IS TWITTER A BUY RIGHT NOW?

 

IS TWITTER A BUY RIGHT NOW?

 

INTRODUCTION 

Twitter, inc. is a worldwide social media platform that allows for public self-expression and conversation. This platform was developed by Jack Dorsey, Noah E. Glass, Christopher Isaac Stone, Evan Williams, and Jeremy LaTrasse on March 21, 2006. However, in recent times Elon Musk is now the sole CEO of Twitter after acquiring all its shares for $44 billion, thereby making the network a privately owned company. The network provides an engaging platform that offers users information, ideas, news, and opinions. The network services comprise life conversations, life connections, live voice messages, and live commentary. Its application offers microblogging services and social media services via mobile devices and the internet. The company is also used as a form of marketing tool for companies. Its services consist of promised tweets, promoted accounts, and promoted trends. 

 

PRICE REVIEW | IS TWITTER A BUY RIGHT NOW?

Current price: $48.99

Previous Close: 49.11

Open: 49.45

Bid: 48.95 x 4000

Ask: 49.05 x 800

Day's Range: 48.74 - 50.25

52 Week Range: 31.30 - 73.34

Volume: 38,250,854

Avg. Volume: 49,360,039

Market Cap: 37.431B

Beta (5Y Monthly): 0.80

PE Ratio (TTM): N/A

EPS (TTM): -0.28

Revenue Date: Jul 20, 2022 - Jul 25, 2022

Forward Dividend & Yield: N/A (N/A)

Ex-Dividend Date: N/A

1y Target Est: 51.00

 

Twitter recorded a net income of $513m, and a net margin of 43%. The company recorded its diluted earnings per share of $0.61. Which included its pre-tax income of $970 million from the exchange of MoPub for $1.05billion. In the first quarter, Twitter recorded a net income of $68 million, a diluted EPS of $0.08, and a net margin of 7%. 

 

From 2017 till 1st March 2021, Twitter has been on a bullish trend, hitting an all-time high of $77.8 on March 1, 2021. Ever since the stock price struggled and dropped to $31.30 in February 2022. The company has struggled to keep its share price afloat, with investors wondering how the company intends to increase its revenue, however, the company has hit a more bearish trend following the broader sell-off of its technology stocks. 

 

On the 4th of April 2022, it was announced that Elon Musk bought a 9.2% worth of Twitter shares at $39.31, thereby becoming the top shareholder. This shot up the company's stock value to $2.89 billion. On March 31st it was revealed that Elon Musk was the highest shareholder in the company with a total number of 10/29% shares. 

 

On April 13, Elon Musk made an offer to purchase the whole shares of Twitter at $54.20 per share. The company's board of directors opposed the offer by releasing a 'poison pill' which is a protective method to make a company slightly unattractive to a hostile takeover bid. Elon Musk counters the poison pill by making a direct offer to the shareholders to buy their shares. On the 25th of April, The board accepted the bid, and a cash premium was offered to shareholders. 

 

However, it's not yet clear what Musk's plan is with the company, however, it's obvious he sees a strategic and financial incentive In purchasing the platform. In the past, Elon has talked about starting his own social media platform and also becoming the biggest shareholder of a globally well-established platform. It's safe to say, his goal has been achieved, at a cheaper rate, this is the case of hitting two birds with one stone. 

 

However, before Elon Musk took over Twitter, there were plans of improving the pace of innovation and monetization of the social media platform. The then management was setting up assertive income and mDAUs targets for 2023. However, under the current management, the previous outlook has withdrawn and new development is yet to be put in motion. 

 

PRICE FORECAST

Analysts predict that Twitter will increase to $54 in the next year. They also predicted that the stock will hit an all-time high of $75 in the next year and an all-time low of $33 in the next year. The stock is slated to increase by 10.20% from its last price of 48.99.  

Analysts has predicted twitter to be a strong buy at the moment, the new management happens to be generating waves for the platform, and the shares are bound to increase overtime.

IS TWITTER A BUY RIGHT NOW?