Twitter (TWTR) Up on Acquisition of Longtime Partner
Shares of San Francisco based Twitter, Inc. (TWTR) rose on Tuesday on a strong day on the stock exchanges overall. Twitter stock closed at $45.52, up $4.65 per share, or 11.38%, on volume of 24,285,070 shares. The company announced the acquisition of Gnip in a move that not only is expected to provide revenue growth and monetization opportunities, but it also increased Twitter's market capitalization by $2.74 billion.
The move is seen as a cause for hope after the stock's long recent price decline.
Founded in 2006, Twitter is a global platform for real-time conversation and self-expression. It is a social media network providing access to people, information, ideas, opinions, and news. The Twitter application also provides micro-blogging services for both the Internet and for mobile devices. The platform is increasingly being used for marketing and customer contact by businesses of all sizes. In 2013, Twitter had a net loss of $645 million on total revenues of $665 million. The company has 2,700 employees, 50% of whom are engineers. Gnip is a social data provider that offers access to historical Twitter data, but it also works with other social networks including Reddit, Tumblr and Bitly. The acquisition is expected to provide Twitter with even more revenue capabilities, as well as integration of customer and user data bases between the two organizations. Gnip will enable Twitter to have more direct control over the monetization of its own content. Since Gnip sells access to its databases to other companies, Twitter will now have access to the cash flow from those operations. The acquisition will also enable Twitter to add revenue as a result of Gnip providing similar services to other social media networks. The acquisition of Gnip means that Twitter will be able to sell its data directly to third-party concerns, such as advertisers and brand managers. This can result in ads that are more targeted, most of which will be of the mobile variety. Gnip, which has partnered with Twitter for the past four years, has access to Twitter's "fire hose"
Published on Apr 16, 2014
By Kevin Mercadante