

However, Twitter’s lackluster user growth remains the primary concern for investors. In the last reported quarter, Twitter’s adjusted monthly average users (MAUs) of 330 million increased a marginal 1.2% sequentially and 4% on a year-over-year basis. On the hand, Facebook’s (NASDAQ:FB) MAUs were up 16% year over year to a staggering 2.07 billion.

Hard core Twitter users fear that change of features may result in loss of spontaneity and brevity that are unique to Twitter.

The company, on the other hand, is striving to uphold its sense of brevity. Per TechCrunch, in response to user’s apprehensions regarding cluttering of the timeline with longer posts, the company mentioned that in case of more than three tweets the thread will be truncated. In such a scenario, users will have to click on “Show this thread” option for viewing the full thread.

We believe that if the new features can translate to an increase in engagement levels, it will lead to higher ad revenues. This is very important for a company that is undergoing a slowdown in ad revenues, its primary growth driver. In the last reported quarter, advertising revenues were down 8% year over year.

Zacks Rank and Other Key Picks

Twitter carries a Zacks Rank #2 (Buy).

Better-ranked stocks in the broader technology sector include IPG Photonics Corporation (NASDAQ:IPGP) and NVIDIA Corporation (NASDAQ:NVDA) , both sporting a Zacks Rank #1 (Strong Buy). You can see You can see the complete list of today’s Zacks Rank #1 stocks here.

Long-term earnings growth rate for IPG Photonics and NVIDIA is projected to be 19.7% and 10.3%, respectively.

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