Twitter's (TWTR) COO Anthony Noto Rumored To Leave For SoFi

Twitter’s (NYSE:TWTR) Chief Operating Officer (COO) Anthony Noto is rumored to leave the micro-blogging platform for the consumer finance startup Social Finance (SoFi).

Per Reuters, which quoted The Wall Street Journal report, San Francisco-based SoFi has offered the role of Chief Executive Officer (CEO) to Noto. Notably, SoFi’s CEO position has been vacant since mid-September 2017.

Twitter’s Resurgence: Anthony Noto as Key Architect

Twitter is striving to retain executives, particularly in the mid- & senior-management level, over the last couple of years. However, Noto has been the most visible figure, apart from CEO Jack Dorsey, at the top-management level during the executive exodus.

Anthony Noto joined Twitter in 2014 and became COO in late 2016. Per recode, he has been the architect of the company’s offering of live video programming and its deal with the NFL in 2016 to stream Thursday Night Football games.

Market observers and analysts believe that Twitter will find it difficult to replace Anthony Noto due to the investor confidence he enjoys. According to Benzinga, which quoted Evercore ISI’s Anthony DiClemente, “Noto has not only acted as a constant presence but a reassuring force for investors during a time of volatility.”

We believe that it will be hard for Twitter to find someone of this stature within a short span. Moreover, Anthony Noto’s departure will definitely unsettle existing employees as well as investors. The anticipation is already affecting the stock, which fell 1.44% to close at $23.32 on January 22, following the news.

Twitter returned 40.4% in the past year substantially outperforming the industry’s rally of 29%.

Live Video Streaming: Key Catalyst

Live video streaming has resulted in an increase in tweet impressions. J.P. Morgan analyst Doug Anmuth believes that Twitter will be able to improve and leverage video and live streaming. The analyst expects Twitter’s daily active user (DAU) base to grow by 10%, which could lead to an 8% jump in advertising revenues.

Twitter’s focus on the live video feature is helping it improve user engagement. The company streamed 830 live events in the last quarter, with 74% reaching a global audience. The company also secured 30 new live deals. Increasing user engagement will surely result in more advertising revenues.

Zacks Rank & Other Stocks to Consider

Currently, Twitter has a Zacks Rank #2 (Buy).

The Trade Desk Inc. (NASDAQ:TTD) , MSCI Inc. (NYSE:MSCI) and Palo Alto Networks Inc. (NYSE:PANW) are stocks worth considering in the broader technology sector. All the three stocks sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Trade Desk, MSCI and Palo Alto Networks have a long-term expected earnings growth rate of 25%, 10% and 24.6% respectively.

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