Thursday, 27 July 2017

TWTR - broadly struggling

Whilst the main market settled very mixed, there was very powerful downside in Twitter (TWTR), settling -14.1% at $16.84. Short term rising trend is broken, along with the 50dma, further weakness to the 15/14s is due. Mid term outlook is for broad chop, as the company is no doubt looking to be bought out.


TWTR daily



TWTR weekly, 5yr



Summary

Corp' site: https://investor.twitterinc.com/results.cfm

Earnings slides: http://files.shareholder.com/downloads/AMDA-2F526X/4882174057x0x951001/30CD4C38-ED0B-4D4C-9F94-3E969E95D77B/2017_Q2_Earnings_Slides.pdf

Media: https://finance.yahoo.com/news/twitter-struggles-boost-monthly-user-110823800.html
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Yours truly is a very frequent user of Twitter. Yet, like all other users, the service is free. Every time someone views one of my tweets it adds to server load, and is an expense to Twitter.

Its notable that most analysts are only looking for the mid/low teens, see: http://finviz.com/quote.ashx?t=twtr 
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The technicals

In terms of price, its just plain ugly. Other than an initial rally from the IPO price of $26 in Nov'2013, to a peak of $74.73 in December, the stock has been broadly declining across four years. Considering the outlook for the main equity market (upside into spring 2018), its difficult to see Twitter breaking below the May 2016 low of $13.73. Instead, the stock will likely just broadly churn, until someone launches a takeover.
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Outlook: an eventual buyer will likely appear, but its very difficult to see a bid coming any higher than $20.00.