Twitter Shares Get a Reality Check, Says Pivotal Research's Brian Wieser
*By Michael Teich*
It's "mind-boggling" that Wall Street didn't foresee the decline of Twitter's user base, said Pivotal Research analyst Brian Wieser.
"This has been more than telegraphed," and the "stock was widely overvalued" going into earnings, he added.
Twitter shares plunged after the company reported 335 million monthly active users, 1 million fewer than the company had in the previous quarter. Twitter attributed the decline to its efforts to clean up the platform and purge spam accounts as well as the impact of GDPR, the new European Union law on data protection and privacy.
In its shareholder letter, Twitter said it expects a third-quarter decline of "mid-single-digit millions of monthly active users."
Although Wieser has a "sell" rating on Twitter stock, he thinks there were some positives that emerged from the quarterly report. He said that investors are overvaluing the importance of monthly active users.
"Monthly active users are irrelevant commercially," he said. "Advertisers are the ones spending money, not users."
By the same token, advertisers were seemingly unfazed by the drop in MAUs. Twitter's ad revenue grew 23 percent to $601 million in the second quarter. Overall revenue of $711 million topped estimates of $696.2 million, and earnings per share were in line with expectations.
Wieser is optimistic about Twitter's efforts to kill the spam and fake accounts plaguing the platform. Twitter suspended more than 70 million accounts in May and June, but Twitter CFO Ned Segal said most of them were not included in the company's reported metrics.
For full interview, [click here] (https://cms.cheddar.com/videos/VmlkZW8tMjEyNDg=).
Ford says it’s reducing production of the F-150 Lightning electric pickup vehicle as it adjusts to weaker-than-expected electric vehicle sales growth. The automaker said about 1,400 workers will be impacted by the move.
Walmart Inc. is raising the starting base pay for store managers, while redesigning its bonus plan that will put more of an emphasis on profits for these leaders.
Despite concerns about shipping delays in the Red Sea, RSM Chief Economist Joe Brusuelas says there are still reasons to be optimistic about the state of the U.S. economy.
Dan Ives, Managing Director and Senior Equity Analyst at Wedbush Securities dives deeper into a report by the International Data Corporation (IDC) that Apple has ended Samsung's 12-year reign as the world's largest smartphone seller.
Artificial intelligence is the biggest buzzword at the World Economic Forum’s annual meeting in Davos. Advances in generative AI stunned the world last year, and the elite crowd is angling to take advantage of its promise and minimize its risks.
Smartphones could get much smarter this year as the next wave of artificial intelligence seeps into the devices that accompany people almost everywhere they go.
In an annual assessment of global inequalities, Oxfam International said the first trillionaire could emerge within the next decade — as the anti-poverty organization pointed to the growing wealth gap that skyrocketed globally during the pandemic.
