Will Twitter (TWTR) Ever Bounce Back?


Twitter Inc (NYSE: TWTR)

When it comes to tech stocks, one of my favorites to follow is Twitter. While it’s having a horrible time in the market at the moment, I still for some reason have faith in the stock; and I think we’re going to see positivity from it relatively soon. Here’s why…

Why Twitter Is Struggling

Before we get into why I think we’re going to see positivity from TWTR moving forward, I think it’s important to point out the reason the stock is struggling so badly at the moment. The reason we’re seeing struggles from TWTR revolves around the company’s issues with users. While they’ve proved that they are capable of generating gains with every earnings report, they are also showing that TWTR just isn’t seeing much of a rise in popularity. The bottom line is that the company is struggling to bring new users in and maintain them as regulars; no matter what they seem to do to fix the problem.

TWTR Has Made Several Attempts To Solve This Problem

There’s no doubt that TWTR is working hard to solve the new users issue. While none of the attempts to solve the problem seem to have worked quite yet, there has been several. Most recently, here’s what we’ve seen from the social network in an attempt to drive new users in…

  • Firehose Feed – Twitter has a streaming RSS feed called the Firehose Feed. Their Firehose is a massive feed that includes all of the data that TWTR has at any given moment in real time. While the feed is private, TWTR has opened the door to the feed for Google. The goal here is that with the feed open to Google, consumers will see more Twitter posts in Google results. As a result, those who aren’t members will be reminded of Twitter’s popularity; hopefully signing up as a result. However, this isn’t the first time the Firehose feed was opened to Google. As a matter of fact, it was offered years ago for a short time. However, Twitter closed the door because they thought it could give users a reasons not to go directly to Twitter.
  • Open Ended Access – Another big change we’ve seen recently is the fact that Twitter has opened up access to everyone. In the past, if you wanted to see a Twitter stream, you would have to either sign up or log into the social network. Without a log in, everything was blocked. However, that’s no longer the case. Now, users that aren’t signed up or logged in have the opportunity to read discussions. As a result, Twitter hopes that more people will see posts, enticing them to log in and join the discussion.
  • Video – Finally, Twitter has worked to add streaming video options and advertising to their social network. After all, Facebook boasts that more than 4 billion videos are streamed from their social network every day; so, video only makes sense.

Perhaps The Biggest Solution To The Problem Came Last Week

While all of the solutions above may send user data up slightly, I think there was one big change last week that will really help. Dick Costolo has announced that he will be leaving the company as CEO. He will remain on the board, but he won’t be CEO. In my opinion, this will solve the biggest issue at TWTR. Unfortunately, under Costolo’s guidance, the company has simply lacked a clear plan for growth. Instead of a plan, what we seem to be seeing is ideas being thrown at the wall and corporate hoping that it sticks. Hopefully a new CEO will bring a plan to TWTR and set the company back on the right path.

What Do You Think?

Do you think TWTR is destined to fail or do you think a new CEO will help to solve the new user issue? Let us know your opinion in the comments below!