Despite having an active user base of over 300 million people, Twitter has struggled to monetise quite like other social network giants like Facebook and it’s shed many millions of users over the years. Despite revenue growth in the short term however, investors and shareholders have not been happy, so CEO Dick Costolo stepped down from his role last week, but even that hasn’t calmed fears. Now, many analysts are suggesting that the site needs a buyout to secure stockholder confidence once again.
Since April this year, Twitter has lost a third of its share price, showing a continued distrust of the direction management is taking it in. While it’s undoubtedly hoped that a new CEO will be able to take the reigns and restore confidence, it’s not guaranteed. This is leading some to look elsewhere for a potential company turnaround.
“It seems that everyone and their uncle is betting that Twitter will be bought by another firm,” said Steven Place, founder of options analytics firm investingwithoptions.com (via Reuters). This may be something that investors are expecting too, as many are hedging their bets in-case of that eventuality.
The fact that a new CEO hasn’t been announced and that co-founder of the company, Jack Dorsey, is taking on the role of an interim CEO, has been suggested as further evidence of the fact that some firms may be sniffing around at the potential of acquiring one of the most recognised names in social networking.
What will be perhaps the most indicative of Twitter’s potential future is the second quarter earnings report, expected to be announced towards the end of July.
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KitGuru Says: Twitter should be profitable. It’s a huge service. But due to its format and platform, it is not the easiest to monetise.