FinTekNeeks

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Sounds of Twitter Fading

Posted in Trading

Twitter has been a tidal wave for many when it came onto the scene in 2007 SXSW. I actually get majority of my news from Twitter. I usually get my dog and cat memes from Reddit. I don’t watch traditional news channels, but I do follow them on Twitter. It allows me to get the gist of the story through those 140 characters. Sometimes I click on pictures or videos that catches my eye. But the app allows me to scan what is most relevant quickly and efficiently.

Advantages of Twitter

In my experience, Facebook may pick up the news trend like an hour later. It may ignore it altogether since timelines are sometimes inundated with shared memes and checkins. Twitter beats Facebook hands down on current events. Twitter usually provides instantaneous news from direct witnesses. Just last month, people were sharing direct images and videos on Twitter about the protests in Seoul, South Korea over the presidential scandal. It was staggering to see hundred-thousands of people marching down the street day after day, calling for impeachment of the first woman President in South Korea. Similarly, I watched reactions of the Cubs winning on Twitter as a shared moment. Thankfully, I didn’t see any torching of cars and rioting though.

Twitter also provides access to customer service from companies, which response times can be quicker than having to call an 800 number. Eventually, Facebook may provide better news feeds that can transmit current events as they happen. But, I am guessing Facebook has other priorities.

Burdened by Negative News

Recently, there have been negative backlash over executive compensation. It is interesting that people will bring up this whenever the stock price is not uptrending. The salary seems reasonable, but the options and stock grants may be excessive considering the performance of the stock and the revenue losses incurred by Twitter. Common investors feel entitled that the company should cater to the shareholders. In theory, the shareholders have vested interest in the company and the company should have fiduciary responsibility to the shareholders. However, in reality, the company is usually beholden to the board and the executives. Self-interest is usually the main driver of company dealings.

Also Evan Williams – one of the founders, is supposedly selling some 30% of his stake for “personal reasons.” This is an interesting development and market reaction was negative on the stock. I used to be skeptical about founders leaving and returning to the companies they started would have an effect on stock price. Now I tend to pay closer attention, because there are several examples that could have made me a lot of money, but I ignored it and missed the opportunity. For example: Steve Jobs returning to Apple in 1997 and Howard Schultz retaking the CEO role at Starbucks in 2008.

The stock has dropped to between $14-$15 per share recently. Rumors of buyout would often send the stock spiking up, but the rumors were just rumors and the stock would eventually drop. What is interesting is that the stock price is lower than stock IPO in November 2013. The initial offering were for $26 per share, but the first day of trading on November 6, 2013, it opened at $45.10 – that means it had more demand than the supply available at the time. Now, it seems like there are more sellers than buyers.

Experiments

Twitter had made some changes in order to gain more growth and revenue. Here is what I perceive to be “failed experiments.” Listed as well is some other experiments. Of course this is not comprehensive, so don’t hold that against me.

Failed Experiments

  1. There used to be a Moments tab, highlighting various trends and popular posts. It disappeared recently.
  2. Twitter experimented with NFL streaming last year. I only saw advertisements on the final streamed game. All others did not generate revenue for Twitter, unless they had some other way to monetize the money given to the NFL for rights.
  3. Vine was bought by Twitter and was unsuccessfully merged into Twitter. Recently, Vine was shut down, even though there had been many Vine posters.

Other Experiments

  1. Twitter has bought and integrated Periscope. I have seen sporadic uses in Twitter, but I do not see anything compelling.
  2. The CEO managing both Square and Twitter. This may be perceived that he has a divided attention, and as a result, Twitter may suffer. Current stock price movements seem to favor Square.
  3. Unlimited tagging outside the 140 character limit is offered now. It is an improvement, as before it used to take up the character limit.

Ignored Requests

  1. There is a problem with trolls and threats. Besides blocking and muting, addressing this issue is a priority for many.
  2. I have seen people ask for editable tweets. Besides deletions, people sometimes want to fix any faux pas.
  3. Sports tabs, stocks tabs, and easier method to switch accounts.

Hope for Twitter-verse

I hope Twitter doesn’t lose sight amidst these failed experiments. I truly hope that they listen to some of the users so that may improve the Twitter experience and grow their user base. It seems to be on the fence on some issues but it is fighting the good fight against the government to arbitrarily access private accounts.

I am not trying to bash Twitter here. I really like the application and want it to continue into the future. Some subtle changes have made which makes it a little harder to use. The search feature is no longer helpful in my opinion. I tend to look for some phrases or a person, but the suggestions do not even load up the right account. The overall usefulness of Twitter keeps me opening the app every day, like millions of other users.

This article covers trading financial securities, such as stocks. The world of trading often comes with rises and declines of securities, and most things do not rise or fall in a straight line. By the time this article is published, circumstances involving what we mention may have changed. Often, changes in securities can be to the detriment to the traders – seldom is it beneficial. A person should only trade with money that they’re willing to lose because losses are guaranteed. By reading this post, you agree that you’ve read our disclosure.

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